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Tax Due Diligence Webinar

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Check List for Tax Due Diligence. (8/3/2015)

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Tax Due Diligence Webinar

  1. 1. Roger Royse ROYSE LAW FIRM PC 1717 Embarcadero Road Palo Alto, CA 94303 (650) 813-9700
  2. 2. TEAM • Banker • Tax Attorney • Accountant • Corporate Lawyer
  3. 3. DUE DILIGENCE LIST • Tax Returns (all jurisdictions) • Financials • FIN 48 Work Papers • Sales and Local Tax Filings • Organizational Documents • Tax Elections • Cap Table
  4. 4. REPRESENTATIONS AND WARRANTIES • Knowledge and Materiality • Tax Returns Filed • Taxes Paid • Reserves for Tax Liability Adequate • Schedules • Tax Assets/382
  5. 5. COVENANTS • Post Closing Preparation of Returns • Transfer Taxes • Review Rights • Tax Treatment/ Reporting the Transaction • Audit and Litigation • 280G Approvals/Vote • Amendment • Consistency with Prior Returns • Straddle Period • Refunds • Voluntary Disclosure
  6. 6. TRANSACTION COSTS AND CLOSING PAYMENTS • Allocating Deduction • Allocating Cost
  7. 7. SUCCESSOR LIABILITY • Asset v. Stock Sale • Transferee Liability • Uniform Voidable Transactions Act (UVTA)
  8. 8. STATE TAXES • Tax Clearance • Transferee Liability
  9. 9. PROBLEM AREAS • 382 Loss Limitations • Transfer Pricing • State Nexus • Tax Reserve • 409A Issues • Option/Stock Granting Practices
  10. 10. TAX INDEMNITY • Carve Outs • Baskets/Caps • Survival • Holdback, Escrow • Offset for Tax Benefit
  11. 11. CRITICAL TAX ISSUES • Post-Acquisition Tax Structuring • Tax Compliance • Post-Acquisition Tax Audits • Executive Compensation and Benefits
  12. 12. POST-ACQUISITION TAX STRUCTURING • Types of Tax Benefits • Reduction of subpart F income • Tax-efficient transfer pricing • Consolidation of U.S. subsidiaries into one tax group • Creation of efficient tax treaty network
  13. 13. TAX COMPLIANCE & POST-ACQUISITION TAX AUDITS • Strategy to handle and defend an audit: • Preemptive discussion of tax issues • Early communication among relevant stakeholders • Tax risk management controls • Tax reporting • Tax compliance procedures and processes
  14. 14. COMPENSATION AND BENEFITS • Deferred equity payouts and IRC Section 409A income recognition issues • Seek counsel and guidance • Determine valuation methodology in the acquisition agreement and secure independent valuation expert • 401(k) Compliance • Affordable Care Act regulations
  15. 15. CONTACT Roger Royse ROYSE LAW FIRM PC 1717 Embarcadero Road Palo Alto, CA 94303 (650) 813-9700 rroyse@rroyselaw.com www.rroyselaw.com

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