Will We Get SE Tax Guidance Soon on "Limited Partners"
It appears that the IRS may be issuing proposed regulations on SE taxation of limited partners. But what does soon mean?
The IRS won a victory in the Soroban Capital Partners LP v. Commissioner Tax Court case decided in November 2023. That case involved active state registered limited partners who ran a hedge fund. There are several other cases before the Tax Court involving similar facts.
Although the IRS won the case, the Tax Court did not provide any guidance on what is or is not a limited partner for the Section 1402(a)(13) exception to self-employment taxes.
