Taxpayers to Weigh Facts While IRS Prepares Limited Partner Rule

Taxpayers will have to look at the facts of their own situation when determining wether they are considered a limited partner and potentially exempt from the self-employment tax, an IRS official said Friday.

The agency is working on formal rules on the limited partner exemption under the Self-Employed Contributions Act, or SECA, especially with the results of recent US Tax Court cases, said Holly Porter, IRS associate chief counsel for pass-throughs and special industries, at a conference hosted by the American Bar Association’s tax section in San Francisco. She didn’t give an indication on timing.

While the IRS works on ...