Tax Court Spotlight: Partner Titles Won’t Save You from Self-Employment Tax – The Soroban Ruling Under TEFRA and BBA

In the spotlight: Soroban Capital Partners LP v. Commissioner - a pivotal Tax Court decision that unpacks the nuanced application of the partnership anti-abuse rule. This case dives into whether a partnership structure can be disregarded when it lacks economic substance and serves primarily to generate tax benefits. Our analysis explores the court’s rationale, and the implications for private equity fund structures and for the partners.