IRS Provides Helpful Guidance On Management Contracts
Law360, New York ( July 14, 2016, 12:05 PM EDT) -- On May 27, 2016, the national office of the Internal Revenue Service released private letter ruling 201622003. PLR 201622003 continues the trend of favorable PLRs issued by the IRS on the question of whether, under a facts-and-circumstances analysis, a management contract that fails to satisfy a Rev. Proc. 97-13 safe harbor from private business use gives rise to private business use of a tax-exempt bond issue. PLR 201622003 also provides helpful guidance in interpreting the scope of the safe harbor from private business use set forth in Rev. Proc. 97-13 §5.03(7) in the case of a management contract that provides for incentive compensation based on the attainment of a threshold for an increase in gross revenue of the managed facility or a decrease in the expenses of operating the managed facility (but not both an increase in revenue and decrease in expenses).[1]...
Law360 is on it, so you are, too.
A Law360 subscription puts you at the center of fast-moving legal issues, trends and developments so you can act with speed and confidence. Over 200 articles are published daily across more than 60 topics, industries, practice areas and jurisdictions.