Tax Code Backs SECA Burden for Partnerships, NYU Law Center Says

The US Tax Court was right to subject a private equity firm structured as a partnership to a heightened tax burden for its employees, the Tax Center at NYU Law said.

The court correctly read the ambiguous statute in IRC Section 1402(a)(13)—referring to a “limited partner, as such” to hold Denham Capital Management LP to tens of millions in additional taxes under the Self-Employment Contributions Act, the Tax Center told the US Court of Appeals for the First Circuit in a “friend of the court” brief.

Congress showed its intention in the tax code section with “structure, ...