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Effective Representation

Among our tax practitioners are attorney-CPAs, former IRS Office of Chief Counsel attorneys, and former attorneys with the United States Department of Justice Tax Division. Ten of our lawyers have advanced tax law degrees and three of our lawyers are listed in Best Lawyers in America ® 2016 for Tax law. We work directly with tax authorities at the highest levels of the IRS and the South Carolina Department of Revenue, and can draw on the firm’s full corporate law and litigation resources to offer clients comprehensive guidance on all business matters that the tax laws affect.

Tax law is central to our full range of core services at McNair. Our tax lawyers are engaged in general tax practice, including advising businesses and individual clients on the tax aspects of corporate and partnership/LLC organization and transactions, mergers and acquisitions, the purchase and sale of real property (including financing issues), in-bound/out-bound US international tax issues, leasing, IP licensing, state and local taxation, and the myriad of tax issues affecting business and personal decisions.

Any business transaction or personal decision, whether simple or complex, has potentially significant tax consequences. When advising on your business affairs and personal finances, McNair offers sophisticated and personalized tax counseling on federal, state and local tax to maximize your benefits. We closely monitor changing tax laws and regulations to give you the benefit of sophisticated tax planning, while structuring transactions, assets and operations to minimize taxes assessed against them.

Because every level of government has its own tax objectives, organization, statutes and regulations, the rules change constantly, and interpreting them takes skill, foresight and insight. We know that your real tax law objective is finding every legitimate way to minimize tax impact and to maximize your advantages to achieve your financial objectives. Whether you are a tax-exempt organization, an investor seeking to maximize tax credits, a company needing guidance on tax compliance for benefit plans or business transactions, or anyone facing a tax audit or controversy, McNair has experienced lawyers to assist you in your legal needs.

Choosing the right business entity to minimize taxes is the foundation of business tax planning, and McNair tax lawyers have substantial experience in this area. We help you evaluate whether an S Corporation, C Corporation, limited liability company (LLC) or partnership, or some other vehicle is the best way for you to meet your growth and financing needs while maximizing tax advantages. Then we will help you create the appropriate management and organizational structure. Because entity taxation differs from state to state, we keep current on the various intangibles taxes and transfer taxes that states impose. We are always alert to creative entity variations (for example, combining employee ownership within a partnership structure) that are best suited to meet any business tax planning need.

When structuring business arrangements, we prepare all necessary documentation in accordance with complex and changing tax law. McNair lawyers have experience providing such counsel to general and limited partnerships, limited liability companies and joint ventures for many business purposes. These arrangements can take many forms, each with their own tax advantages and special organizational requirements. Our lawyers have created private and public partnerships involving both large industry partners and large institutional investors. We also prepare and advise on small private partnerships between individuals for business and investment purposes.

Handling the tax aspects of M&A transactions is a major part of our practice. Because most business transactions, if not properly structured, have potential adverse tax consequences, we help business clients, including individuals who own businesses, structure transactions to avoid problems and to maximize business and tax benefits. If you are a company owner or chief executive, we offer you solutions to complex tax challenges in structuring like-kind exchanges, tax-efficient real estate transactions and tax-free corporate reorganizations. We can offer you tax strategies for mergers and acquisitions that give sellers the most tax-favorable stock/cash mix and capital gains treatment while maximizing buyer advantages from amortization, depreciation and borrowing cost.

Tax considerations are also essential to successful financing transactions. Chief financial officers, tax directors, securities underwriters and other key players in these transactions, call upon our lawyers for help with such financing vehicles as tax-free exchanges, derivatives products, tax exempt borrowings and tax-efficient recapitalizations. You’ll get help with the tax aspects of your most sophisticated financing needs, including:

  • Structured finance deals, as well as asset-backed securities, stock and commodities pools, and a full range of derivatives products
  • Leasing transactions, including leveraged and cross-border leasing, sale-leasebacks and municipal leasing
  • Public placements of convertible debentures and units consisting of stock and warrants, tax-free exchanges, hybrid debt and other innovative techniques.

Thoroughly understanding the goals and objectives of a real estate deal is fundamental to our transactional tax planning. We advise our clients on structuring the proper entity (limited liability company, limited partnership, or some other form) to make the purchase, a choice often crucial in obtaining favorable tax treatment for the transaction as a capital gain rather than as ordinary income, or as a transfer of membership interests in a partnership that helps avoid transfer taxes.

We are familiar with the South Carolina tax laws that apply to real estate transactions, and are adept at saving our clients substantial sums of money by structuring the sale of real property into trusts, partnerships and LLCs to secure the tax advantages. Similarly, for large, multi-investor transactions involving real estate investment trusts, we undertake the tax planning of real estate asset acquisitions and divestitures, often structuring partnership units to acquire real estate or other entities on behalf of our real estate clients.

Example of our Services
Real estate transactions are highly tax-intensive, and McNair has advised numerous property owners and developers, particularly in desirable coastal areas, on the best ways to minimize the tax code’s impact. We structure numerous 1031 like-kind property exchanges, and are particularly effective at conservation easement tax planning. If taxing authorities question valuation as the result of an easement audit, we are fully prepared to defend your transactional strategy in administrative forums and in court.

Reflecting South Carolina’s attractiveness to foreign companies looking to start US operations, we advise many companies headquartered in other countries on the form and structure these operations should take for effective tax treatment. Whether your concern is inbound or outbound taxation, we can advise you on the tax treatment of investment incentives, royalties, dividends and interest generated by the operations, and we have working knowledge of the international treaty provisions that restrict many of the options ordinarily available to strictly domestic operations. Where such restrictions affect repatriation of assets, we recommend effective alternatives to minimize the tax burden involved. That includes the use of tax treaties, conduit entities, hybrid entities and domestication of foreign corporations to optimize tax deferral where desired.

In addition to the tax aspects of ongoing operations, we advise domestic and foreign companies on the tax implications of mergers, acquisitions and joint ventures. In non-stock combinations, such as joint ventures with foreign partners, we ensure that the deal is structured to minimize the tax consequences. Where these combinations involve loans and letters of credit, we handle the tax issues that you will face as a borrower in making cross-border payments.

Finally, McNair tax lawyers use their knowledge of the tax laws to advise domestic and foreign companies on a host of day-to-day issues, including:

  • US tax treatment of foreign nationals working in this country
  • Tax laws of other countries as they apply to Americans working overseas
  • Tax planning for import/export operations, including the law as it applies to warehousing and shipping facilities
  • Tax implications of finance subsidiaries, payroll subsidiaries, self-insurance subsidiaries and other offshore corporations
  • International estate tax planning and administration.

McNair works with corporate clients, closely held family companies and individuals to analyze and minimize the impact of state and local taxes. Our lawyers regularly advise on state income taxes, property taxes, sales and use taxes, excise taxes and municipal license fees.

We help clients integrate operating groups and, if appropriate, restructure their consolidated groups to include partnerships and LLCs to minimize tax exposure. Such strategies involve a broad range of tax-oriented limited partnership and limited liability company offerings related to e-commerce, real estate, structured finance transactions and general business matters. We help clients plan tax minimization and compliance strategies regarding nexus and apportionment, and counsel on how best to properly minimize state income, franchise, sales, excise, property and other local taxes. We regularly advise clients on the state and local tax implications of:

  • Tax-free reorganizations, spin-offs, purchase and sale of businesses and assets
  • Bankruptcy and non-bankruptcy restructurings
  • Like-kind exchanges
  • Leasing transactions
  • Joint ventures

We also handle tax controversies and audits for business and individual clients with the South Carolina Department of Revenue, local county and municipal taxing authorities. We regularly represent clients in administrative tax appeals before the South Carolina Department of Revenue, and in judicial tax proceedings before the South Carolina Administrative Law Court, Circuit Courts, South Carolina Court of Appeals and the South Carolina Supreme Court. However, we also negotiate settlements with agents in the field and executive management at the South Carolina Department of Revenue to resolve a tax controversy for our clients without the need for trial.

Property taxes are a prime concern of real property owners, and McNair lawyers are experienced at handling the South Carolina property tax appeal process. Because an unsuccessful appeal can risk a higher assessment, we rarely enter the appeal process without thorough planning that offers a strong likelihood of success.

Our lawyers are frequently successful in first stage appeals to the property assessor, but are fully prepared to pursue the appeal process, if necessary. We work with qualified real estate appraisers to prepare the appeal. We are also skilled at using a real estate sale to appeal property taxes if the market value established by the transaction is below the tax assessment.

Example of our Services
When our client, a retailer/distributor of medicine and prosthetic devices, faced a challenge by the South Carolina Department of Revenue concerning a valuable sales tax exemption , McNair challenged the status quo, winning an important Administrative Law Court decision in favor of the client.

We use the full range of tools available to handle the estate planning needs of individuals and families to maximize advantages under the tax code. The tax strategies crafted for you make legitimate application of all the advantages allowed under law, and encompass effective ways to:

  • Estimate and minimize estate tax liability exposure
  • Create a variety of trusts and lifetime gifts to shelter family assets and minimize tax impact, such as revocable living trusts, charitable trusts, grantor retained annuity trusts, qualified personal residence trusts, insurance trusts and generation-skipping trusts
  • Diversify investments in ways that structure the estate to qualify for payment of estate taxes during an extended period of years
  • Minimize the value of a family business for federal estate tax purposes, while transferring control to the next generation or to new ownership outside the family.

We are committed to helping you manage and protect your wealth through effective tax, investment and personal planning strategies. You will receive estate planning solutions that are carried out the way you intend, maximizing financial benefits while minimizing taxes and fulfilling all fiduciary responsibilities.

Although these plans will fully provide for the distribution of assets that occurs after death, they also address numerous other issues that affect your financial future. For example, we can create a variety of trusts and lifetime gifts to shelter family assets and minimize tax impact, and establish independent asset management arrangements for your convenience. Our lawyers can integrate your insurance, tax-deferred compensation and IRA distributions, and provide for medical needs that involve elder care, incapacity or heirs with disabilities.

Whether your wealth and estate plan involves a simple will or a series of complex trusts, we work with executors and administrators to make sure all the details are handled properly.

Example of our Services
At McNair, our estate planning philosophy is the following: that we will advise clients over a period of many years, as their assets grow and estate needs change. For one client who owned and operated a successful business, we developed a plan spanning nearly 20 years that used sophisticated techniques to form new operating entities that would allow transfer of business assets to the younger generation in a tax-efficient way. Our strategy enhanced the family’s wealth, minimized their taxes and moved the business to a new generation of owners and managers.

Private sector employers need to ensure that the tax-qualified pension, employee benefit and profit-sharing plans they implement are properly documented and in full compliance with all government regulations. We take a comprehensive approach that encompasses the financial, tax, administrative and fiduciary responsibility issues that are central to effective compensation and benefit programs, and their integration with your specific employment policies and practices.

The result is innovative techniques to meet the benefit needs of employees and executives, while identifying ways to contain overall plan costs and avoid administrative errors that could disqualify the plans under IRS rules. And we make sure your plans are kept in full compliance with laws such as COBRA, ERISA (the Employee Retirement and Income Security Act), and HIPAA (the Health Insurance Portability and Accountability Act).

Example of our Services
McNair played a key role in the creation of one of South Carolina’s leading health care systems, created by private religious and government-owned institutions. After structuring the new entity as a 501(c)(3) organization, we have served as benefits counsel handling a wide range of issues. Our work has included securing IRS letter rulings on 401(k) and 403(b) pension plan compliance and deferred compensation programs (including those affected by Section 409A and 457(f) requirements), all the while making sure that Form 5500 plan reports are properly filed with the IRS.

Economic development financing is a complex undertaking that can combine tax incentives with government tax-exempt bond financing for infrastructure construction of industrial facilities, roads, sewers and public utilities, plus other related infrastructure. We play a central role in facilitating tax-exempt economic development financing for business and government throughout South Carolina as we work on such financing vehicles as industrial development revenue bonds, special assessment and special source revenue credits and bonds, and Fee-in-Lieu-of-Tax (FILOT) transactions. We understand how state government works at the highest executive and legislative levels, and our professional credibility means we are often successful at working with decision-makers to design solutions that reshape development law.

In counseling the governing bodies of more than half of South Carolina’s counties, and many of the state’s municipalities, McNair has served as bond counsel on a wide range of tax-exempt economic development, water, sewer and general obligation financings. We have also advised on financing for all four of the state’s major airports, and have handled tax-exempt financing for more than half of the state’s 85 school districts.

Example of our Services
One of South Carolina’s largest banks wanted to build a new North American financial headquarters in the state, planned as a campus development that would include over a dozen buildings and more than 1,000 employees. Appropriate economic development incentives ran into a constitutional roadblock: by state law, such incentives could not be granted to banks because of their tax status.

McNair lawyers proposed and lobbied for a change in the law and then structured a highly favorable incentive package. Weeks of high-level, nearly round-the-clock work were required.

Public and private foundations, charitable organizations, hospitals and educational institutions (including a South Carolina governmental organization created to assist school districts and county governments provide educational services to children with learning disabilities) seek our help to secure and maintain their tax-exempt status under the Internal Revenue Code. Because many tax-exempt organizations have operations that generate taxable revenue, an important part of that representation involves the tax treatment of excess benefit transactions and unrelated business income.

By the same token, hospitals and other health care organizations get the help they need on the tax treatment of divesting for-profit subsidiaries and divisions, and on mergers or joint ventures with other for-profit organizations. Our other services to tax-exempt clients include:

  • Representation before the IRS in letters of determination and responses to audits and inquiries
  • Creation of 501(c)(3) organizations as public charitable entities, and 501(c)(6) nonprofit business and trade associations
  • Bond counsel for issuing of tax-exempt securities
  • Assistance with calculating arbitrage profits earned on the investment of tax-exempt bond proceeds, and determining whether rebate payments on the investment yield must be made to the U.S. Treasury.

Example of our Services
We have helped several South Carolina universities form 501(c)(3) entities as tax-efficient vehicles to expand their student housing facilities. Our lawyers advised one such client on issuing tax-exempt bonds used to acquire more than 20 facilities that ultimately housed nearly 1,000 students. Currently, we are helping the university sell these facilities to another exempt organization, structuring the proceeds in a way that both pays off the bonds and makes additional funds available for student scholarships.

Student loan finance is an area of particular strength for McNair. We have represented state tax-exempt financing agencies in Colorado, Florida, Georgia, Kentucky and Tennessee as well as in South and North Carolina, and regularly advise on 103 and 150(d) programs. We handle student loan transactions marketed to investors (often large commercial banks) located in Britain, Ireland and elsewhere in Europe, including assisting with the listing of transactions on the Irish financial exchange.

Pooling is one of the most innovative school financing techniques available, and we regularly act as tax counsel in bond transactions that pool the financings of school districts and other 501(c)(3) exempt organizations. One of our largest financings was for over $700 million on behalf of eight South Carolina districts.

Example of our Services
We played the key role in the creation of the South Carolina Association of Governmental Organizations (SCAGO) as a non-profit 501(c)(3) corporation. SCAGO promotes financing and investment opportunities to benefit more than 60 participating South Carolina public school districts.

Investors, syndicators, developers and lenders have a big stake in the effective tax structuring of low-income housing and redevelopment projects. McNair has handled all the tax and related financing concerns for numerous tax credit transactions, including projects that are syndicated to investor groups. You get help with all of the multi-disciplinary issues that these projects can involve, including tax-exempt financing, tax analysis and structuring, and investor due diligence.

Whether your project is an inner-city low-income housing development, a mixed-income project or senior housing, you get a dedicated team that can handle all aspects of implementation.

Example of our Services
In the first industry-wide low income tax credit audit by the IRS, we represented multiple partnership taxpayers in US Tax Court. Our defense of all clients involved was effective, resulting in a favorable settlement with the government.

From Fortune 500 companies to individuals, clients seek our help when faced with an audit by the IRS or state or local tax authorities, or where the IRS or other tax bodies are attempting to collect a tax assessment. We will defend you in audit disputes and appeals, administrative hearings before the IRS and state and local taxing authorities, and in negotiations with tax officials--thanks to an approach that combines a willingness to litigate with the skill to work out a negotiated settlement.

You get the benefit of our experience and thorough familiarity with the procedures of taxing authorities at all levels to reduce proposed tax assessments, abate or waive penalties, obtain private letter rulings and other formal and informal advice, advise on IRS demands for documents and other information, and negotiate offers in compromise, lien releases and payment plans, and other administrative solutions to your tax problems.

Example of our Services
We advocated on behalf of our Fortune 500 client before the South Carolina Department of Revenue to secure approval for consolidation of state tax returns for individual divisions and subsidiaries. By reaching agreement with the DOR on a FILOT revenue arrangement, we saved our client from constantly having to prepare and submit multiple tax returns when its operations relocated or expanded.

  • McNair successfully resolved an IRS audit, appeal and resulting US Tax Court case involving an asserted $50 million income tax deficiency against a US multinational corporation and foreign affiliates. It included over 250 separate adjustments and issues, including transfer-pricing, treaty-based competent authority proceedings, inventory valuation and officer compensation.
  • McNair lawyers regularly represent hundreds of individuals and businesses in IRS and state tax collection matters, including offers in compromise, installment agreements and bankruptcy/tax advice.