Tax Services

Our attorneys regularly advise businesses, including C and S corporations, partnerships and LLCs to identify and minimize the potential tax ramifications of their transactions. These tax-efficient strategies run throughout the business life cycle -

• From incorporation/formation, when the capital structure and choice of entity must be carefully analyzed and various exit strategies of the participants should be explored and memorialized;
  
• Through an entity's mid-life, when a client may contemplate a merger, acquisition, recapitalization, consolidation, taxable or tax-free reorganization, entity conversion, qualified or nonqualified stock option arrangement, or other significant commercial transaction; and, finally,
  
• Through disposition, whether as a stock sale, asset sale, deemed asset sale, like-kind exchange or other terminal event. Throughout this process, our attorneys maintain a keen focus on preserving a client's ultimate business objective while maximizing the tax benefits occasioned thereby and reducing the risks of future problems and liability exposure.

Our attorneys also have extensive experience in representing our business and individual clients in all aspects of Federal and state tax controversies, including audits, administrative appeals, penalty abatements, pretrial tax litigation, collection appeals and offers in compromise. Our experience includes handling matters regarding Federal and state income and employment taxes, as well as state sales and use, personal property, escheat and other types of local taxes. In effectively representing our clients, McMillan Metro's attorneys seek to avoid protracted matters in favor of resolving the underlying issues on favorable and expedited terms.

As part of our tax practice, we assist non-profit organizations from their initial formation to their continuing operation. We obtain federal and state tax exemptions for non-profit organizations, including private foundations. We also provide advice on how to keep and make the most of the organization's tax-exempt status. We offer advice to our clients on the rules of unrelated business taxable income, as well as the general prohibitions against private inurement and private benefits, and the complex rules involving private foundations.

Our estate planning practice provides sophisticated tax strategies to our clients to assist them in minimizing federal and state estate and gift taxes. Our attorneys also work with clients after the death of a loved one to further lower federal and state estate taxes. This post-mortem planning may use a variety of techniques, including qualified disclaimers, to reduce the overall tax burden on the estate.

Certain excise Taxes are imposed by the federal government on the manufacturers or suppliers of certain goods and services. The most common excise taxes are ---

(1) Manufacturers' excise taxes imposed on certain motor-vehicle articles, tires and inner tubes, gasoline, lubricating oils, coal, fishing equipment, firearms, shells, and cartridges sold by manufacturers, producers, or importers; and
(2) Special-fuels excise taxes imposed at the retail level on diesel fuel and special motor fuels.
(3) Environmental excise taxes, including the leaking underground storage tank (LUST) tax and ozone depleting chemicals (ODC) tax(4) The communications and air transportation excise tax
(5) Manufacturers' excise taxes on tobacco products (including cigarettes and smokeless tobacco) and liquor (including wine and beer)
(6) Highway motor vehicle excise tax, which is imposed on the owner of the highway motor vehicle and depends on the weight of the vehicle

These excise taxes may be imposed at the manufacturers' level, the operator level or the retail level, depending on the tax. The excise taxes also have a variety of exemptions. For example, farmers purchasing diesel fuel for agricultural purposes do not pay the excise tax on the fuel.

Like employment taxes, the non-payment of excise taxes on a timely basis creates major problems. The IRS imposes interest and penalties on late payments. However, the IRS will allow the payor to have some of this waived if there is a "reasonable cause."

Because excise taxes are so complicated, it is usually advisable to discuss them with your attorney or your accountant.

The IRS has changed how certain disregarded entities and certain qualified subchapter S corporations report and pay certain excise taxes and employment taxes. These regulations take effect as of January 1, 2009, for employment taxes, and took effect on January 1, 2008, for the applicable federal excise taxes.

Single-owner eligible entities (for example, limited liability companies that are disregarded entities) as well as qualified subchapter S subsidiaries, will be treated as separate entities under these regulations for purposes of excise tax and employment tax liability and reporting requirements. Effective January 1, 2008, the disregarded entity is responsible for the payment of federal excise taxes that involve petroleum products, ozone-depleting chemicals, wagering and highway motor vehicles.

Effective January 1, 2009, any disregarded entity will not be disregarded with respect to employment taxes and must report, collect and pay taxes for its own employees. Accordingly, the entity is treated as a corporation for purposes of employment taxes and related reporting requirements, even though it may be ignored for federal income tax purposes. There still is an exception for disregarded entities owned by Section 501(c)(3) tax-exempt organizations.

These new rules mean that single member limited liability companies and certain qualified subchapter S subsidiaries that have employees need to make sure that their payroll systems reflect the proper payor of all employment taxes as of January 1, 2009, and further ensure that the payor of any required excise tax payments is the previously disregarded entity.