The Cummings & Cummings Law Journal

Understanding Competent Authority and Mutual Agreement Procedure in Transfer Pricing Cross-border transfer pricing disputes often lead to double taxation when two countries make inconsistent adjustments to the same intercompany transaction. Competent authority procedures, typically pursued through the Mutual Agreement Procedure, provide a treaty-based framework for eliminating that double taxation. Under these procedures, each country’s designated

Structure the Right Entity and Adopt Robust Governance Selecting an entity is not merely a filing decision; it is a foundational risk allocation exercise. The nuances between a limited liability company, S corporation, C corporation, and limited partnership go well beyond tax rates and annual fees. Creditor access to owners, veil-piercing exposure, fiduciary duties, capital

What Practitioners Mean by the Federal Common Law “Nexus” in Trademark Cases In trademark litigation, “nexus” refers to the legally cognizable connection between a defendant’s conduct and the forum that permits a federal court to exercise authority. Although the Lanham Act supplies the federal cause of action, it does not itself answer the crucial question

Understanding Cross-Purchase Agreements With Multiple Owners A cross-purchase buy-sell agreement is a contract under which the owners agree that, upon certain triggering events, the remaining owners will purchase the departing owner’s equity directly. While this may appear straightforward in a two-owner scenario, the complexity multiplies quickly as the number of owners increases. The number of

Defining the Double-Dummy Merger Structure The double-dummy merger is a corporate reorganization technique in which two operating companies combine under a newly formed holding company through two parallel, statutory mergers into separate merger subsidiaries. In its simplest form, a new parent (“HoldCo”) forms two wholly owned subsidiaries (“Merger Sub A” and “Merger Sub B”). Each

What Cost Segregation Is and Why It Matters Cost segregation is an engineering-driven tax analysis that dissects a building into its component parts to identify assets eligible for shorter recovery periods than the standard 27.5-year or 39-year depreciation applicable to residential rental and nonresidential real property, respectively. Rather than treating an entire structure as a

Defining a Blue Sky Memorandum in the Context of Private Placements A Blue Sky Memorandum is a legal analysis that maps a private securities offering to the mosaic of state securities laws commonly referred to as Blue Sky laws. In a private placement, the offering may be exempt from federal registration under Regulation D or

What Is Form 5471 and Why It Matters More Than Most Owners Realize Form 5471 is an expansive information return required of certain U.S. persons who are officers, directors, or shareholders of specified foreign corporations, including controlled foreign corporations (CFCs). The filing obligation is triggered by detailed ownership tests and events, such as acquiring or

Why Tax-Efficient Funding of a Buy-Sell Agreement Is Mission-Critical Business owners often appreciate the conceptual value of a buy-sell agreement, but underestimate the tax and cash flow consequences of how the agreement is funded. A buy-sell agreement that is not matched to a capital source will either fail at the moment of truth or will

Federal Versus State Oversight: Who Regulates What At the most basic level, municipal bonds sit at the intersection of federal securities regulation and state public finance law. The federal framework, anchored by the Securities Exchange Act of 1934 and administered by the Securities and Exchange Commission (SEC), focuses on market integrity, disclosure, trading practices, and

What a Hybrid Mediation–Arbitration Clause Actually Does—and Why Precision Matters A hybrid dispute resolution clause that combines mediation and arbitration (often called “med-arb”) is designed to deliver a binding result efficiently while preserving an opportunity for negotiated resolution. Properly drafted, it can reduce cost and uncertainty by funneling parties through a structured path: consensual talks

Grasp the Global Patchwork of Data Protection Laws Before You Act The first step in international data protection compliance is acknowledging that there is no singular, harmonized standard that governs every jurisdiction. While the European Union’s General Data Protection Regulation (GDPR) is often treated as the benchmark, businesses that touch the United Kingdom, Brazil, Canada,

Understanding the ABC Test at a Glance The ABC test for worker classification is a statutory standard adopted in several states to determine whether a worker is an employee or an independent contractor. It is widely regarded as more rigorous than common law or multi-factor tests because it requires the hiring entity to establish all

Understanding the Purpose and Stakes of a Capital Call Default Provision A capital call default provision is the provision that governs what happens when an investor fails to fund a required capital contribution. In a private fund, this single clause interacts with the partnership agreement, subscription documents, side letters, financing arrangements, and tax allocations. Despite

Understand What Deferment of Business Income Really Means Deferring business income is not about avoiding tax; it is about shifting recognition of taxable income into a later tax year under rules that the Internal Revenue Code and Treasury Regulations expressly allow. The core objective is simple: align the timing of income recognition with your cash

Understanding Business Bad Debts Under Section 166 Business bad debts are amounts owed to a business that become wholly or partially uncollectible in the course of the taxpayer’s trade or business. Under Internal Revenue Code Section 166, a business may claim an ordinary deduction for these debts when they become worthless, provided that the debt

Understanding the Distinction: Principal Office, Registered Office, and Mailing Address Many organizations conflate “corporate address” with “registered office,” yet these are distinct legal concepts with different compliance obligations. The principal office generally denotes the location where executive management directs, controls, and coordinates the company’s activities. By contrast, the registered office is a legally designated address

Understand What Qualifies as a Deductible Business Meal Under federal tax law, a business may deduct a portion of certain meal costs when the expenditure is ordinary and necessary under Section 162, directly connected to the active conduct of trade or business, and properly substantiated. In practical terms, a deductible business meal generally involves a

Understanding U.S. Transfer Tax Exposure for Nonresident Aliens Nonresident aliens who invest in United States real estate are often surprised to learn that the United States imposes an estate tax on certain United States situs assets that they own at death. Unlike income tax rules, which hinge on whether income is effectively connected with a

What an IRS Private Letter Ruling Is and Why Tax Certainty Matters An Internal Revenue Service private letter ruling is a written statement by the Office of Chief Counsel that applies the tax laws to a specific set of facts presented by a taxpayer. It is prospective in orientation and provides binding assurance to the