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Category: Tax & Wealth Management Services

Tax Law Proposal May Require Action Now

and
September 21, 2021

Gary ZwickSeptember 21, 2021 

The Biden administration has been warning taxpayers that they should expect to see major changes to the tax code in order to pay for infrastructure and to “make the wealthy pay their fair share” in taxes. It is still unclear exactly what changes will be made, if the changes will be passed and, if passed, what the effective date(s) of the changes will be. Due to the uncertainty, many taxpayers, particularly those in the under $25 million net worth category, have been advised to wait until there is clarity.

An expected tax code change that is of concern to most planners and wealthy taxpayers is the proposed reduction in the gift and estate tax exemption from the current $11.7 million per person to about half of that. While this change would have relatively little effect on taxpayers with substantial wealth, it would be significant to those who are modestly wealthy. This reduction would become effective January 1, 2022 in every serious proposal being considered. This effective date would suggest that there is still a lot of time to make gifts to lock in the current exemption, should a change occur, and many are being advised that there is sufficient time.

However, the most recent proposal to come out of the House Ways and Means Committee hits on a different tax concern and can drastically complicate transfer tax planning. On September 13, 2021, the House Ways and Means Committee submitted a proposal that would strike down the effectiveness of grantor trusts – one of the most powerful tools in a tax attorney’s toolbox.  While the potential change has been talked about for a while, it has now found traction in the latest bill which is likely to be passed. Unfortunately, this change would be effective from the date of the bill’s enactment. This is highly likely to occur before year end. This makes it much more urgent to make gifts and finalize planning even though we do not know whether or not the new bill will even be approved or what will be in the actual terms of the bill.

If your plan, should the proposed bill be passed by Congress, is to give away your remaining gift tax exemption to persons other than your spouse, outright or in a newly created trust, then there is likely no urgency to act at this time. If, however, you would like to use your exemption before year end, but have it be placed in trust for the use of your spouse before it goes to your heirs – a so-called Spousal Lifetime Access Trust (“SLAT”) – then you need to decide to move forward before the end of the year and before you know if the current bill will be passed by Congress.

A SLAT is a trust set up by one spouse for the benefit of the other spouse which is not included in the estate of the transferee spouse, and if properly structured, will also not be included in the estates of the heirs. A SLAT uses the gift tax exemption of the transferor spouse, removes appreciation in the assets from the estate of both spouses, but allows the couple to maintain the income and the use of the property transferred into the trust. Married couples with under $25 million in wealth would be the most likely candidates for a SLAT, because they would suffer from a reduction in the estate and gift tax exemption, but do not have sufficient wealth to be able to give away up to the estate and gift tax exemption amount without being able to have access to such amount if needed.  A SLAT is a wonderful planning technique, but is by its nature, a grantor trust, and it will be impacted if the proposal bill is passed in its current form.  Therefore, if a SLAT is the method you would use to make gifts to use up your remaining current gift tax exemption, then you need to decide whether you would be willing to set one up without knowing if the law will pass, and you need to make that decision and act soon.  Once the bill becomes law and is enacted, it will likely be too late to use this technique. If you think you fit this description, contact us below to discuss your action plan.

Lacie O’Daire is chair of the Tax and Wealth Management Group at Walter | Haverfield. She can be reached at lodaire@walterhav.com and at 216-928-2901.
Gary A. Zwick is a partner in the Tax and Wealth Management Group at Walter | Haverfield. He can be reached at gzwick@walterhav.com and at 216-928-2902.

Ohio Extends Tax Filing Deadline


March 25, 2021

March 26, 2021

The Ohio Department of Taxation is following suit with the Internal Revenue Service to delay this year’s deadline to file individual Ohio income tax returns (Ohio Form IT 1040) and school district income tax returns (Ohio Form SD 100) for tax year 2020. The new deadline is May 17, 2021, an extension of about a month. Ohio will waive the penalty on tax due payments made during the extension, and will not charge interest on payments made during the extension.

Although the Ohio Department of Taxation is delaying the deadline to file individual state income tax returns for tax year 2020, the first quarter estimated income tax payments for tax year 2021 are not impacted and must still be made by April 15, 2021.

Mike Sorice is an associate in the Columbus, Ohio office of Walter | Haverfield. He assists closely-held businesses with business succession planning, mergers and acquisitions, and tax planning. Mike can be reached at 614-246-2262 or msorice@walterhav.com.

The Freeze Partnership Technique: Achieving the Best of Both Worlds by Transferring the Appreciation of the Business Assets and Securing the Step-Up in Basis


December 14, 2020

December 14, 2020 

Overview

The freeze partnership technique (the “technique”) to shift wealth to the next generation while saving estate, gift, generation skipping, and income taxes has been in use for decades, although you wouldn’t know it. Even though this technique is expressly sanctioned under Internal Revenue Code (“I.R.C.”) §2701[1], in practice it is probably the least utilized estate freeze option.  Alternative freeze methods such as the grantor retained annuity trusts (“GRATs”), and the installment sales to intentionally defective grantor trusts (“IDGTs”) have become popular because they are simpler or may be more flexible.  But those methods have severe limitations when dealing with negative capital account assets and where mortality risk of the grantor is a very real concern.   When properly structured, the freeze partnership technique can avoid the unintended adverse income tax consequences triggered by other freeze alternatives securing a step-up in basis for the business assets and eliminate the negative income tax consequences for the succeeding generation. Because various estate and income tax-planning objectives can be achieved where other techniques fail, planners should not be reluctant to add the partnership freeze to their repertoire and implement this technique when appropriate circumstances call for it.

The Technique

In general terms, the technique is in many respects similar to a corporate recapitalization. A freeze partnership could be a limited partnership or a limited liability company (referred as “preferred partnership”) with at least two classes of interests, a preferred interest and a subordinate interest, which is akin to a common interest to which most of the appreciation will accrue. The preferred interest may be issued in exchange for capital contributions at the inception of the entity, or they may be issued as part of the recapitalization of an existing entity.

The preferred interest will be entitled to a preferred return and a liquidation preference, whereas the subordinate interest will be entitled to growth and appreciation of the assets.  With a family controlled entity, strict requirements of I.R.C. §2701 must be satisfied to avoid a zero valuation for the preferred interest[2]. The preferred interest can avoid the zero valuation if it has a right to receive a qualified payment[3] and a liquidation preference stating that before dissolution of the company the stated dissolution preference will be paid to the members holding the preferred interest.  The rules require that the subordinate interest have a value of not less than 10% of the value of the company, plus the value of any debt of the entity held by the transferor.

The Implementation of the Technique

As a hypothetical of how this technique could work, let us imagine a taxpayer who is a successful real estate entrepreneur, in his sixties, has children, and made minimal previous taxable gifts. The taxpayer owns several real estate properties under a holding company.  It is a partnership for tax purposes and the taxpayer owns nearly all of the interests in the entity.  Because he held the real estate assets long term, the taxpayer took advantage of the depreciation deductions and distributed proceeds of nonrecourse financings causing him to have a significant negative capital account even though the properties have appreciated significantly in value. The deferred income tax liability may exceed the value of the real estate causing a problem for the taxpayer. How do we facilitate the taxpayer getting value to his children thereby taking advantage of the temporarily increased lifetime exemption[4] without causing income tax issues? Dying while still owning the properties will erase the income tax but holding the properties until death will cause a significant estate tax.  Moreover trying to control the estate tax through the use of GRATs or sales to grantor trusts creates an extreme risk of failure because of the income tax liability[5].

Consequently, in this set of circumstances, a freeze partnership can achieve many of the taxpayer’s goals. Correctly done, creating the partnership with two classes of units has no income tax consequence on formation, the value of the preferred interest retained by the parent is frozen but for changes in interest rates and other indicators of value for preferred interests, and upon death, the negative capital account attributable to the preferred interests is erased (barring the enactment again of carryover basis).

One way to implement this technique involves the following steps:  First, taxpayer forms a new limited liability company (“LLC”). Second, taxpayer contributes 100% of his interest in the holding company in exchange for a preferred interest that is entitled to a fixed qualified payment and a liquidation preference in the new LLC. Third, to comply with the complex partnership income tax rules and maintain the allocation of non-recourse debt to the preferred interest, taxpayer will gift enough cash to his children to contribute to the new LLC in exchange for a subordinated interest worth 10% of the value of the entity, which will be entitled to growth and appreciation over and above the preferred return. A variation on this would be for the taxpayer to gift the cash to irrevocable grantor trusts for the benefit of his children so that their interests are outside of their estates on their deaths.  However, if all of the interest in the new LLC is owned either by grantor trusts or the grantor, the new entity will not qualify as a partnership and not get the benefit of the freeze technique.  In that case, make sure that a small interest in the entity is held by the children outright so as to avoid this pitfall. Fifth, through proper design of the allocation of rights, preference and distributions under the operating agreement and taking advantage of the discounted value of the preferred interest, taxpayer will be able to allocate the cash flow first to the qualified payment and shift the surplus of the remaining cash flow to the next generation. Finally, taxpayer will receive the cash flow needed for life, will obtain the step-up in basis at death for the preferred interest, and will ensure to the extent possible that regardless of the appreciation of the underlying assets, no estate tax will be owed.

Drafting Consideration for the Partnership/Operating Agreement

In order to accomplish all the goals detailed in the above hypothetical, special attention should be given to the written operating agreement. The operating agreement should provide for a fixed annual cash distribution payable to the member holding the preferred interest before any distributions are made to the members holding the subordinate interests. The amount distributed as a qualified payment cannot be contingent on the entity earnings. Ultimately, if the four-year grace period, as described in I.R.C §2701(d)(2)(C), expires, it must be paid from capital if earnings are insufficient, or, alternatively, could be delayed to be paid not later than the eight years after the due date if the operating agreement provides that interest accrues on the unpaid distribution compounded annually at the rate prescribed under I.R.C §7520. A provision providing flexibility for the manager to issue additional units for the subordinate interest in case a different valuation of the preferred interest is finally determined by the Internal Revenue Service (“IRS”) is necessary to ensure that the subordinate interest will have a minimum of 10% equity in entity regardless of the IRS determination of value. Also, the dissolution provision should limit the participation of the members holding the preferred interest beyond the principal and preferred rate of return to avoid a higher valuation of the preferred interest.[6]

Conclusion

Effective implementation of the freeze partnership technique requires working knowledge of the partnership rules, experience with the intricacies of drafting an operating agreement, and careful evaluation of the estate, gift and income tax-planning considerations. Even though, at first glance, this technique may be intimidating because of the significant complexities governed by I.R.C. §2701, when it comes to planning for holdings with negative capital, the partnership freeze technique has certain distinct advantages over a GRAT or IDGT by providing certainty as to the ability to obtain a step-up in basis upon death and transferring the appreciation in value to the next generation.

*This article was also published in the December 2020 edition of the Cleveland Bar Journal. 

Sebastian Pascu is an associate at Walter | Haverfield who focuses his practice on Tax & Wealth Management. He can be reached at spascu@walterhav.com or at 216-619-7870. 

[1] Unless otherwise indicated, all section references are to the Internal Revenue Code of 1986, as amended.

[2] A comprehensive presentation of the special valuation rules of I.R.C §2701 is beyond the scope of this article.

[3] See Treas. Reg. §25.2701-2(b)(6) (a distribution right in a family controlled entity has value under I.R.C. §2701 only if it is a qualified payment right cumulative in nature and paid at least annually).

[4] As part of the Tax Cuts and Jobs Act of 2017, the gift and estate tax exemption amount was doubled, with the inflation-adjusted amount in 2020 being $11.58 million. The increase is set to expire December 31, 2025, but political climate may alter the expiration date.

[5] There is uncertainty whether the grantor’s death will give rise to a step-up in basis. For specific rules regarding property acquired from a decedent, see Treas. Reg. §1.1014-2.

[6] A comprehensive list of elements needed to be included in an operating agreement to accomplish the partnership freeze technique is beyond the scope of this article. The elements provided are some of the key provisions needed to accomplish the freeze and avoid the negative impact of I.R.C. §2701.

Paycheck Protection Program: IRS Confirms Expenses Are Not Deductible

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November 19, 2020

November 19, 2020

Our firm continues to stay on top of the Paycheck Protection Program (PPP) and its impact on our business clients, and individual owners of flow-through entities. With some very timely guidance, the U.S. Treasury Department and IRS released direction clarifying the tax treatment of expenses where a PPP loan has not been forgiven by the end of the year, which is most of our clients.

Background Information on PPP

On March 13, 2020, President Trump declared the ongoing Coronavirus Disease 2019 (“COVID-19”) pandemic of sufficient severity and magnitude to warrant an emergency declaration for all states, territories, and the District of Columbia. With the COVID-19 emergency, many small businesses nationwide were experiencing economic hardship as a direct result of the federal, state, tribal, and local public health measures that were being taken to minimize the public’s exposure to the virus. These measures, some of which were government-mandated, have been implemented nationwide and include the closures of restaurants, bars, and gyms. In some cases, other measures such as stay-at-home orders were implemented, resulting in a dramatic decrease in economic activity as the public avoided malls, retail stores, and other businesses.

On March 27, 2020, the President signed the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) (Pub. L. 116-136) to provide emergency assistance and health care response for individuals, families, and businesses affected by the coronavirus pandemic. The SBA received funding and authority through the CARES Act to modify existing loan programs and establish a new loan program to assist small businesses nationwide adversely impacted by the COVID-19 emergency.

Section 1102 of the CARES Act temporarily permitted the SBA to guarantee 100 percent of 7(a) loans under a new program titled the “Paycheck Protection Program.” Under the PPP, the borrower must use loan proceeds for certain qualifying expenses, including payroll costs, payments of covered rent obligations, and covered utility payments. Section 1106 of the CARES Act provided for forgiveness of up to the full principal amount of qualifying loans guaranteed under the PPP.

On April 24, 2020, the President signed the Paycheck Protection Program and Health Care Enhancement Act (Pub. L. 116-139), which provided additional funding and authority for the PPP. On June 5, 2020, the President signed the Paycheck Protection Program Flexibility Act of 2020 (Flexibility Act) (Pub. L. 116-142), which changed provisions of the PPP relating to the maturity of PPP loans, the deferral of PPP loan payments, and the forgiveness of PPP loans. On July 4, 2020, the President signed into law S. 4116, which reauthorized lending under the PPP through August 8, 2020 (Pub. L. 116-147).

Deductible or Not Deductible, that is the Question?

According to the IRS, since businesses are not taxed on the proceeds of a forgiven PPP loan, the qualifying expenses are not deductible. The IRS rationalizes this position by claiming that this results in neither a tax benefit nor tax harm since the taxpayer has not paid anything out of pocket.

In its recent ruling, the IRS ultimately concluded that if a business reasonably believes that a PPP loan will be forgiven in the future, qualifying expenses related to the loan are not deductible, whether the business has filed for forgiveness or not. Therefore, the IRS encourages businesses to file for forgiveness as soon as possible.

According to the IRS, in the case where a PPP loan was expected to be forgiven, and it is not, businesses will be able to deduct those expenses in the future.

Conclusion

In sum, although this guidance represents much-needed guidance and clarity, it was not unexpected. We have been advising our clients for some time to ensure they are planning for the expectation that certain expenses paid related to the PPP will not be deductible and therefore will result in an increase in tax liability. But, let’s also remember that each of the businesses and their owners benefited tremendously from the use of the PPP loan proceeds. We are working diligently to stay on top of these changes, and will follow-up on any additional guidance.

We would encourage you to review the IRS Revenue Ruling here.

Mike Sorice is a law clerk in the Columbus, Ohio office of Walter | Haverfield. He recently graduated from the Ohio State University Moritz College of Law.

Vince Nardone is Partner-in-Charge of Walter | Haverfield’s Columbus office. He serves as a business advisor to owners and executives of closely-held businesses, counseling them on business planning, tax planning and controversy, cash-flow analysis, succession planning, and legal issues that may arise in business operations. Vince can be reached at 614-246-2264 or vnardone@walterhav.com.

Status Update: Ohio’s Proposed Tax Amnesty Program Offers Settlement Opportunities for Individuals and Businesses with Tax Liabilities

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November 2, 2020

November 2, 2020

In a previous client alert here, released on June 12, 2020, Vince Nardone and Mike Sorice discussed a proposed tax amnesty plan passed by the Ohio House of Representatives set to begin on January 1, 2021. Although the program passed the House of Representatives in mid-May, to date, the proposed tax amnesty is still under review by the Ohio Senate’s Ways and Means Committee, even with the proposed amnesty period right around the corner.

On May 20, 2020, the Ohio House of Representatives unanimously approved a new tax amnesty proposal (HB 609) that would raise revenues for the state and provide relief for taxpayers while Ohio’s economy recovers from the COVID-19 pandemic. The tax amnesty program would establish an amnesty period during which taxpayers with unreported or underreported Ohio taxes could discharge their tax debts by paying the delinquent tax without paying penalties and interest.

If approved by the Senate and signed by Governor DeWine, the temporary amnesty period would run from January 1, 2021, to March 31, 2021. For more information on the proposed tax amnesty program, including covered taxes, please visit our previous alert on this topic here.

Mike Sorice is a law clerk in the Columbus office of Walter | Haverfield. He recently graduated from the Ohio State University Moritz College of Law.

Vince Nardone is Partner-in-Charge of Walter | Haverfield’s Columbus office. He serves as a business advisor to owners and executives of closely-held businesses, counseling them on business planning, tax planning and controversy, cash-flow analysis, succession planning, and legal issues that may arise in business operations.

Ohio’s Proposed Tax Amnesty Program Offers Settlement Opportunities for Individuals and Businesses with Tax Liabilities

and
June 12, 2020

 

June 12, 2020

The Ohio House of Representatives has unanimously approved a new tax amnesty proposal (HB 609), would raise revenues for the state and provide relief for taxpayers while Ohio’s economy recovers from the COVID-19 pandemic. This program, which is now under review by the Ohio Senate’s Ways and Means Committee, presents opportunities for our clients to minimize the costs of unreported and underreported tax liabilities.

Tax amnesty programs relieve taxpayers who owe past-due taxes and fees while raising revenue for the taxing authority. This creates a win-win situation. Without such programs, taxpayers who owe must pay penalties and accrued interest.

In economic downturns, tax planning is critical to ensure the long-term health of a business. Therefore, it’s important that our clients avail themselves of voluntary disclosure programs and tax amnesty programs offered by federal, state, and local taxing authorities to minimize the impact of delinquent or unpaid tax liabilities.

Details of the bill are as follows:

The Amnesty

The tax amnesty bill would establish an amnesty period during which taxpayers with unreported or underreported taxes could discharge their tax debts by paying the delinquent tax without paying the penalties and interest (the “amnesty”). The three-month, temporary amnesty period would run from January 1, 2021, to March 31, 2021.

Under this proposal, the Tax Commissioner must waive penalties and accrued interest if an eligible taxpayer pays the full amount of included taxes or fees during the amnesty period. The tax amnesty bill also authorizes the Commissioner to require a taxpayer to file returns or reports, including amended returns or reports.

In addition to the waiver of penalties and interest, the taxpayer would be immune from criminal prosecution or any civil action concerning the taxes paid. Further, no assessment may be issued against the taxpayer for that tax or fee.

Covered Taxes under the Proposed Tax Amnesty Bill

The amnesty only applies to covered taxes and fees and does not apply to local taxes.  Covered taxes include:

  • Ohio income tax
  • Commercial activity tax
  • State sales and use taxes
  • Financial institutions tax
  • Public utility excise taxes
  • Kilowatt hour tax
  • MCF (natural gas) excise tax
  • Insurance premium taxes
  • Cigarette/tobacco/vaping excise taxes
  • Alcoholic beverage taxes
  • Motor fuel excise tax
  • Fuel use tax
  • Petroleum activity tax
  • Casino wagering tax
  • Severance taxes
  • Wireless 9-1-1 charges
  • Tire fees
  • Horse racing taxes

The amnesty does not apply to school district income taxes or county and transit authority sales and use taxes. Further, the amnesty only applies to unreported or underreported taxes that were due and payable as of the bill’s effective date. It does not apply to any taxes if the Ohio Department of Taxation has issued a notice of assessment or audit, issued a bill, or if an audit has been conducted or is pending.

Past Tax Amnesty Programs

Ohio has conducted several general tax amnesty programs in the past. Ohio’s most recent tax amnesty program, conducted from January 1, 2018, through February 15, 2018, raised $14.3 million for Ohio’s coffers while it decreased the cost of compliance for taxpayers with delinquent or unreported taxes. Ohio also conducted tax amnesties in 2002, 2006, and 2012.

Utilizing tax amnesty and voluntary disclosure programs is one of several strategies to minimize the impact of falling behind on tax obligations, and Walter | Haverfield’s attorneys are monitoring all such opportunities. Let our attorneys apply their experience, passion, and attention to detail to help develop the best strategies to minimize the impact of tax liabilities.

To read more about this topic, click here for a Law 360 article titled “Ohio Oks Tax Amnesty To Boost Pandemic Recovery”

Vince Nardone is Partner-in-Charge of Walter | Haverfield’s Columbus office. He serves as a business advisor to owners and executives of closely-held businesses, counseling them on business planning, tax planning and controversy, cash-flow analysis, succession planning, and legal issues that may arise in business operations.

Mike Sorice is a law clerk in the Columbus, Ohio office of Walter | Haverfield. He recently graduated from the Ohio State University Moritz College of Law.

Medical Providers Receive Pandemic-Related Federal Stimulus Payments


April 17, 2020

April 17, 2020

As part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the U.S. Department of Health and Human Services (HHS) began distributing $30 billion on Friday, April 10, 2020 to U.S. medical providers who received Medicare fee-for-service (FFS) reimbursements in 2019. The funds, which are not loans and do not need to be paid back, are being directly deposited into providers’ accounts.

Providers are receiving about 1/16th of his/her Medicare FFS reimbursements in 2019 in the form of a stimulus payment. If a provider did not bill Medicare in 2019 for FFS, the provider will not receive money from this distribution.

The funds are meant to be used to cover health care-related expenses or lost revenue due to the coronavirus pandemic. Examples of expenses identified in the CARES Act include building or construction of temporary structures, leasing of properties, buying medical supplies, personal protective equipment and testing supplies, increasing one’s workforce and holding trainings, and retrofitting facilities. However, providers can essentially use the funds as they see fit, as long as they do not use them to reimburse expenses or losses that have been reimbursed from other sources, or that other sources are obligated to reimburse.

Providers are required to document how the stimulus payment is used. They will also be required to submit reports to ensure compliance with the payment. But details of what those reports will entail have not been made available yet.

Additionally, those who receive stimulus payments from HHS are not exempted from receiving other forms of relief.

The $30 billion distribution is part of $100 billion relief fund appropriated in the CARES Act to the Public Health and Social Services Emergency Fund (PHSSEF), also called the CARES Act Provider Relief Fund. HHS intends to distribute more relief funds in the future, particularly to providers hit hard by the pandemic as well as those who serve rural areas, the Medicaid population and the uninsured, and those with lower shares of Medicare FFS reimbursement.

If you have further questions, please reach out to us here. We are happy to help.

Lacie O’Daire is chair of the Tax and Wealth Management Group at Walter | Haverfield. She can be reached at lodaire@walterhav.com and at 216-928-2901.

 

 

Walter | Haverfield Offers Online Notary Services


March 30, 2020

Updated May 312, 2020 

If you are a Walter | Haverfield client who needs documents notarized, we are here to help. We are certified through the Ohio Secretary of State to notarize documents online for individuals in and outside the State of Ohio. No in-person meeting is necessary. Details on what is needed in order to participate in an online notary service as well as a description of the process are below.

Participant Requirements:

  • Access to the following: a computer, internet and webcam
  • Driver’s license or passport
  • Digital version of documents that need to be notarized
  • Must be a Walter | Haverfield client

E-Notary Process (takes about five minutes):

  • A link to join the e-notary process is sent to the participant
  • Once a participant clicks on the link, the e-notary software is launched online and a credential analysis begins
  • During the credential analysis process, the participant uploads his/her driver’s license or passport
  • The software analyzes the license/passport and asks a series of questions to verify one’s identity
  • An e-signature is adopted, and the Walter | Haverfield notary digitally applies the seal and signature to the document(s)
  • An email is then sent to the participant with a copy of the notarized documents

Ohio is one of 36 states that allows documents to be e-notarized. In Cuyahoga County, there are about two dozen e-notaries.

Please note that online notary services are not available for depositions.

We look forward to maintaining our strong working relationship with you during this time and keeping in close contact via phone, email or video conference. If you are a Walter | Haverfield client in need of our online notary service or have questions, please email us here. Individuals who are not Walter | Haverfield clients may visit sites like notarize.com.

 

Federal and Ohio Tax Filing Deadline Moved to July 15


March 17, 2020

Updated March 30, 2020

In response to Covid-19 (coronavirus), the Secretary of Treasury released guidance on March 20, 2020 providing for an extension to file tax returns for 90 days aligning the due date with the previously extended due date for tax payments. In addition, the IRS and Treasury expanded the earlier guidance permitting unlimited tax deferral, interest and penalty free, for individuals and business for the 90-day extended period.

On Friday, March 27, 2020, Tax Commissioner, Jeff McClain, announced that Ohio will be following the federal government guidance in extending from April 15 to July 15 the deadline to file and pay Ohio state tax. No interest and penalties will be charged against any tax-due payments during the extended period. This delay will apply to the Ohio individual income tax, the school district income tax, the pass-through entity tax and some municipal net profits tax.

The announcement did not include information regarding any other taxes such as sales and use taxes, commercial activity taxes, withholding taxes.

We will continue to monitor the development and will keep you posted.

Sebastian Pascu is an associate at Walter | Haverfield who focuses his practice on Tax & Wealth Management. He can be reached at spascu@walterhav.com or at 216-619-7870. 

Walter | Haverfield Tax Partner Updates Tax Book for Family Businesses


August 13, 2019

Gary Zwick

First published in 1999, an updated and re-published version of “Tax and Financial Planning for the Closely Held Family Business” is now available for preorder. Gary Zwick, a partner and CPA with Walter | Haverfield’s Tax and Wealth Management group, wrote and updated the book with James John Jurinski. Jurinski is an attorney and CPA as well as professor of accounting and law at the University of Portland’s Pamplin School of Business.

“Tax and Financial Planning for the Closely Held Family Business,” published by Edward Elgar Publishing, offers non-traditional techniques to help business advisors craft strategies for their clients. It also offers solutions to family businesses and their owners.

“This type of work requires the ability to nimbly apply not only legal, business and tax law principles, but also requires the advisor to be able to understand nuances of how families work in the context of the family business,” said Ronald Levitt, an Alabama-based attorney who focuses on business and tax planning issues for closely held businesses. “Zwick and Jurinski have found a way to pull all of those issues and nuances together in a book that clearly lays out the issues and problems that advisors face in representing family businesses.”

In the book, Zwick and Jurinski rely on their extensive experience in guiding family businesses through a maze of organizational, tax, financial, governance, estate planning and personal family issues.

Zwick and Jurinski also co-authored the book, “Transferring Interests in the Closely Held Family Business,” published in 2002 by ALI-ABA. This book is in the process of being updated and re-published by Edward Elgar Publishing.

Additionally, Zwick has written more than a dozen feature articles for major tax publications. He also wrote the chapter titled, “Property Received in Exchange for Services – Section 83” for the Lexis Nexis Online Encyclopedia. For many years, Zwick was the Tax Clinic editor of the August rotation in the Tax Adviser, the AICPA’s national tax publication. He is also a contributor to the ALI-ABA Practice Checklist Manual on Advising Business Clients II and the book, “Golden Opportunities,” by Amy and Armond Budish.

Zwick is a frequent speaker, both locally and nationally, to tax professionals on a variety of related topics. He is board certified in federal tax by the Ohio State Bar Association and former Chair of the Federal Tax Specialty Board of the Ohio State Bar Association. He continues to serve on the Federal Tax Specialty Board of the Ohio Bar Association. He was an adjunct professor of Wealth Transfer Tax and Estate Planning at Case Western Reserve School of Law and an adjunct professor of Tax Law and Wealth Transfer Tax at Cleveland State University College of Law.

To preorder “Tax and Financial Planning for the Closely Held Family Business,” click here.