The document outlines key tax issues and considerations for mergers and acquisitions. It discusses forming a due diligence team of tax, legal, accounting and banking professionals. The document then covers topics such as tax returns, representations and warranties, covenants, transaction costs, successor liability, state taxes, problem areas, tax indemnities, post-acquisition tax structuring, compliance and audits, executive compensation, and contact information.

1. Roger Royse
ROYSE LAW FIRM PC
1717 Embarcadero Road
Palo Alto, CA 94303
(650) 813-9700

2. TEAM
• Banker
• Tax Attorney
• Accountant
• Corporate Lawyer

3. DUE DILIGENCE LIST
• Tax Returns (all jurisdictions)
• Financials
• FIN 48 Work Papers
• Sales and Local Tax Filings
• Organizational Documents
• Tax Elections
• Cap Table

4. REPRESENTATIONS AND WARRANTIES
• Knowledge and
Materiality
• Tax Returns Filed
• Taxes Paid
• Reserves for Tax Liability
Adequate
• Schedules
• Tax Assets/382

5. COVENANTS
• Post Closing
Preparation of
Returns
• Transfer Taxes
• Review Rights
• Tax Treatment/
Reporting the
Transaction
• Audit and Litigation
• 280G Approvals/Vote
• Amendment
• Consistency with Prior
Returns
• Straddle Period
• Refunds
• Voluntary Disclosure

6. TRANSACTION COSTS AND CLOSING PAYMENTS
• Allocating Deduction
• Allocating Cost

7. SUCCESSOR LIABILITY
• Asset v. Stock Sale
• Transferee Liability
• Uniform Voidable Transactions Act (UVTA)

8. STATE TAXES
• Tax Clearance
• Transferee Liability

9. PROBLEM AREAS
• 382 Loss Limitations
• Transfer Pricing
• State Nexus
• Tax Reserve
• 409A Issues
• Option/Stock Granting Practices

10. TAX INDEMNITY
• Carve Outs
• Baskets/Caps
• Survival
• Holdback, Escrow
• Offset for Tax Benefit

11. CRITICAL TAX ISSUES
• Post-Acquisition Tax Structuring
• Tax Compliance
• Post-Acquisition Tax Audits
• Executive Compensation and Benefits

12. POST-ACQUISITION TAX STRUCTURING
• Types of Tax Benefits
• Reduction of subpart F income
• Tax-efficient transfer pricing
• Consolidation of U.S. subsidiaries into one tax group
• Creation of efficient tax treaty network

13. TAX COMPLIANCE & POST-ACQUISITION
TAX AUDITS
• Strategy to handle and defend an audit:
• Preemptive discussion of tax issues
• Early communication among relevant stakeholders
• Tax risk management controls
• Tax reporting
• Tax compliance procedures and processes

14. COMPENSATION AND BENEFITS
• Deferred equity payouts and IRC Section 409A income
recognition issues
• Seek counsel and guidance
• Determine valuation methodology in the acquisition
agreement and secure independent valuation expert
• 401(k) Compliance
• Affordable Care Act regulations

15. CONTACT
Roger Royse
ROYSE LAW FIRM PC
1717 Embarcadero Road
Palo Alto, CA 94303
(650) 813-9700
rroyse@rroyselaw.com
www.rroyselaw.com