State & Local Tax Controversy Case Study www.cbiz.com/saltcontroversy 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. Solution 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 clo

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