R.D. Clark & Sons – Tax-affecting debate continues

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Abstract: For decades, business valuation experts and the IRS have been at odds regarding the practice of “tax affecting” the earnings of pass-through entities. This article summarizes a recent Connecticut appellate court decision on this issue, which highlights both sides of the debate — and the importance of considering the facts of the specific case. A sidebar discusses an apparent softening of the U.S. Tax Court’s stance on this matter. R.D. Clark & Sons, 194 Conn. App. 690 (2019) Estate of Jones, TC Memo 2019-101, August 19, 2019 Gross v. Commissioner, T.C. Memo. 1999-254, aff’d. 272 F. 3d 333 (6th Cir. 2001), cert. denied, 537 U.S. 827 (2002)