October 02, 2026
The Second Circuit's decision limiting a self-employment tax break for limited partners with significant managerial roles reached a conclusion similar to that of a recent Fifth Circuit ruling, but practitioners said notable differences between them create a split requiring resolution by the IRS, the U.S. Supreme Court or Congress.
September 17, 2026
The Second Circuit held Thursday that $141.5 million in partnership income distributed to an investment company's principals was subject to self-employment taxes, following the Fifth Circuit's narrow interpretation for determining eligibility for a self-employment tax exemption for limited partners.
August 19, 2026
The IRS urged the Second Circuit to adopt the Fifth Circuit's narrow interpretation for determining whether a limited partner qualifies for a self-employment tax exemption, arguing that an investment firm's principals in a similar dispute would not qualify under the new standard.