Tax Due Diligence

Protecting Your Investment: The Power of Tax Due Diligence

Before you commit to a transaction, it’s critical to conduct a deep dive into the target company’s tax history. Our comprehensive buy-side and sell-side tax due diligence goes beyond surface-level reviews. We examine past tax filings and current positions to identify potential liabilities that could erode value, as well as discover tax attributes and opportunities that can be leveraged. This is crucial for a precise valuation and informed negotiation.

Comprehensive Tax Diligence Across Jurisdictions

Our due diligence process covers a wide spectrum of tax areas:

• Federal tax: Our teams review income tax calculations and compliance, accounting methods, depreciation and amortization methods, tax reserves and any current or historical federal tax audits.
• State and local tax: We assess income and franchise tax calculations, sales and use tax compliance and refunds, property taxes, indirect tax reserves and state or local tax audits. Given the varied landscape of state and local tax laws, this review is especially critical.
• International tax: For cross-border transactions, we examine U.S. inclusions of foreign income, cross-border withholding taxes, transfer pricing methodologies and permanent establishment positions to ensure global compliance and mitigate international tax risks.

With a clear understanding of the tax landscape, we design transaction structures that align with your strategic goals and minimize tax burdens. Our transaction structuring ensures you achieve a more tax-efficient outcome. Weaver’s professionals bring deep knowledge in transaction tax services, covering every kind of buy-side and sell-side transaction.

Our approach considers different angles to optimize your post transaction financial position:

• Evaluation of tax-advantaged acquisition and operational structures: We help you choose the right legal and tax framework for the deal, whether it’s an asset purchase, stock purchase or another structure, to achieve your objectives efficiently.
• Assessment of tax implications of financing structures: The way a deal is financed can have significant tax consequences. We analyze these implications to recommend structures that support your financial goals.
• Rationalization of obsolete and/or redundant entities: Post transaction, we can help  streamline your entity structure to reduce ongoing tax and administrative complexities.
• International structuring: Cross-border transaction planning for multinational deals.

Weaver’s strategic foresight maximizes post transaction value, including:

• Earnings and profits and tax basis calculations
• Assessment of quality and availability of tax attributes (e.g., net operating loss (NOL) availability)
• Evaluation of transferability and monetization of tax credits
• Transaction costs
• Basis studies
• Qualified small business stock (QSBS)