Proposed Nationwide Ban On Non-Compete Agreements [January 2023)

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The Foreign Account Tax Compliance Act, enacted in 2010, created new IRC Section 6038D and requires individuals to file a statement with their income tax returns to report interests in specified foreign financial assets if the aggregate value of those assets exceeds certain thresholds.

Temporary regulations implementing IRC 6038D have been issued. Under the regulations, specified individuals (U.S. citizens, residents and certain non-resident aliens) are required to complete and attach Form 8938, Statement of Specified Foreign Financial Assets, to their income tax returns. This is effective for tax years starting after March 18, 2010, which for most people will be their 2011 tax returns filed during the 2012 filing season.

In developing the regulations IRS considered the potential burden this new self-reporting requirement could have on affected taxpayers. To balance reporting burden and the need for compliance improvement, there are higher asset thresholds for married couples and those residing abroad. There are also exceptions that relieve taxpayers from reporting certain assets, and special rules for valuing assets.  

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Limited Liability Companies after Olmstead

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Limited liability companies (LLCs), which have only been around since 1982, gained popularity in Florida after the 1999 repeal of the Florida corporation income tax on an LLC’s income and later repeal of the Florida intangible tax on an LLC’s interests. Limited liability limited partnerships (LLLPs) arose when the legislature amended the LLLP statute to provide for limited liability protection for all partners, including general partners rather than partial limited liability formerly available. A Connecticut court held under the appropriate circumstances it could pierce the corporate veil of an LLC and hold members personally liable to third parties. In Stone v. Frederick Hobby Associates II, LLC, No. CV 000181620S, 2001 WL 861822 at *10 (Conn. Super. Ct. July 10, 2001), the court found, based on the facts, the “instrumentality and identity rules” allowed the court to pierce the veil of an LLC and hold individual members personally liable.

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