As part of the Allegheny County Bar Association’s Continuing Legal Education program, Metz Lewis attorney Mike Herzog presented Tax Due Diligence for M&A Transactions.
This program provided an overview of tax due diligence associated with M&A transactions. The following topics were discussed:
- Goals of Tax Due Diligence: Tax due diligence is the process of reviewing and analyzing a target company’s tax matters to identify potential tax exposures, risks, and opportunities that could affect the value, structure, or post-closing obligations of a transaction. The goal is to ensure the buyer (or investor) understands the target’s historical tax compliance, ongoing obligations, and the tax implications of the proposed acquisition.
- Scope of Review: The review typically covers federal, state, local and foreign taxes, as applicable, and includes income taxes, employment and payroll taxes, sales, use and excise taxes, property taxes, transfer pricing and international issues, tax attributes and transactional tax issues.
- Deliverables and Outcomes: The due diligence process results in a comprehensive report summarizing key findings, quantifying potential exposures, and recommending risk mitigation strategies. Findings often influence deal negotiations, representations and warranties, escrow or indemnity provisions, and post-closing tax planning.
Mike continues to advise clients on tax strategy in transactions and share practical insights through speaking engagements and industry programs.
