Tax-Encumbered Business Article Authored by Longman & Van Grack Attorney Published by BNA Bloomberg

Recently, BNA Bloomberg published its Tax Management Memorandum which included an article titled “Buying and Selling Tax-Encumbered Businesses” authored by Longman & Van Grack attorney Robb Longman. The article discusses how when a party is purchasing a business, it is important for the party to determine whether the business has unsatisfied tax liabilities. The article discusses techniques for identifying and addressing tax liabilities that preexist a sale. Robb Longman also regularly has provided CLE legal presentations on the subject of buying and selling tax-encumbered businesses

As described by Mr. Longman in the BNA Bloomberg article, typically, in either an asset sale or a stock sale (including a sale of LLC membership interests or partnership interests), the agreement to purchase the business contains significant representations concerning the business’s compliance with any and all tax responsibilities. These tax-related representations can include: (1) the legal representation that the business has filed all required tax returns; (2) the legal representation that all filed tax returns are complete and correct; (3) the legal representation that all taxes due for periods covered by any tax return have been paid and/or disclosed; and (4) the legal representation that the business has withheld or collected and paid to the taxing authority all taxes required to be withheld, collected, or paid by it.

Robb Longman and Longman & Van Grack’s business law attorneys regularly represent clients in many different types business transactions and business agreements in Maryland, Virginia, and DC. Our attorneys are also familiar with all of the tax related concerns involved in the buying and selling of all types of businesses, whether tax encumbered or non tax encumbered. Robb Longman, who has been the Chair of the Maryland Bar Association Tax Section and elected to leadership roles in the Tax Section of the American Bar Association, has assisted many clients through the process of buying and selling businesses and entities. If you would like to contact Robb or one of our other business attorneys, you can reach us at (301) 291-5027.