We advise national and international corporations, partnerships, limited liability companies, other business entities, and high net-worth individuals and families with respect to all areas of tax law. Our tax clients include Fortune 500 and FTSE 500 companies, companies listed on the Alternative Investment Market, and OFEX, companies preparing for initial public offerings, large private companies, international joint ventures, property companies, mutual funds, banks, exempt organizations, charities, high-tech start-ups and individuals.

We monitor legislative developments and advise clients with respect to the potential impact of pending legislation on their businesses and personal finances. Additionally, our attorneys are active leaders in the tax sections of the bar associations of several states.

We work closely with lawyers in virtually every other practice group within the firm, particularly with the Mergers and Acquisitions, Private Clients, Real Estate, Hedge Funds/Private Funds, Private Equity/Venture Capital, Depository Institutions,  Energy & Utilities, and Technologypractice groups. Our multidisciplinary approach to tax practice helps our clients achieve their objectives and structure their activities in a manner that will maximize their overall tax benefits in the most efficient and cost-effective way possible.  We aim to add value to our clients' business by means of our tax advice, whenever possible.

Transactional Practice
The firm’s tax lawyers advise U.S, UK and internationally based clients on a variety of tax and business matters, including planning, negotiation and implementation of mergers, acquisitions and dispositions, spin-offs, public and private offerings, leveraged buyouts, joint ventures, reconstructions and demergers in the UK, recapitalizations and restructurings, and choice of entity.  We have extensive experience in obtaining private letter rulings from the IRS National Office, rulings from U.S. state tax authorities when appropriate, and rulings and advance clearances from the HM Revenue & Customs in the UK.

We have provided tax advice in many different contexts, including:

• Structuring tax-free reorganizations, taxable asset and stock purchases and tax planning under the consolidated return rules for clients operating in a variety of industries.  In the past three years, we have worked on complex transactions aggregating over $30 billion in volume. Additionally, we have substantial experience handling tax issues in the acquisition and sale of companies and licensing of intellectual property in the high technology sector.
  
  
• Handling initial public offerings in the U.S. and the UK, including on the London Stock Exchange; the Alternative Investment Market where we are one of the preeminent U.K. counsel; and other exchanges. Representing clients with respect to leveraged buyouts and transactions involving the creative use of ESOPs.
  
  
• Structuring spin-offs for Fortune 500 companies and obtaining private letter rulings from the IRS National Office regarding tax-free treatment of such spin-offs. 
  
  
• Restructuring taxable and tax-exempt debt of a steel company in connection with pre-bankruptcy reorganization to eliminate principal, and restructure payment and credit terms.
  
  
• Negotiating tax warranties and tax indemnities, tax sharing and allocation agreements, and other tax-related terms of mergers, acquisitions, spin-offs and restructurings.
  
  
• Planning and implementation of tax and corporate aspects of establishing new business operations, including choice of entity issues.
  
  
• Property acquisitions and disposals, property investment vehicles, property funds structures and international property holding structures.
  
  
• Structuring of S corporations, including operating aspects, conversions from C status, Qualified Subchapter S subsidiaries, stockholders agreements and distribution aspects.
  
  
• VAT mitigation.
  
  
• Structuring of domestic and foreign partnerships, joint ventures and “check-the-box” entities.
  
  
• Counseling clients with respect to public offerings of debt and equity securities and going-private transactions.
  
  
• Employee share and cash incentives, including HM Revenue & Customs approved and unapproved share plans.
  
  
• Advising clients on executive compensation and boardroom pay, including corporate governance issues.
  
  
• Advising clients on complex tax planning transactions, including the use of liquidations, stock redemptions, stock options and convertible notes.
  
  
• Advising clients on tax accounting matters, including capitalization and amortization of intangibles, changes in methods of accounting, and “mark-to-market” rules.
  
  
• Advising clients on the establishment and operations of Qualified Settlement Funds to resolve environmental liabilities and asbestos product liabilities, including for some of the largest mass asbestos tort settlements in history, in conjunction with insurance coverage and asbestos-related bankruptcy counseling by the firm's Insurance Coverage and Bankruptcy, Insolvency, Business Reorganization and Restructuring practice groups.
  
  
• In conjunction with lawyers in the firm's Real Estate practice group, advising clients on federal and state tax aspects of IRC Section 1031 like-kind exchanges, including “built-to-suit” exchanges, development joint ventures, involuntary conversions and capital gains issues arising out of investments in real estate.
  
  
• In conjunction with the firm's Energy & Utilities team, K&L Gates tax lawyers advise clients on creative strategies to finance alternative energy projects through the use of federal, state and local credits and other tax incentives.  We have expertise in the issues raised by solar power facilities, wind energy facilities, coal and coke facilities, and ethanol facilities.  We are also uniquely positioned, with our Tax Policy group, to give our clients an ability to influence the critical legistlative and policy debate regarding the scope and application of current and future tax incentives for alternative energy.

Technology and Electronic Commerce
We have been involved in counseling leading technology companies for many years. Our tax practitioners regularly advise companies with respect to the unique federal, state and international tax issues arising from transactions engaged in by companies in the high technology sector. We were involved in structuring some of the initial ISP and content arrangements offered on the World Wide Web, and we continue to advise clients with respect to the tax implications associated with electronic commerce, both in business-to-business and business-to-consumer contexts. Our tax practitioners help to structure the joint provision of online products and services, payment arrangements associated with online offerings, tax issues associated with licensing and digital rights transfers, nexus and reporting issues relating to electronic commerce and a host of related issues.

Private Equity and Venture Capital
We do very sophisticated and innovative tax work in conjunction with our private equity and venture capital practice.   For example, we recently worked on a $3.4 billion leverage buyout – the largest deal in the country of this type in the educational market.

Alternative Energy/Tax-Enhanced Investing
K&L Gates tax lawyers work closely with all types of clients involved in alternative energy transactions and other tax-enhanced investments.  We have substantial experience with the development, structuring and financing of solar energy and other alternative energy projects and transactions.  Our team assists clients by creating and negotiating innovative agreements to maximize congressionally sanctioned tax benefits and to qualify for federal, state, local credits as well as other tax credits and incentives.  Our clients include developers, investors and energy funds.  Together with the firm's Energy & Utilities, transactional, finance and tax policy lawyers, we are able to handle all aspects of any alternative energy of other tax-enhanced project.  We have assisted clients on dozens of alternative energy transactions and the related tax issues from structuring, financing, and permitting to project development, supply and distribution agreements.

International Tax Practice
The firm’s lawyers have worked on various international tax-planning strategies and transactions. We have counseled our clients on international tax consequences of cross-border acquisitions and dispositions of businesses, dual consolidated losses, the maximum utilization of foreign tax credit, Subpart F taxation, transfer pricing, VAT, the PFIC rules, sourcing of income and the FIRPTA rules. We also have advised clients on the appropriate tax treatment of payments received under international consulting, manufacturing, leasing and licensing arrangements and on the use of the U.S. income tax treaty network with other countries. Tax lawyers in our London office have particular knowledge of UK and EU taxes, including corporation tax, income tax, capital gains tax, inheritance tax, stamp duty land tax, stamp duty, value added tax and social security taxes.   Partners in our London office who practice in the corporate tax area are members of the Chartered Institute of Taxation in the UK.  We have advised clients in connection with the expansion of their businesses into China, Canada, the European Union, Japan, Hong Kong, Switzerland, Turkey, India, Indonesia, the Russian Federation and CIS countries. Examples of our recent experience include the following: 

• Representing a US real estate development company in connection with $1B fund to develop commercial real estate in India.
  
  
• Representing personal service partnerships ($500M revenue) in connection with international expansion efforts in Europe and Asia and structured arrangements to maximize treaty benefits and reduce overall worldwide effective tax rate for all partners.
  
  
• Structuring $250M acquisition of publicly traded industrial manufacturer by foreign acquirer.
  
  
• Structuring offshore oil and gas extraction and production joint ventures.
  
  
• Providing advice to several investment companies and banks regarding the tax consequences of investing in emerging markets.
  
  
• Counseling clients on transfer pricing issues and issues involved in satisfying “contemporaneous documentation” requirements, including negotiating, preparing and obtaining Advance Pricing Agreements and the utilization of Competent Authority procedures to resolve transfer pricing issues.
  
  
• Obtaining U.S. certifications and other documentation for U.S. and non-U.S. based clients in order to utilize the reduced withholding rates under income tax treaties.

Financial Institutions and Products Practice
The firm has a substantial practice, centered in the Washington, New York and the Boston offices, as well as a practice in our London office, in securities law, mutual funds, hedge funds and other private investment funds, mortgage banking and consumer finance.  We are well versed in the formation and operation of hedge funds and venture capital, leveraged buyout and other private investment funds, and are thoroughly familiar with tax issues relating to regulated investment companies (RICs), partnerships, common and collective trust funds, and group trusts.  We provide tax advice in connection with all aspects of our mutual fund practice, including the creation of new funds, acquisitions of funds, and restructuring of existing funds.  Our work with domestic and offshore private investment funds involves tax advice concerning the structure of investment entities, their investment activities, acquisitions and exit strategies.  In the UK, we have significant experience in advising on the establishment of property funds, both for retail investment and in a joint venture context.  Recent examples of our experience include:

• Structuring, negotiating and documenting tax-free and taxable reorganizations between open-end investment companies and between closed-end and open-end investment companies and their series.
  
  
• Advising RICs, including exchange traded funds, on compliance with the RIC income and diversification requirements, including the consequences of commodity-linked investments, and obtaining a private letter ruling from the IRS National Office that gains derived from options and futures contracts on gold constitute qualifying income for a RIC where the RIC entered into these contracts to hedge investments in the securities of gold mining companies.
  
  
• Structuring asset securitization transactions (including credit card receivables, real estate tax liens and residential home mortgages) with particular emphasis on choice of appropriate vehicles and the use of special purpose entities (e.g., REMICs).
  
  
• Establishing private investment companies underexempt from registration under the Investment Company Act of 1940 pursuant to sections 3(c)(1) and 3(c)(7) of the Investment Company Act of 1940.
  
  
• Advising insurance-dedicated funds on the diversification requirements under section 817(h) of the Code.
  
  
• Preparing policies and procedures for partnership allocations and distributions.
  
  
• Restructuring fund of funds structures and master feeder structures, restructuring partnership and corporate entities into “master-feeder” structures, and unwinding such a structure.
  
  
• Establishing fund of funds structures and master feeder structures.
  
  
• Establishing offshore entities for investing in the United States, and advising offshore funds on the types of activities that will give rise to income that is effectively connected with a United States trade or business.
  
  
• Establishing management entities for mutual funds, hedge funds, and other private investment funds, and structuring and negotiating the issuance and transfer of interests in such entities.
  
  
• Advising qualified tuition programs (529 plans) on operational requirements and state tax consequences.
  
  
• Obtaining IRS approval of a non-bank trustee/custodian for individual retirement accounts.
  
  
• Structuring investments by tax-exempt entities to minimize unrelated business taxable income, and obtaining a private letter ruling from the IRS National Office that investment advisory and related fees received by a tax-exempt organization do not constitute unrelated business taxable income.

Local Tax Practice
The firm’s lawyers have worked with our clients to solve various state and local income, franchise, transfer, intangibles, sales and use, and property tax matters.  We have extensive experience with respect to planning transactions intended to minimize our clients’ state and local tax burdens, such as, for example, the use of out-of-state holding companies.

An increasing number of our clients seek our advice on multi-state apportionment of income issues as state income tax burdens become more significant and state income tax authorities become more sophisticated. We have advised clients with respect to state income tax audits in Alaska, Pennsylvania, California, Massachusetts, New York, New Jersey, Oregon, Virginia, Maryland, the District of Columbia, and Washington. We also represent our clients in audits, appeals, collections and tax litigation, including class action representation.

In our Pittsburgh and Harrisburg Offices we have particular experience with Pennsylvania state and local taxes.  We represent clients with respect to counseling regarding the state and local tax aspects of transactions; audits; appeals of settlements, determinations and assessments; tax litigation; and advocacy relating to the tax legislation, regulations and policies.  Our experience includes matters relating to Pennsylvania's corporate net income tax; capital stock and franchise tax; personal income tax; sales and use tax; the taxation of public utilities, financial institutions and insurance companies; motor fuels taxes; real property assessments and taxes; local mercantile, business privilege and gross receipts taxes; local earned income and payroll taxes; state and local taxes and fees directed towards particular industries; economic development incentives, including tax credits, Keystone Opportunity Zones and property tax abatement; exemptions from taxes for public charities, including health care facilities; and the administration of unclaimed property.  Our attorneys include former state officials who work on a regular basis with many representatives of the Pennsylvania Department of Revenue, the Office of Attorney General, the Board of Finance and Revenue, and with many local taxing agencies.

Tax lawyers in our Boston office have similar experience with respect to Massachusetts taxes, including individual and corporate and other business income taxes, the sales tax, and local property taxes.  The firm’s lawyers are the authors of the leading treatise on Massachusetts taxation.  We are well qualified to advise clients in this area, particularly with respect to those situations in which the Massachusetts tax treatment may differ from the federal or have no federal counterpart.

Public Finance
Together with our public finance practice, we offer comprehensive tax services on all types of public financing transactions, including tax-exempt bonds issued by state and local government units and public agencies. We advise municipal issuers, underwriters, borrowers and credit-enhancers on all aspects of federal tax laws affecting tax-exempt bonds, including structuring of governmental bonds and private activity, complying with arbitrage and rebate regulations, and responding to IRS examinations and audits. Our tax attorneys and municipal finance lawyers comprise a team of nationally-recognized bond and tax counsel, extending finance and "Section 103" experience to cities, school districts, ports, public utilities, housing agencies, state agencies and public finance markets regionally and nationally.

Tax Controversies and Litigation
Our tax lawyers have represented clients in resolving controversies regarding many different aspects of federal, state and local taxation.   Although many federal tax matters are resolved during audit or, more often, at the Appeals Division level, litigating tax controversies before the federal courts has been a long-standing part of our practice.  We represented the Department of Justice investigating and then reporting on a massive intangible holding company arrangement created by WorldCom involving over US $18B in accrued royalties. We have represented clients in connection with the allocation of purchase price to intangible assets and allowable amortization deductions with respect to such assets, worthless stock deductions, inventory issues, changes in accounting methods, capitalization of executive salaries, the deductibility of expenses incurred in expanding a business, the appropriate carryback of net operating losses, the classification of workers for federal employment tax purposes, excessive compensation, and the computation of earnings and profits reductions for contributions to foreign pension plans. 

In the international area, we have represented clients before the taxing authorities of foreign jurisdictions, such as the United Kingdom Office of Oil Taxation.  Of course, more routine matters are being handled and settled all the time.

We have extensive experience in representing clients in connection with real estate tax assessment appeals in Pennsylvania.   We have handled appeals involving office buildings, department stores, shopping centers, manufacturing facilities (e.g., primary and specialty metals, pharmaceuticals and electronics), entertainment facilities, a railroad, electric power plants, gas distribution facilities and landfills. The firm has also handled numerous appeals for hospitals, nursing homes, cemeteries, cultural facilities and extended care communities regarding denials of real estate tax exemptions, including the landmark matter of St. Margaret’s Seneca Place before the Pennsylvania Supreme Court.   

In the UK, we advise on disputes with HM Revenue & Customs both in the fields of direct and indirect tax.

Related Areas
In addition to the tax matters discussed above, the firm’s lawyers have experience in related areas such as:

ESOP
We have extensive experience in the use of ESOPs to generate tax-deferred gains for selling shareholders. The firm has been involved in over 100 transactions involving ESOPs, some of which are in the range of several billions of dollars.

Executive Compensation
The firm’s lawyers in the Executive Compensation group assist our clients in the preparation of various equity compensation plans, cash and stock bonus plans and non-qualified deferred compensation plans. The group's lawyers also represent companies and executives in negotiating and documenting compensation packages for executives.

ERISA
Our lawyers in the Employee Benefit Plans/ERISA group have significant experience in assisting clients in the development and administration of employee benefit plans, including all types of tax-qualified retirement plans. We have substantial experience in various ERISA matters and the litigation of claims under ERISA.

Non-Profit (Tax-Exempt) Organizations
We regularly advise tax-exempt organizations regarding the particular federal and state tax requirements associated with attaining and maintaining their tax-exempt status. We also regularly counsel private foundation clients on virtually every aspect of their organizational and operational activity. Click here  to learn more about our Tax-Exempt Organizations/Nonprofit Institutions practice group. 

Affordable Housing
Our London office is currently working with colleagues in other departments to build up a practice in the affordable housing sector, acting for banks and for housing associations.

Property Taxes
Our lawyers in the London office have significant experience advising in all areas of property law and property joint ventures with particular experience in stamp duty land tax and VAT and capital allowances, as well as in structuring property acquisitions and disposals using various property-holding vehicles, both UK and non-UK  We also advise on the establishment of property fund vehicles.

Share Plans
Our London Share Plans Group has extensive experience advising companies on structuring their incentives for executives and employees generally.  We design and implement HM Revenue & Customs-approved arrangements as well as unapproved plans, including long-term incentive plans, long-term and short-term bonus plans and restricted share plans.  We advise companies at all stages of their life cycle from start-ups through various funding rounds to pre-IPO companies.  We also advise AIM companies and fully listed companies.

Trusts and Estates
Our Private Client practice includes complex estate planning, generation-skipping transfers, trust and estate administration, charitable gift planning, personal income and transfer tax planning, including estate planning matters related to transfers of closely held businesses.