The document outlines key tax issues and considerations for mergers and acquisitions. It discusses forming a due diligence team of tax, legal, accounting and banking professionals. The document then covers topics such as tax returns, representations and warranties, covenants, transaction costs, successor liability, state taxes, problem areas, tax indemnities, post-acquisition tax structuring, compliance and audits, executive compensation, and contact information.
3. DUE DILIGENCE LIST
• Tax Returns (all jurisdictions)
• Financials
• FIN 48 Work Papers
• Sales and Local Tax Filings
• Organizational Documents
• Tax Elections
• Cap Table
4. REPRESENTATIONS AND WARRANTIES
• Knowledge and
Materiality
• Tax Returns Filed
• Taxes Paid
• Reserves for Tax Liability
Adequate
• Schedules
• Tax Assets/382
5. COVENANTS
• Post Closing
Preparation of
Returns
• Transfer Taxes
• Review Rights
• Tax Treatment/
Reporting the
Transaction
• Audit and Litigation
• 280G Approvals/Vote
• Amendment
• Consistency with Prior
Returns
• Straddle Period
• Refunds
• Voluntary Disclosure
12. POST-ACQUISITION TAX STRUCTURING
• Types of Tax Benefits
• Reduction of subpart F income
• Tax-efficient transfer pricing
• Consolidation of U.S. subsidiaries into one tax group
• Creation of efficient tax treaty network
13. TAX COMPLIANCE & POST-ACQUISITION
TAX AUDITS
• Strategy to handle and defend an audit:
• Preemptive discussion of tax issues
• Early communication among relevant stakeholders
• Tax risk management controls
• Tax reporting
• Tax compliance procedures and processes
14. COMPENSATION AND BENEFITS
• Deferred equity payouts and IRC Section 409A income
recognition issues
• Seek counsel and guidance
• Determine valuation methodology in the acquisition
agreement and secure independent valuation expert
• 401(k) Compliance
• Affordable Care Act regulations
15. CONTACT
Roger Royse
ROYSE LAW FIRM PC
1717 Embarcadero Road
Palo Alto, CA 94303
(650) 813-9700
rroyse@rroyselaw.com
www.rroyselaw.com