Founders of companies face unique tax issues and have unique needs. Founders face tax issues on sales, funding rounds, in contract negotiations, with intellectual property, covenants not to compete, indemnities and in many other contexts. Their entity choice, business situs and tax filing positions may have a lasting impact for themselves and their companies.
We provide tax advice to founders during the many stages of their careers, from start-up to expansion to IPO, from venture funding to merger or sale. Founders often have unique tax problems and issues. Today, there is increased governmental scrutiny on founders and executives. In fact, the IRS has begun targeting executives for examination. The initiative is part of a broader IRS focus on high income and highly compensated executives, entrepreneurs and others. Various corporate scandals caused the IRS to target a range of executive compensation issues, including stock options, deferred compensation, golden parachutes and fringe benefits. After an IRS pilot program exposed problems with executives tax returns, the IRS now routinely examines the compensation of executives as part of their audits of large corporations. In fact, in large corporate audits, the IRS now asks its agents to specifically request the tax returns of key executives.
Occasionally, tax issues for founders arise primarily because of their significant shareholdings in ways that technically do not implicate or involve the company. For example, we represented founders or key insiders of a number of companies with respect to certain particular tax issues.