Palisade structures tax liability policies that cover losses (including taxes, penalties, interest, challenge costs, or tax gross-ups) resulting from challenges made by a taxing authority to the insured's tax position or intended tax treatment. These risks typically arise out of a transaction (relating to either historic tax positions or the tax treatment of the transaction itself) or another significant business event.
Can be Used to
Reduce or eliminate the tax risk related to historic tax positions taken by the target of an acquisition or merger pre-transaction, such as debt versus equity treatment, treatment of expenses (capitalized or deducted), and transfer pricing.
Cover risks regarding tax treatment of any transaction itself, such as tax-free reorganizations, tax basis step up, or other pre-closing restructuring issues.
Insure the historic tax treatment of a target entity, such as REIT status, S corporation status or qualification, or MLP status or qualification.
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