Practices

Tax

Tax liability at the local, state, federal, and international level is a concern in any transaction, and for all individuals and trusts. The attorneys in our Tax Group help clients minimize their tax burden and maximize the benefits of tax credits, deductions, and exemptions.

We help clients plan so that tax controversies are avoided. Should tax controversies arise, we advise on matters ranging from routine audits to criminal tax matters. Our clients include businesses, nonprofits, individuals, trustees, and other fiduciaries.

Attorneys in the Group collaborate with each other and across the firm to meet clients’ individual needs. We work closely with colleagues in other practice areas, principally private client services, mergers and acquisitions, private equity, litigation, public finance, real estate, and white collar defense and internal investigations. This collaboration improves our tax work and extends client service beyond what any tax attorneys could achieve by working alone.

Our tax attorneys maintain excellent and longstanding relationships with tax officials and policymakers at all levels of government. The collective experience of our group includes government service at the U.S. Treasury Department and Internal Revenue Service, and we draw upon that experience to assist clients with both tax issues and tax planning opportunities. We also anticipate and monitor regulatory and legislative developments on tax issues to keep our clients agile and informed

Business Transactions and Compliance

The Group assists clients in mergers, acquisitions, leveraged buyouts, divestitures, and liquidations. We render formal tax opinions in these transactions, and, where necessary, we are prepared to obtain rulings from the Internal Revenue Service and state and local tax authorities. We offer advice on ongoing tax compliance in day-to-day business issues. We also review positions proposed by other tax professionals for tax return reporting, and, where appropriate, render opinions to clients seeking to minimize their exposure to accuracy-related penalties.

Financial Transactions and Products

We advise on a variety of financial transactions and products. They include interest rate swaps, taxable and tax-exempt derivatives, contingent payment instruments, and stripped debt obligations. We counsel specialized entities, such as regulated investment companies (RICs), hedge funds, private equity funds, financial services organizations, and other entities engaged in managing investments.

New and Small Businesses

Several of our attorneys focus on problem solving and tax planning opportunities for new and small businesses. We prepare tax-sensitive general and limited partnership arrangements; limited liability company agreements; organizational documents for S corporations, business trusts, and limited liability partnerships; pre-incorporation tax plans; expense reimbursement plans for small businesses; and stock buy-sell agreements.

Executive Compensation

Our attorneys structure a variety of tax-sensitive deferred and incentive executive compensation arrangements, including 401(k) plans, incentive and nonqualified stock option plans, stock bonus plans, stock appreciation rights (SARs), and other equity-based compensation arrangements.

International Tax Matters and Planning

We handle international tax matters for both U.S. and non-U.S. businesses and individuals. This includes matters involving international tax treaties, controlled foreign corporations, transfer pricing, competent authority requests, possessions corporations, foreign tax credits, U.S. withholding taxes, foreign investment in U.S. real estate and securities, passive foreign investment companies (PFICs), off-shore venture capital, and other investment in U.S. business enterprises. Where appropriate, we work with foreign tax advisers in coordinating U.S. and foreign tax planning.

Real Estate and Workouts

We analyze and structure real estate development vehicles, including REITs and REMICs, and work regularly with tax-oriented real estate financings and workout transactions. We use both classic arrangements, such as partnerships and S corporations, and newer vehicles, such as limited liability companies, UPREITs, and DOWNREITs.

Tax Credits

Our attorneys have experience with the major governmental tax credit programs. These include Low Income Housing Tax Credits, New Markets Tax Credits, federal rehabilitation tax credits (historic tax credits), renewable energy production and investment tax credits, and various state tax credits. We also are well versed in relevant real estate, federal and state income tax, finance, and creditors’ rights issues.

State and Local Taxes and controversies

We have advised clients on state and local tax planning and controversies in California, Colorado, Delaware, Maryland, New Jersey, New York, Pennsylvania, Utah, and the District of Columbia, among other states. The firm has offices throughout the country, so if a state or local tax controversy requires an appeal to the courts, we are prepared to undertake it.

Tax-Exempt Organizations

Our tax attorneys serve hospitals, health care systems, universities, museums, charitable foundations, trade associations, social clubs, social welfare organizations, and other exempt organizations. We advise clients on requests for tax ruling and determination letters, federal, state, and local tax exemptions; handle reorganizations and reclassifications; and counsel on IRS audits, fiduciary responsibilities, compensation issues, unrelated business income tax matters, private foundation compliance problems, and legislative and regulatory developments.

Tax-Free Bonds

Our attorneys have analyzed and structured virtually every type of municipal bond transaction, including bonds for governmental functions, health care, housing, and solid waste facilities. Ballard Spahr has a national reputation for excellence in the federal and state tax law aspects of public finance transactions, including rules related to arbitrage. Our late partner, Frederic L. Ballard, Jr., was the author of ABCs of Arbitrage (American Bar Association, 2011 edition), an indispensable reference work widely used by public officials, attorneys, financial advisers, and investment bankers, and that work is being carried forward by members of our Tax Group.

Controversies with the Internal Revenue Service

Our attorneys routinely deal with tax audits at the agent level, protests before the Appeals Office, refund claims, requests for rulings, determination letters, technical advice, closing agreements, and matters pertaining generally to penalties, collection, levy, payment, and compliance.

Tax Litigation

We represent clients in tax controversies before the U.S. Tax Court, federal district and appeals courts, the U.S. Court of Federal Claims, and state and local tribunals. When appropriate, we consult with other firm attorneys with substantial litigation experience at all levels of government. Attorneys in our White Collar Defense/Internal Investigations Group, including those in Philadelphia and New York offices, defend individuals and corporations involved in federal and state criminal investigations stemming from alleged tax fraud.

Tax policy

We have participated for many years in bar associations at all levels. These activities keep our lawyers up to date on the latest professional thinking and provide opportunities to meet with colleagues in other firms and the government and discuss trends in tax policy. This aids in our negotiating the tax terms of transactions and resolving tax controversies.

Voluntary Disclosures

We counsel clients on potential voluntary disclosures, including in regard to offshore financial accounts, to federal and state tax authorities.

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Experience

Business and Transactions Matters

Provide tax planning for a private equity fund’s acquisition of equity interests in a manufacturing company, including structuring tax free rollover of founder equity
Structure a public company’s stock acquisition of a strategic target to qualify as a tax-deferred reverse triangular merger using a combination of stock and cash consideration.
Advise on tax and structure issues on the formation and fund raising activities of a private equity fund, including management company structure and equity based compensation

Provide tax planning advice for a tax free stock exchange between two ESOP-owned S corporations with combined operations in 14 states
Represent financial advisory firm on tax aspects of an equity acquisition of a wealth management firm, including a tax deferred roll over of management equity involving a series a related entities
Represent a specialty lender on the tax aspects of the negotiation and documentation of a $100 million credit facility which enabled the lender to establish and fund an asset-based lending program
Represent a private equity sponsor on tax and structuring issues for cross-border acquisition of a Canadian manufacturing portfolio company
Represent a private equity sponsor on the acquisition of all of the membership interests in a services company immediately following an F reorganization of target

Real Estate Matters

Assisted a developer in its acquisition of a 50 percent interest in a large urban shopping center in Philadelphia. The newly redeveloped, enclosed mall contains 1.4 million square feet of retail space and spans more than three city blocks. We provided a wide range of land use, transactional, and state and local tax advice
Represented a large university on the development of a more than $100 million student housing project consisting of a 361,200-square-foot, mixed-use student housing and retail project. Due to the complex structure of the partnership between the university and private housing developer, it required careful coordination of legal, architectural, and operational issues. We advised on the structure of the transaction with the joint venture partner, negotiated the development terms of the operating agreement, and drafted all of the real estate documentation, including tax-related issues for the university
Represented an owner/developer in the new construction of a Home2 Suites by Hilton® across from the Pennsylvania Convention Center. The 246-suite hotel features more than 2,000 square feet of meeting space and 9,750 square feet for ground retail and restaurants. Our attorneys handled obtaining zoning approvals, the tax structuring, and all related construction and real estate documentation. We also handled the joint-venture agreement with the hotel operator, the franchise agreement with Hilton®, and the hotel management agreement
We represented a developer that transferred approximately $1 billion of real estate to a REIT’s operating partnership in exchange for operating partnership (OP) units. Our work included real estate, finance, environmental, securities and tax advice.
Counsel a Fortune 100 telecommunications firm with various state and local tax projects, state and local corporate and partnership planning and dispute matters. Also, we advise on federal, state, and local tax issues in connection with real estate joint ventures
Assist a national housing developer with various federal, state, and local tax corporate and partnership planning, reporting matters and qualified opportunity zone structural and investment issues. We also assisted the client in forming and qualifying a Section 501(c)(3) tax-exempt employee disaster and hardship relief organization by preparing all applications, charters, and related materials
Obtained favorable settlement by persuading School District that much of the construction costs for large corporate headquarters in North Hampton County, PA was personal and not subject to real estate tax
Negotiated favorable settlement of a School District’s appeal of a large build-to-suit shipping facility in Montgomery County, PA
Negotiated reduction in assessed value for large multi-family property that came on the market just as COVID-19 shutdowns began