Denham Capital Management Rebuffs Tax Court View of Partner Test

The US Tax Court “distorted” a tax exception in order to claim self-employment taxes from Denham Capital Management LP’s limited partners, the firm said.

The firm, which advises private equity funds that invest in the energy sector, told the US Court of Appeals for the First Circuit that the lower court erred in determining its partners were not exempt from Medicare and Social Security contributions, disputing its reading of the Self-Employment Contributions Act.

It pushed back on the “functional analysis inquiry” the court created, saying that the concept does not line up with its precedent, and also that it ...