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Entity voting has long been recognized

November 30, 2017

I feel compelled to respond to Brian Patterson's letter to the editor that appeared in your newspaper Nov. 24, stating that LLCs do not pay transfer taxes, and are otherwise used to accomplish the evasion of taxes.

The 2005 Delaware Supreme Court decision relating to mergers and transfer tax to which Mr. Patterson refers: https://www.delawarelitigation.com/SuprCtLLC.pdf was legislatively overruled by the General Assembly in January of the following year: http://delcode.delaware.gov/sessionlaws/ga143/chp225.shtml.

Contrary to Mr. Patterson's statements relating to the evasion of federal estate taxes, LLCs are of absolutely no utility in avoiding federal estate taxes. Those interests are required to be reported on the federal estate tax return (Form 706). Any deliberate failure to do so is both fraudulent and criminal in character: https://www.justice.gov/tax/criminal-tax-manual-1000-failure-file-supply-information-or-pay-tax.

The threat of a federal lawsuit over this is laughable. Entity voting has long been recognized elsewhere in this state and elsewhere throughout the country. Mr. Patterson is either wholly uninformed or, worse, is being deliberately inaccurate in an attempt to influence the outcome of this important voting rights issue.

John Bloxom
Rehoboth Beach

 

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