The Office of Chief Counsel of the Internal Revenue Service (IRS) recently released a Memorandum that considers whether members of a limited liability company that serves as an investment manager to several investment funds are entitled to rely on the exemption from self-employment taxes afforded to “limited partners” under §1402(a)(13) of the Internal Revenue Code.  The IRS’ position is important because the federal Medicare tax applies to all self-employment earnings; there is no income limit, as there is for social security tax.  See also “Tax Efficient Hedge Fund Structuring in Anticipation of the New 3.8% Surtax on Net Investment Income and Proposals to Limit Individuals’ Tax Deductions,” Hedge Fund Law Report, Vol. 5, No. 40 (Oct. 18, 2012).