In Brief

Kramer Levin Naftalis & Frankel LLP's Tax Department provides assistance in numerous areas by applying its experience and creativity to ensure tax favorable results. In an extremely complex area of law, the Department provides easily understood advice and treats all clients with individual attention. We believe that we understand not only the tax issues involved, but also the business considerations of our clients. As more fully described below, we provide tax assistance to our clients on a full range of transactions and matters, including:

• Mergers and acquisitions
• International
• Corporate finance and financial products
• Restructurings
• Partnerships and limited liability companies
• Real estate
• State and local taxation
• Investment funds
• Private foundations and charitable organizations
• Entertainment and Sports
• Tax controversies

Principal Areas of Focus

Mergers and Acquisitions

The heart of our practice is structuring the purchase and sale of businesses with our clients. We advise our clients, whether sellers or acquirors, with respect to both taxable and tax-free transactions and assist them in developing tax-efficient structures for their transactions. Mindful that tax considerations often must be balanced with other objectives and issues, we work with our clients to devise strategies that achieve the desired tax results without forfeiting other important goals. Our advice extends beyond structuring transactions to related issues including acquisition financing, tax-free spin-off transactions, leveraged buyouts, complex joint ventures, post-acquisition federal and state and local planning for both sellers and buyers, and compensation planning.

International

We advise a wide range of foreign clients, both high net worth individuals and companies, on the U.S. income tax aspects of their investments within and without the United States. We assist our domestic clients in structuring their foreign investments and acquisitions, repatriating funds to the U.S. and minimizing taxes on the disposition of their foreign investments. While our New York Office largely focuses on the U.S. tax implications of these transactions, by leveraging our domestic experience and working with the help of our Paris Office, foreign affiliates and alliances, and other local counsel, we are able to devise structures and transactions that substantially reduce the taxes payable by our clients in other countries as well.

We create tax-efficient structures for domestic clients making outbound investments throughout the world, seeking to minimize local taxation during the life of the investment, and local and U.S. taxes on the repatriation of profits and upon exit from the investment. We understand the importance, in structuring domestic and offshore funds, of accommodating the needs of domestic, tax-exempt and foreign investors, and providing them with structures that take into account their unique tax circumstances. We have represented extremely high net worth domestic and foreign investors in their investments in emerging market real estate funds.

Corporate Finance and Financial Products

We advise our clients with respect to the tax ramifications of debt and equity offerings of all types, whether in the context of acquisitions and other major corporate transactions or otherwise. We also work closely with our investment banking clients and our Corporate group regarding tax-advantaged financial products. These include certain securitization vehicles, techniques for utilizing foreign tax credits, leasing transactions, real estate investment trusts, and mutual fund products.

Restructurings

We provide tax advice in many major bankruptcy restructurings. We know that the favorable tax attributes of a financially troubled company can be among its most valuable assets. Working with our Creditors' Rights practice, we have designed several techniques that have preserved those attributes for the benefit of creditors and new investors in the enterprise, substantially enhancing the recovery of the creditors and the financial return of the investors. We also assist in untangling and explaining the often complex tax postures of many debtor corporations, so as to enable our clients to intelligently evaluate the risks and potential rewards involved in investing in the debt or equity of troubled companies.

State and Local

Our active state and local tax practice provides multistate tax planning for entities and individuals and handles tax controversies from the administrative level through the appellate courts. We advise on the state and local aspects of mergers and acquisitions, including structuring transactions to maximize state tax savings and identifying tax liabilities individual to particular states. State tax aspects of partnership and limited liability company agreements are also an important part of the practice. In the controversy area, we assist clients with advice on audit issues, handle audits, when appropriate, and appear informally and formally at the administrative level to seek resolutions of contested matters. When necessary, contested tax matters are litigated before administrative appellate bodies and state courts. Frequently contested issues include: interpretation of regulations, statutory construction, and constitutional limitations on state and local taxation.

Partnerships and Limited Liability Companies

We have vast experience in assisting our clients to make the best use of the flexibility and tax-advantages provided by partnerships, limited liability companies, and other pass-through vehicles. We provide advice with respect to all stages of the life-cycle of these entities, addressing issues with respect to their formation and operation, as well as issues resulting from combinations or other restructurings. We also help clients achieve the most tax-efficient results when they are considering investing in, or transferring their interests in, existing partnerships and other flow-through entities.

Real Estate

We work extensively with members of our Real Estate group. Together, we assist our real estate clients in both the federal and state and local tax aspects of all of their real estate matters, including buying, selling and leasing properties, investing in real estate partnerships, participating in real estate workouts, engaging in like-kind exchanges, dealings with real estate investment trusts, and obtaining and preserving low income housing tax credits.

Investment Funds

We provide advice to registered investment companies (mutual funds) and to private equity funds and venture capital funds, both domestic and foreign. We work with clients to achieve the most beneficial structure for the funds, their investors, and their investment advisors. Our expertise is also called upon to help structure investments of the funds themselves, as well as to provide advice in connection with fund mergers and other reorganizations.

Private Foundations and Charitable Organizations

The Tax Department assists clients in the formation of private foundations and charitable organizations. We provide advice with respect to the operation of such entities, including advice with respect to the excise tax provisions applicable to private foundations. We have represented the interests of charitable organizations in controversies with the Internal Revenue Service. We also help individuals structure and implement programs of charitable giving that provide the most favorable tax treatment.

Entertainment and Sports

We represent many high net worth individuals working in the entertainment and sports fields, including music performers, TV & film actors and producers, athletes, entertainment companies and joint ventures, providing them with tax advice on matters ranging from compensation planning to joint venture arrangements and corporate and partnership M&A structuring. We work very closely with the major entertainment law firms and business management companies to provide them with the full range of legal assistance for their clients.

Tax Controversies

With the support of our Litigation practice, we represent many of our clients in controversies with the Internal Revenue Service and state and local taxing authorities.