BarbriSFCourseDetails
  • videocam Live Online with Live Q&A
  • calendar_month December 17, 2025 @ 1:00 p.m. ET./10:00 a.m. PT
  • signal_cellular_alt Intermediate
  • card_travel Tax Law
  • schedule 90 minutes

Minimizing IRS Scrutiny of Private Equity Management Fee Waivers: Structuring Defensible Waiver Agreements

Reviewing Existing Arrangements to Avoid Recharacterization of Profits Interests

$347.00

This course is $0 with these passes:

CLE
CPE
ALL
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Description

The IRS continues to address potential abuses of fees in private equity by conducting a series of audits focusing on fee waiver arrangements. Attorneys and advisers must recognize what pitfalls to avoid when advising and crafting fee waiver arrangements to minimize potential adverse tax liability.

The IRS applies a facts-and-circumstances test to determine whether a fee waiver arrangement should be treated as payment for services. The critical factor is whether the waiver lacks significant risk, and the regulations list a number of factors relevant to whether a fee waiver arrangement should be recharacterized as ordinary income.

Tax counsel to private equity funds should consider whether existing fee waiver arrangements are likely to be challenged on audit, which may lead to reclassification of profits interest as ordinary income.

Listen as our experienced panel provides practical guidance on the IRS' position on management fee waivers, including best practices for structuring waivers that maximize the chance of withstanding IRS scrutiny.

Presented By

Matthew L. Dimon
Associate
Fenwick & West LLP

Mr. Dimon concentrates his practice on a wide variety of domestic and international tax matters, including both tax planning and tax controversy. He has worked with clients from equally varied backgrounds, including cutting-edge startups and large Fortune 100 companies.

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Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

  • BARBRI is a NASBA CPE sponsor and this 90-minute webinar is accredited for 1.5 CPE credits.


  • Live Online


    On Demand

Date + Time

  • event

    Wednesday, December 17, 2025

  • schedule

    1:00 p.m. ET./10:00 a.m. PT

I. Common management fee waiver structures

II. Overview of key regulations

III. Audit activity focused on fee waiver arrangements

IV. Potential effects of reclassification

V. Strategies for revising fee waiver arrangements

The panel will review these and other key issues:

  • How are management fee waivers typically structured, and what are the tax risks inherent in these structures?
  • What conditions on the general partner's receipt of the special allocation could make the arrangement more defensible, and how does the timing of the election impact the risks?
  • What are the key factors for analyzing whether a fee waiver arrangement will withstand IRS scrutiny?

Learning Objectives

After completing this course, you will be able to:

  • Identify terms in management fee waiver arrangements that may not meet IRS entrepreneurial risk requirements
  • Understand the implications of recharacterization of a fee waiver arrangement
  • Discern structures that are more likely to withstand IRS scrutiny


  • Field of Study: Taxes
  • Level of Knowledge: Intermediate
  • Advance Preparation: None
  • Teaching Method: Seminar/Lecture
  • Delivery Method: Group-Internet (via computer)
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
  • Prerequisite:

    Three years+ business or public firm experience at mid-level within the organization, preparing complex partnership agreements and income tax forms and schedules for partnerships and pass-throughs; supervisory authority over other attorneys or accountants. Knowledge and understanding of private equity fund partnership structures, carried interest compensation, and profits interest. Familiarity with management fee waiver structures, economic risk rules and audit processes.

BARBRI is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

BARBRI CE webinars-powered by Strafford-are backed by our 100% unconditional money-back guarantee: If you are not satisfied with any of our products, simply let us know and get a full refund. Contact us at 1-800-926-7926 .