06/28/2011 - The Crackdown on Foreign Account Holders Continues: The 2011 Voluntary Disclosure Initiative and the Updated Filing Requirements for Foreign Financial Accounts
With budgetary pressures increasing and deficits mounting, the United States Internal Revenue Service (“IRS”) is continuing its campaign to find U.S. citizens and residents who have failed to report both (1) their worldwide income on their U.S. federal tax returns and (2) all non-U.S. financial accounts in which they have a financial interest or over which they have signature authority.

06/15/2011 - Attracting New Managers: Hedge funds find hospitable home in Texas
More and more hedge funds are based in Texas, particularly in Dallas/Fort Worth. The proliferation of hedge funds in Texas has less to do with the historical wildcatting spirit of the State and more to do with other factors that have led many fund managers to realize that the establishment of a Texas office is a smart business decision. In particular, the very favourable tax environment in Texas includes comparatively low effective state taxes on the income of fund managers due to the complete absence of any state income tax on individuals.

04/12/2011 - SEC to Consider Extension of Registration Deadlines Applicable to Investment Advisers
In a letter dated April 8, 2011, to the President of the North American Securities Administrators Association (“NASAA”), Robert Plaze, Associate Director of the Division of Investment Management of the Securities and Exchange Commission (the “SEC”), stated that the SEC is expecting to adopt final rules implementing various provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) applicable to investment advisers by July 21, 2011.

02/24/2011 - SEC Proposes Private Fund Systemic Risk Reporting on New Form PF
On January 25, 2011, the Securities and Exchange Commission (the “SEC”) proposed new Rule 204(b)-1 (the “Proposed Rule”) under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), that would implement various provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”).

02/14/2011 - Voluntary Disclosure Plan for Offshore Assets - Take #2
On February 8, 2011, the IRS announced a second voluntary disclosure program that will allow U.S. taxpayers to disclose offshore accounts that were previously kept secret from the IRS. U.S. citizens and resident foreign nationals are required to pay U.S. federal income tax on their worldwide income.

02/02/2011 - New FINRA Rule 5131 to Address Abuses in the Allocation and Distribution of IPOs
On November 29, 2010, the Financial Industry Regulatory Authority, Inc. (“FINRA”) announced that FINRA Rule 5131 will take effect on May 27, 2011. FINRA Rule 5131 is intended to sustain public confidence in the initial public offering (“IPO”) process by regulating the allocation, pricing and trading of IPOs of equity securities (“New Issues”).

01/27/2011 - Exemptions From Investment Adviser Registration: The SEC’s Proposed New Rules
Effective as of July 21, 2011, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) repeals a key exemption from investment adviser registration currently relied upon by many private fund managers and replaces it with several much more limited exemptions from registration.

12/28/2010 - SEC Proposes New Disclosure and Reporting Requirements for Investment Advisers
On November 19, 2010, the Securities and Exchange Commission (the “SEC”) proposed new rules and amendments to existing rules and Form ADV under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), that would implement various amendments to the Advisers Act contained as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”).

12/23/2010 - The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
On Friday December 17, 2010, the President signed into law the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (the “Act”).

11/10/2010 - (Almost) Year-End Tax Alert
In response to the current state of the economy, Congress has passed some tax legislation amending the Internal Revenue Code (the “Code”). Although it is up for debate, some would say that Congress has not been busy enough. As we near the end of the year, many taxpayers and their advisers are going through their usual year-end tax planning checklist. This year, planning may be greatly impacted both by recent legislation and by items that Congress has not yet addressed, including, among others, the extension (or lapse) of the “Bush tax cuts.”

10/21/2010 - SEC Proposes Definition of “Family Office”
As part of the ongoing rulemaking initiatives contemplated by the Dodd-Frank Act, the Securities and Exchange Commission recently released a proposed rule defining “family offices” for purposes of an exemption from registration under the Investment Advisers Act of 1940.

07/23/2010 - Significant New Registration, Reporting and Regulatory Requirements Imposed on Advisers to Private Funds
On July 21, 2010, President Obama officially signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”), which represents the most sweeping regulatory overhaul of the financial markets since the Great Depression. This alert addresses Title IV of the Act, codified as the Private Fund Investment Advisers Registration Act of 2010 (the “Registration Act”).

07/02/2010 - SEC Adopts Pay-to-Play Rules
On June 30, 2010, the Securities and Exchange Commission (the “SEC”) formally adopted Rule 206(4)-5 (the “Pay-to-Play Rule”) under the Investment Advisers Act of 1940, as amended (the “Act”).

01/13/2010 - SEC Adopts Amendments to Custody Rule
On December 30, 2009, the Securities and Exchange Commission (the “SEC”) formally published amendments to Rule 206(4)-2 of the Investment Advisers Act of 1940, as amended (the “Custody Rule”). The Custody Rule is designed to increase protections for clients and investors who turn their assets over to an investment adviser registered with the SEC, and it imposes significant new regulatory requirements on advisers with custody of client assets.

06/26/2009 - FURTHER UPDATE: IRS Extends FBAR Filing Deadline in Limited Circumstances
We recently alerted clients to the looming FBAR filing deadline of June 30, 2009. The IRS has now provided a limited extension of the deadline until September 23, 2009 FOR SOME—BUT NOT ALL—TAXPAYERS. 

06/24/2009 - Foreign Account Holders and Persons with Authority over Foreign Accounts – BEWARE! The June 30th U.S. Filing Deadline May Apply to You
Pursuant to the Bank Secrecy Act, certain U.S. persons are required to disclose information related to foreign financial accounts in which or over which they maintain an interest or some level of control. This information is disclosed by filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts. (This Treasury Department form is commonly referred to as an “FBAR”). The FBAR, which reports a taxpayer’s foreign financial accounts held or controlled during the 2008 calendar year, must be filed by June 30, 2009 (no extension is available) with the U.S. Department of Treasury. The purpose of this Alert is to provide a summary of the scope of an FBAR (including the recent revisions to this form) to assist our clients in complying with the stringent reporting requirements and avoid the onerous penalties relating to the failure to timely file this form.

05/07/2009 - Weathering the Storm: Modifying Your Company’s Debt: Tax Trap or Treasure?
Debtors increasingly are requesting that their creditors modify the terms of their debts because of difficulty or inability to service their debts in accordance with the debts’ existing terms. Faced with the prospect of debtor defaults and having to foreclose on property securing their loans causing the accrual of financial losses, creditors, too, often have an incentive to restructure debt to maximize their returns.

02/27/2009 - Guidance and Relief for Deferred Compensation Arrangements of Certain Foreign Corporations and Partnerships
The Internal Revenue Service has issued interim guidance on deferred compensation paid to U.S. taxpayers by certain foreign corporations and partnerships considered to be “tax-indifferent entities.” To read more about Internal Revenue Code (“Code”) Section 457A click here.

02/25/2009 - Weathering the Storm: Purchasing a Company’s Own Debt - The Tax Consequences May Surprise You
Recently, we have been approached by a number of companies that have expressed an interest in purchasing their own outstanding debt that, in many cases, is trading at a significant discount. While a debt acquisition (redemption) transaction may save cash for a company, unless one of the statutory exceptions is applicable, this type of transaction generally will result in the company immediately recognizing ordinary income. The purpose of this Alert is to provide a summary of the material federal income tax consequences associated with a company’s purchase of its own debt.

02/03/2009 - Legislation Requiring Investment Fund Registration Introduced in the U.S. Senate
On January 29, 2009, Senators Chuck Grassley (R-Iowa) and Carl Levin (D-Michigan) introduced the Hedge Fund Transparency Act of 2009 (the “Act”) in the United States Senate with the stated purpose of imposing more extensive regulatory oversight of hedge funds. However, the bill is not limited to hedge funds; it generally would apply to, and dramatically impact, all private funds (including private equity and venture capital funds) that rely on an exemption from registration under Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act of 1940, as amended (the “Company Act”).¹

Paying for the Bailout by Currently Taxing Offshore Deferrals
Effective January 1, 2009, the ability of U.S. taxpayers to defer taxation on income earned from certain offshore entities will be severely restricted.

09/24/2008 - A State Government “Hammer” for Non-Paying Taxpayers
News alert that discusses the increase in state tax audits due to the current state revenue shortfalls. 

Texas Tax Reform is Imminent, Including a Possible Substantial Rewrite

07/28/2004 - SEC Proposes Rule Requiring Registration of More Hedge Fund Managers