Tax

Overview

From the largest multinational companies to closely held businesses, nonprofit organizations, and individuals, Richards Layton provides skilled advice on maximizing the advantages and minimizing the impact of federal, state, and local tax statutes. Our special emphasis is on the tax implications of Delaware law, including matters of Delaware income, franchise, utility, property, gross receipts, and realty transfer taxation, as well as unclaimed property/escheat. Given our familiarity with state tax personnel and policies, we can often quickly secure approval on the tax aspects of time-sensitive transactions.

When taxing authorities raise questions or concerns, we provide representation before the Delaware Division of Revenue, the Delaware Tax Appeal Board, all Delaware courts, the Delaware State Bank Commissioner, and the Internal Revenue Service. Given our firm’s leading role in shaping Delaware tax and trust law, we effectively help clients present their views on changes in the tax statutes, and represent them when they seek formal or informal rulings from the Internal Revenue Service, the Delaware Division of Revenue, and other tax authorities.

From the largest multinational companies to closely held businesses, nonprofit organizations and individuals, Richards Layton provides skilled advice on maximizing the advantages and minimizing the impact of federal, state and local tax statutes. Our special emphasis is on the tax implications of Delaware law, including matters of Delaware income, franchise, utility, property, gross receipts and realty transfer taxation, as well as unclaimed property/escheat. Given our familiarity with state tax personnel and policies, we can often quickly secure approval on the tax aspects of time-sensitive transactions.

When taxing authorities raise questions or concerns, we provide representation before the Delaware Division of Revenue, the Delaware Tax Appeal Board, all Delaware courts, the Delaware State Bank Commissioner and the Internal Revenue Service. Given our firm’s leading role in shaping Delaware tax and trust law, we effectively help clients present their views on changes in the tax statutes, and represent them when they seek formal or informal rulings from the Internal Revenue Service, the Delaware Division of Revenue and other tax authorities.

Authoritative Transactional Opinions
We thoroughly understand the tax implications of commercial transactions carried out under Delaware limited liability company agreements, statutory trust agreements, limited partnership agreements and other agreements governing alternative entities. Our lawyers regularly provide corporate clients and their counsel with authoritative opinions on transactions structured under Delaware law, and what the rights and responsibilities of each party will be.

We advise major financial institutions on their roles as trustee or agent in Delaware statutory or common law trust arrangements, and offer guidance to ensure financial integrity and protect assets in sophisticated trust transactions. Our guidance is based not only on our knowledge of Delaware law, but also on our capabilities as established and experienced counsel in sophisticated financing and business combination transactions.

Business Tax Planning
Choosing the right business entity form to minimize taxes is the foundation of business tax planning. Richards Layton tax lawyers help many clients evaluate whether an S corporation, C corporation, limited liability company, partnership or some other vehicle is the best way to meet growth and financing needs while also maximizing tax advantages, and we can then create the appropriate management and organizational structure.

Handling the tax aspects of financing transactions and merger and acquisition transactions is a major part of our practice. Because most business transactions have potential adverse tax consequences if they are not properly structured, we help business clients, including individuals who own businesses, structure transactions to avoid problems and to maximize business and tax benefits.

Employee Benefits Planning
Private and public 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 IRS and Department of Labor 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 specific employment policies and practices. And we make sure that plans remain in full compliance with laws such as COBRA and ERISA.

Unclaimed Property/Escheat
Richards Layton represents a substantial number of clients before the Delaware Division of Revenue in connection with matters related to unclaimed property/escheat. As a result of the United States Supreme Court decisions in Texas v. New Jersey and Delaware v. New York, Delaware is a significant jurisdiction with respect to unclaimed property. Richards Layton is a recognized leader with respect to representation of corporate clients in unclaimed property audits and dispute resolution.

Tax-Exempt Organizations
Tax-exempt and nonprofit organizations vary greatly in terms of size and focus, and Richards Layton is well qualified to address the tax and governance needs of a full range of these clients. We regularly advise such entities as:

  • Major hospital systems
  • Private foundations
  • Colleges, universities and other educational organizations
  • Museums and other arts and cultural organizations
  • Environmental and other public policy advocacy groups
  • Other public charities.

Our lawyers are highly skilled in all of the complex aspects of tax-exempt compliance, including issues of unrelated business income, private benefit/private inurement and tax-exempt bond financings. We assist clients with the often complicated tax exemption application process and annual information filing requirements for tax-exempt organizations. In addition, our lawyers frequently advise clients on property tax exemptions, employee benefits matters, tax controversies and audits specifically focused on tax-exempt organizations.

Personal Tax Planning
Richards Layton has unsurpassed knowledge of Delaware trust law and frequently helps clients decide whether a Delaware Asset Protection Trust, a Delaware Dynasty Trust or some other trust structure is the best estate and wealth planning option to maximize tax advantages. As Delaware allows trusts to continue in perpetuity, many high-wealth individuals seek our help to establish these trust arrangements in the state.

We pay close attention to the details in drafting estate plans, and work with executors and administrators to make sure all those details are handled properly. That includes diversifying investments to structure the estate for payment of estate taxes, and minimizing the value of a family business for estate tax purposes. We also create a variety of trusts and lifetime gifts to shelter financial assets and minimize tax impact, such as living trusts, charitable trusts, generation-skipping trusts and similar vehicles.

Publications

  • "Federal District Court Holds Delaware's Unclaimed Property Estimation Methods Violate the Constitution," July 6, 2016   View >
  • "New Private Placement, Trust-Owned Life Insurance Premium Tax Bill Signed into Law ," May 20, 2016   View >
  • "Delaware Softens Unclaimed Property Audit Posture," Insights, July 2015   View >
  • "Significant Changes in Delaware Unclaimed Property Administration Proposed," June 18, 2015   View >
  • "Highlights of the 2014 Trust Act," July 23, 2014   View >
  • "Delaware Unclaimed Property Update: Secretary of State Voluntary Program Entrance and Resolution Deadlines Extended," July 14, 2014   View >
  • "New Secretary of State Voluntary Compliance Program," February 20, 2013   View >
  • "Delaware Amends the Secretary of State Unclaimed Property Voluntary Disclosure Program," January 31, 2013   View >
  • "Delaware Finalizes Regulation Temporarily Shortening Unclaimed Property Audit Look-Back Period," November 13, 2012   View >
  • "Unclaimed Property: Basics and New Developments," Delaware Lawyer, Fall 2012   View >
  • "Delaware Laws & Programs Affecting Business - 2011 Edition," July 2011   View >
  • "Delaware Bankruptcy Law Update - The Grossman's and Exide Decisions," June 4, 2010   View >