Federal law specifically provides that self-employment tax exemptions only apply to limited partners who function as passive investors, not partners who play an active role in operations, the Tax Law Center at NYU Law told the First Circuit.
The center filed an amicus brief in the US Court of Appeals for the First Circuit Wednesday in support of the IRS’s position that Denham Capital Management LLP’s individual partners weren’t “limited partners” under IRC §1402(a)(13) because their income was earned through controlling and conducting the partnership’s business, rather than through means consistent with “passive investors.”
The Self-Employment Contributions Act—enacted as ...