Pennsylvania Tax Settlement Results in $1.2 million Decrease in Assessment

Client Profile

Industry: Private Equity
Assets Managed: >$9 Billion
Geographic Footprint: New York City
Ownership Structure: Multi-tiered partnership/LLC

CBIZ helped with a New York-based company reduce its Pennsylvania tax obligations.Issue

An investor had more than 100 partnership investment funds, some of which had Pennsylvania-sourced income or loss, but the taxpayer filed a Pennsylvania capital stock/foreign franchise tax return with zero apportionment to the state. The error led to an increase in the investor’s apportionment factor, and a $1.2 million franchise tax assessment that excluded interest or other penalties.


Our national state and local tax group helped the investor mitigate its tax bill by evaluating the correct flow-through apportionment for the investment funds. The multi-tiered partnership structure had insignificant ownership interests, which made determining the apportionment formula complex. Our group worked closely with the investor to remediate the error made and report the correct apportionment factor for the investment funds’ capital stock/foreign franchise tax return. We then negotiated a resolution with the Pennsylvania Department of Revenue that significantly decreased the tax bill.


With our assistance, the taxpayer settled the corporate franchise tax assessment for $2,500, a reduction of more than $1.2 million from the original tax bill. Additionally, the services we provided mitigate the risk of future compliance concerns related to the reporting of capital stock and foreign franchise tax.

Valuable Resolutions for Your State & Local Tax Concerns

Learn how our innovative approach can lead to a successful outcome for your state and local tax controversies.

Download our case study

Copyright © 2016, CBIZ, Inc. All rights reserved. Contents of this publication may not be reproduced without the express written consent of CBIZ. This publication is distributed with the understanding that CBIZ is not rendering legal, accounting or other professional advice. The reader is advised to contact a tax professional prior to taking any action based upon this information. CBIZ assumes no liability whatsoever in connection with the use of this information and assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

CBIZ MHM is the brand name for CBIZ MHM, LLC, a national professional services company providing tax, financial advisory and consulting services to individuals, tax-exempt organizations and a wide range of publicly-traded and privately-held companies. CBIZ MHM, LLC is a fully owned subsidiary of CBIZ, Inc. (NYSE: CBZ).

Pennsylvania Tax Settlement Results in $1.2 million Decrease in AssessmentCBIZ helped an investment fund company reduce its Pennsylvania tax assessment....2016-06-17T16:50:00-05:00CBIZ helped an investment fund company reduce its Pennsylvania tax assessment.Planning & Tax MinimizationState & Local Tax