The Reed Smith Tax Practice Group has a single goal: to help clients accomplish their business or personal objectives in the most tax-efficient manner possible.
Reed Smith's tax practice has extensive experience advising clients on the federal tax considerations associated with a wide range of financial transactions, including mergers and acquisitions, divestitures, spinoffs, structuring and reorganizing business entities, tax-oriented financings, joint ventures, renewable energy transactions, real estate transactions, forming and operating tax-exempt organizations (such as private foundations, charitable giving and trade associations), compensation, tax credit transactions, and cross-border transactions.
Mergers, Acquisitions, Divestitures, Restructurings and Financing Transactions
We provide tax planning advice to help our clients structure their business operations and transactions for the best possible tax results. Our clients range from publicly traded companies, private equity funds and their portfolio companies, to small start-up ventures in a wide range of businesses, with transaction sizes ranging from the very small to the very large. We represent clients with many different types of transactions and business arrangements, including the formation and capital structure of corporations, partnerships and limited liability companies, mergers, acquisitions, divestitures, tax-free reorganizations, tax-free spinoffs, joint ventures, and leveraged buyouts. We also represent lenders, issuers and investors with the tax aspects of financing transactions, including public and private debt and equity issuances, hybrid debt, true leases, capital leases, and synthetic leases.
We have worked with clients for many years on international tax issues, including ongoing counseling to multi-national clients in order to minimize taxes both in the United States and abroad; structuring cross-border acquisitions, dispositions, restructurings and joint ventures; exploiting (including through licensing arrangements) intellectual property with foreign partners and affiliates of U.S. persons; and structuring and forming offshore private investment vehicles (including private equity and hedge funds and their general partners, managers and advisors). We represent foreign clients investing in the United States, U.S. clients investing abroad, and joint ventures between U.S. and foreign persons investing both in the United States and abroad.
Investment Funds and Financial Products
We offer integrated services from planning to formation to operations for all types of investment funds, including private equity, real estate, and hedge funds, and we represent clients with all tax issues affecting such funds, their partners and advisors. Our investment fund clients include both domestic and off-shore funds, as well as funds utilizing parallel fund structures, master-feeder structures, and fund-of-funds arrangements. We also have significant experience representing investors, investment funds and large financial institutions in connection with the business, legal and tax considerations associated with all types of financial products, including forward and futures contracts, swaps, notional principal contracts, options, equity-flavored debt instruments and other derivative transactions. We work closely with our Private Equity, Corporate and Real Estate Groups to minimize the tax costs associated with the formation and operation of investment funds, including structuring fund investments.
We also represent entities that have elected to be treated as regulated investment companies (or mutual funds) (“RICs”). We advise mutual fund sponsors in a wide variety of transactions, such as taxable and tax-free mergers and other reorganizations, and acquisitions of portfolios held by other RICs and common trust funds, and advise such clients regarding the requirements for a mutual fund to qualify as an RIC for federal income tax purposes, including the applicable RIC distribution and diversifications requirements, as well as other issues that impact mutual funds. We have also advised clients on the tax considerations to consider in connection with utilizing RICs, publicly traded partnerships and other entities, both foreign and domestic, as investment vehicles for a broad range of investment assets.
Renewable Energy and Other Tax Credit Transactions
We regularly represent lenders, tax equity investors and developers in all manner of renewable energy transactions, and have extensive experience in connection with energy tax credits, production tax credits and other tax-related benefits associated with renewable energy projects (for example, cash grants in lieu of energy tax credits or production tax credits). We have significant experience with all financing techniques utilized in the renewable energy market, including partnership flip transactions, leases and inverted leases. We represent several of the world’s largest manufacturers of renewable energy equipment, and regularly advise clients on all aspects of the manufacturing tax credit. Our tax attorneys in this area speak and write frequently before professional associations and industry groups. We also have extensive experience advising clients on low-income housing credits, rehabilitation tax credits and historic tax credits.
Real Estate (including REITs and REMICs)
We work closely with our Real Estate Group to advise clients on the tax considerations that arise in all types of real estate transactions. For example, we assist clients in structuring the acquisition, development and disposition of real estate, including Section 1031 exchanges and tax-deferred condemnations. We also provide tax advice to buyers and sellers with respect to property tax and transfer tax issues associated with real estate transfers. Furthermore, we represent investors (including private equity and institutional investors), developers and governmental agencies in structuring, drafting and negotiating partnership, joint venture and limited liability company agreements for single asset projects and real estate funds.
We regularly provide advice, planning assistance and solutions to real estate investment trust (“REIT”) clients in every aspect of their business, including advising on REIT organizational and operational requirements, business combinations involving REITs (such as mergers, acquisitions and divestitures), REIT debt and equity offerings, and lending transactions. We also advise clients on the use of structures, such as umbrella partnerships (UPREITs) and taxable and qualified REIT subsidiaries, to facilitate initial property acquisitions and provide tax-favored currency for future acquisitions. We also represent clients in connection with entering into IRS closing agreements and tax protection agreements. Furthermore, we assist clients with REIT qualification-testing and focused tax-savings strategies.
Additionally, we provide advice for entities that elect to be treated as real estate mortgage investment conduits (“REMICs”), including advising clients in connection with REMIC formation, operations and asset transfers. Furthermore, we provide substantial and ongoing advice concerning complete and partial defeasance transactions, substitutions and changes in collateral, and other loan modification transactions for portfolio loans held by REMICs. We have advised clients on the use of re-REMICs to improve the credit rating on a portion of the underlying loans. In addition, we regularly advise investors who acquire economic and non-economic REMIC residual interests with respect to structuring the acquisitions and planning for the effective tax treatment of holding such interests.
Tax Disputes and Litigation
We have extensive experience representing taxpayers in tax controversies with the IRS and the various state and local taxing authorities. Our clients include Fortune 100 corporations and other business organizations, as well as individuals and tax-exempt organizations (such as universities, hospitals and trade associations). We represent clients during audit and administrative appeal proceedings, and in federal and state courts at trial and appellate levels, including the United States Supreme Court. We also have broad experience in criminal tax matters at the federal and state level.
We have extensive experience in a wide range of executive compensation issues affecting public and private businesses. Our practice encompasses all aspects of executive compensation, such as designing and implementing stock-based incentive compensation plans of all types, non-qualified deferred compensation arrangements, and employment agreements, including "golden parachute"-type arrangements. Our executive compensation practice considers the tax, securities and corporate governance issues related to executive compensation that concern companies, boards of directors and executives. We are actively involved in representing clients in all aspects of public offerings, SEC-required disclosures, mergers, acquisitions, restructurings and dispositions, with special experience in the investments of private equity funds. Our executive compensation practice is a global practice that works with companies and other Reed Smith attorneys on an international basis to create the appropriate and desired executive compensation programs that take into account our clients’ business needs and objectives.
We advise a vast array of tax-exempt organizations, including public charities, private foundations, trade associations, and social clubs, on numerous formation, planning and compliance matters, and we represent them before various regulatory bodies at both the federal and state level. Our experience includes providing counsel to our clients on such matters as unrelated business taxable income, jeopardizing investments, private inurement and other issues related to the tax-exempt provisions of the Internal Revenue Code. We work closely with the other members of our tax team and provide insight and guidance into how and why the tax-exempt world can and does impact our corporate, partnership, and private equity clients.