Fifth Circuit Strikes Back on SECA Limited Partner Exception

A recent Fifth Circuit decision, Sirius Solutions LLLP v. Commissioner, brought welcome news for the investment funds industry. In Sirius, the Fifth Circuit held that the Self-Employment Contributions Act (“SECA”) “limited partner exception” does not require a partner to be a “passive investor,” as the IRS and the Tax Court had previously indicated. Instead, a taxpayer qualifies for the limited partner exception if it is “a limited partner in a state-law limited partnership that is afforded... By: Cadwalader, Wickersham & Taft LLP