Attorneys
Worcester
Worcester
The Guaranty Building
370 Main Street, 12th Floor
Worcester, MA 01608
Framingham
Framingham
The Meadows
161 Worcester Road, Suite 501
Framingham, MA 01701
Cape Cod
Cape Cod
1597 Falmouth Road
Centerville, MA 02632
Medfield
Medfield
Olde Medfield Square
266 Main Street, Bldg. 2, Suite 15A
Medfield, MA 02052
New Bedford
New Bedford
651 Orchard Street, Suite 107
New Bedford, MA 02744
Providence
Providence
1 Richmond Square, Suite 303N
Providence, RI 02906
Boston
Boston
12 Post Office Square, 6th Floor
Boston, MA 02109
Hudson
Hudson
69 Main Street
Hudson, MA 01749
Practice Areas
Niche industries
Open detail
Cannabis & Breweries
Cannabis & Breweries
Open detail
Closely Held and Family-Owned Businesses
Closely Held and Family-Owned Businesses
Open detail
Condominiums
Condominiums
Open detail
Medical & Dental Practices
Medical & Dental Practices
Open detail
Private Foundations
Private Foundations
Open detail
Real Estate Developers
Real Estate Developers
Open detail
Restaurants
Restaurants
Open detail
All Industries
  • Multiple Dates

Estate Planning Webinar

Please join Fletcher Tilton Tax Attorney and Certified Elder Law Attorney Michael T. Lahti for an informative webinar. In the comfort of your own home or office, you will learn why some wills do not work, even when drafted correctly.  Details for the next upcoming date.

SHOW ALL UPCOMING DATES

Learn More
Learn More
  • Multiple Dates

How to Administer a Special Needs Trust

This annual training and update for Parents, Trustees and Successor Trustees of Special Needs Trusts and OBRA ‘93 Trusts has been reconfigured into a three-part series of evening webinars to accommodate these unusual times.  Details for the next upcoming date.

SHOW ALL UPCOMING DATES

Learn More
Learn More
Learn More
  • Tue. Nov. 17, 2020
  • 6:00-7:00 PM
 

Thrive Support & Advocacy Virtual Workshop

Fletcher Tilton attorney Theresa Varnet, M.S.W., J.D. will speak about ABLE Accounts with 1st and 3rd Party Special Needs Trusts.

Learn More

Learn More

View Past Seminars

Articles

Avoiding IRS Attacks on FLPs and LLCs

By Dennis F. Gorman on July 18, 2019

The IRS has published some appeals-settlement guidelines, which taxpayers can use to properly set up and run Family Limited Partnerships and Limited Liability Companies in order to achieve estate and gift tax discounts and savings. The guidelines are part of an ongoing attack by the IRS on aggressive use of FLPs and LLCs by taxpayers. Basically, you need to address three issues when employing FLPs and LLCs in estate planning. They are:

  • Avoid taking excessive discounts for minority interest, lack of control and/or lack of marketability when gifting FLP or LLC shares to your children. Case law over the last several years supports a discount of 30% to 40%, depending on various factors, including the nature of the assets held in the FLP or LLC. However, if you claim a discount that exceeds 30-35%, you would likely face IRS scrutiny.
  • The IRS has the ability to essentially “pull back” into your taxable estate previous lifetime transfers of percentage interests in FLPs and LLCs, when you have retained too much control or use of the entity.
  • The IRS has been principally focusing on the following fact scenarios, with which the agency has been successful in the courts:
  • The taxpayer fails to keep independent accounting records for the operation of the FLP or LLC.
  • The taxpayer transfers either all or substantially all of his or her assets to an FLP or LLC, leaving him or her no independent assets for support. For example, the taxpayer transfers his or her residence into the FLP or LLC and continues to live there without paying rent, thereby ignoring the formality of the entity.
  • The taxpayer commingles his or her personal funds with the FLP’s or LLC’s assets, again, ignoring the formality of the entity.
  • The FLP or LLC fails to make distributions of profits to the entity’s owners proportionate to their respective ownership interests. For example, the patriarch of the family takes 100% of the entity’s profits after having given his children 50% of the entity’s shares.

As a result, you are cautioned to do the following:

  • Maintain sufficient assets outside the FLP or LLC for your own purposes.
  • Observe all of the formalities when establishing an FLP or LLC, including the proper titling of assets and the proper distribution of profits to the various owners in accordance with their ownership interests.
  • When you transfer a significant interest in an FLP or LLC, avoid maintaining control of the entity’s profit distributions. Otherwise, you run the risk of having the IRS attack the transaction and call back 100% of the transfers into your taxable estate
Please enter your name.
Please enter your email address.
Please enter your message.

You must attach a copy of the PDF application form linked above. You may add pages to the application, but the name of the file must remain the same.

Please attach Job_Application_Form.pdf
reCAPTCHA is mandatory
Subscribe to our newsletter.
First name is required.
Email is required.
Email does not match.
Publications
reCAPTCHA is mandatory
Welcome to fletcher tilton Online Invoice Payment Center.
Card holders name is required.
Please enter invoice number.
Please enter amount to be paid.
Please enter valid card number.
CCV code is required.
/
Please select expiration date.
Please enter your street address.
Please enter your city.
Please enter your state Code.
Please enter your postal code.
Please enter your contact number.
Please enter your email address.
Welcome to fletcher tilton Online Retainer Funding Center.
Card holders name is required.
Please enter a client number.
Please enter amount to be paid.
Please enter valid card number.
CCV code is required.
/
Please select expiration date.
Please enter your street address.
Please enter your city.
Please enter your state Code.
Please enter your postal code.
Please enter your contact number.
Please enter your email address.
Welcome to fletcher tilton Online Immigration Pre-Payment Center.
Bank account type is required.
Please enter a valid name.
Please enter amount to be paid.
Please enter client number.
Bank routing number is required.
Bank routing did not match.
Bank account number is required.
Bank account number did not match.
Please enter your street address.
Please enter your city.
Please enter your state Code.
Please enter your postal code.
Please enter your contact number.
Please enter your email address.
Welcome to fletcher tilton Online PAY BY CHECK.
Bank account type is required.
Please enter a valid name.
Please enter amount to be paid.
Please enter invoice number.
Bank routing number is required.
Bank routing did not match.
Bank account number is required.
Bank account number did not match.
Please enter your street address.
Please enter your city.
Please enter your state Code.
Please enter your postal code.
Please enter your contact number.
Please enter your email address.