“Common Tax Diligence Issues When Acquiring an S Corporation” by Riveron contributors David Anders and Lauren Pozna has appeared in the December 2021 issue of Thomson Reuters Practical Tax Strategies^[1]. The article explores the acquisitions of S corporations, advising buyers to conduct thorough tax diligence or risk being responsible for tax liabilities.

Despite the various benefits of S corporations, acquiring parties may face possible adverse tax implications. In addition, events such as a sale of a business might be scrutinized by tax authorities, causing an S corporation and its owners to face a first-time audit or detailed questioning. To guide diligence, buyers should be aware of tax issues that commonly arise, and they can proactively address these issues by:

• ensuring the proper status of the S corporation and watching out for possible impacts driven by the deal structure
• examining matters related to compensation, employees, and accounting methods
• looking out for other property-related liabilities, and understanding that insurance does not offset the need for proper diligence

Learn more in the December 2021 issue of Practical Tax Strategies (gated for subscribers).

[1] Practical Tax Strategies, Copyright 2021 Thomson Reuters