Although the tax code does not have a section labelled “closely owned” or “privately held” tax, this best describes the kinds of tax services that Clingen Callow & McLean, LLC provides to its clients. Each stage in the life cycle of a privately owned business implicates Federal income estate and gift taxes. Clingen Callow & McLean, LLC provides the needed guidance to its clients in each of these stages.
Organizing or Acquiring a Business.
Clingen Callow & McLean, LLC guides clients on the important “choice of entity” decision and recognize that a particular entity structure for one type of business may be a disaster for another. We analyze among the primary choices of corporate partnership and LLC form and whether an “S” election is advisable and whether certain cutting edge techniques like Series LLC’s can be used or avoided in favor of more transitional methods. We are familiar with the “check the box” regulations and the unprecedented flexibility available to the client for entity choice, whether that is for a new business, existing business or an acquisition.
Tax issues arise on a day to day basis for clients as the inevitable result of operating a business with a complex Internal Revenue Code. These range from the desire to know the tax implications of a particular transaction to worker classification and income tax audits. Clingen Callow & McLean, LLC provides day to day counselling on tax issues for its clients, primarily in Federal and Illinois income tax areas.
Anyone operating a business faces a myriad of income and employment tax regulation at the federal state and local level. Clingen Callow & McLean, LLC regularly assists clients in dealing with administrative agencies, including the IRS and Illinois Department of Revenue to solve their tax issues. Clingen Callow & McLean also maintains a referral network of capable attorneys, many of them former IRS or Illinois Department of Revenue employees, who can assist clients as needed.
We assist our client’s tax needs in a number of different ways in the area of business succession.
As part of our design of equity based compensation and incentive plans, we present our clients with an array of alternatives and the associated federal income tax consequences of choosing between Stock Appreciation Rights, option, restricted stock and phantom stock plans. Due to the surge in the number of LLC’s, taxed as partnerships, we also take care to differentiate the tax consequences arising in partnership form as to the more familiar corporate form.
We also structure shareholder agreements and LLC operating agreements mindful of the Federal income estate and gift tax consequences. Many of our clients are family owned and desire to transfer their business interests to family in a way that will not unduly penalize them for their success. We assist in designing wealth transfer strategies to reduce Federal Estate tax exposure while hewing to the goals of perpetuating the family business and promoting family harmony. We are knowledgeable about the special valuation rules of Chapter 14 of the Tax Code and navigating around the land mines of this Section and other sections that can undo an otherwise well thought out business plan.
Whether our client is a buyer or seller, we make sure to counsel them about the after tax return in a merger and acquisition transaction. We show them the significant effect that a particular allocation of purchase price may have upon that after tax returns. We assist in the design of the transaction to maximize the client’s goals.