SmartBrief
Confirm favorite deletion?
Business Planning Keyed to Gevurtz
PNRC Limited Partnership v. Commissioner of Internal Revenue
Citation:
66 T.C.M. (CCH) 265 (1993)Facts
Clark Raymond & Co., PLLC (CRC) was an accounting firm with three partners in 2013: Clark PLLC, Newman PLLC, and Town PS. The partnership operated under a 2013 LLC Agreement that included provisions for capital account maintenance, income allocations, distributions, and a qualified income offset (QIO). In May 2013, Newman PLLC and Town PS withdrew from CRC and formed their own firm, NT PLLC. Certain clients ceased engaging CRC and began using NT PLLC’s services. CRC reported these clients as property distributions to the withdrawing partners valued at $742,569 ($318,144 to Newman PLLC and $424,425 to Town PS). CRC decreased the withdrawing partners’ capital accounts by these amounts, creating negative balances. To restore these negative balances to zero, CRC allocated all of its $563,118 ordinary income for 2013 to Newman PLLC and Town PS pursuant to the QIO provision, leaving no taxable income allocated to Clark PLLC. The IRS challenged these allocations in an FPAA, determining that the client distributions should be disregarded and that the income allocations lacked substantial economic effect.
Only StudyBuddy Pro offers the complete Case Brief Anatomy*
Access the most important case brief elements for optimal case understanding.
*Case Brief Anatomy includes: Brief Prologue, Complete Case Brief, Brief Epilogue
- The Brief Prologue provides necessary case brief introductory information and includes:
Topic:
Identifies the topic of law and where this case fits within your course outline.Parties:
Identifies the cast of characters involved in the case.Procedural Posture & History:
Shares the case history with how lower courts have ruled on the matter.Case Key Terms, Acts, Doctrines, etc.:
A case specific Legal Term Dictionary.Case Doctrines, Acts, Statutes, Amendments and Treatises:
Identifies and Defines Legal Authority used in this case.
- The Case Brief is the complete case summarized and authored in the traditional Law School I.R.A.C. format. The Pro case brief includes:
Brief Facts:
A Synopsis of the Facts of the case.Rule of Law:
Identifies the Legal Principle the Court used in deciding the case.Facts:
What are the factual circumstances that gave rise to the civil or criminal case? What is the relationship of the Parties that are involved in the case.Issue(s):
Lists the Questions of Law that are raised by the Facts of the case.Holding:
Shares the Court's answer to the legal questions raised in the issue.Concurring / Dissenting Opinions:
Includes valuable concurring or dissenting opinions and their key points.Reasoning and Analysis:
Identifies the chain of argument(s) which led the judges to rule as they did.
- The Brief Prologue closes the case brief with important forward-looking discussion and includes:
Policy:
Identifies the Policy if any that has been established by the case.Court Direction:
Shares where the Court went from here for this case.