CALDERWOOD & HARKNESS LLP Attorneys at Law 1251 Avenue of the Americas, 40th Floor New York, NY 10020 Telephone: (212) 548-6000 Facsimile: (212) 548-6001
May 19, 2023
VIA CERTIFIED MAIL AND ELECTRONIC DELIVERY
Revenue Agent Timothy J. Albrecht (Badge No. 74-28193) Internal Revenue Service Large Business & International Division Pass-Through Entities Practice Area 290 Broadway New York, NY 10007
Re: Ironside Capital Management LP Employer Identification Number: 83-2741956 Tax Year Ended: December 31, 2021 Form 1065 — U.S. Return of Partnership Income Response to Information Document Request #1
Dear Revenue Agent Albrecht:
This firm, Calderwood & Harkness LLP, represents Ironside Capital Management LP ("ICM" or the "Partnership") in connection with the above-referenced examination of ICM's U.S. Return of Partnership Income (Form 1065) for the tax year ended December 31, 2021. As you are aware, a Form 2848 (Power of Attorney and Declaration of Representative) was filed with the Internal Revenue Service on April 14, 2023, designating Sylvia Hartwell and Leila Nazari of Calderwood & Harkness LLP as authorized representatives of ICM with respect to this examination. A copy of the executed Form 2848 was transmitted to the examination team under separate cover and is on file with the IRS Centralized Authorization File (CAF) unit. We respectfully request that all future correspondence, requests, and communications regarding this examination be directed to the undersigned or to Ms. Nazari at the address set forth above.
By way of background, ICM is a Delaware limited partnership organized under the Delaware Revised Uniform Limited Partnership Act, with its principal office located at 590 Madison Avenue, 28th Floor, New York, NY 10022. The general partner of ICM is Ironside Capital GP LLC (Employer Identification Number: 83-2741890), a Delaware limited liability company. The examination of ICM's 2021 Form 1065 was initiated by IRS Letter 2205-D, dated March 22, 2023, which was received by ICM at its principal office on March 29, 2023.
I. Purpose of This Letter
On behalf of ICM, we are writing to transmit the Partnership's response to Information Document Request #1 ("IDR #1"), which was received by the undersigned from the examination team on April 28, 2023. IDR #1 contained forty-two (42) individually numbered items requesting the production of certain books, records, documents, workpapers, and other information relating to ICM's 2021 partnership tax return (Form 1065) for the tax year ended December 31, 2021. The Form 1065 at issue was timely filed on September 15, 2022, pursuant to an automatic six-month extension of time to file (Form 7004) that had been submitted to the Service on or before the original due date of March 15, 2022. The 2021 Form 1065 was prepared by Borwick Craine & Associates LLP, ICM's independent certified public accountants, based upon information and records maintained by the Partnership and its fund administrator, Greystone Fund Administration LLC.
This letter serves as a cover letter and transmittal for the enclosed response materials described more fully below.
II. Description of Enclosed Materials
Enclosed herewith please find ICM's response to IDR #1, consisting of two thousand eight hundred forty-seven (2,847) pages of documents and workpapers responsive to the forty-two (42) items set forth in IDR #1. The enclosed materials have been organized sequentially by IDR item number for the convenience of the examination team. Specifically, the response is arranged with tabbed dividers corresponding to each of the forty-two IDR items, so that each tab corresponds to a particular numbered request. Within each tabbed section, we have included a detailed index identifying each document produced in response to that particular item, together with a brief description of the document, its date (where applicable), and a Bates-number range (where documents have been so stamped for ease of reference).
The documents and information produced in response to IDR #1 include, among other things, the following categories of materials:
•  ICM's 2021 Form 1065, U.S. Return of Partnership Income, and all accompanying schedules, including but not limited to Schedules K-1 (Partner's Share of Income, Deductions, Credits, etc.) issued to each partner, Schedule L (Balance Sheets per Books), Schedule M-1 (Reconciliation of Income (Loss) per Books With Income (Loss) per Return), Schedule M-2 (Analysis of Partners' Capital Accounts), and all other required schedules and attachments as filed with the Service;
•  The Amended and Restated Agreement of Limited Partnership of Ironside Capital Management LP, dated as of January 12, 2018, together with all amendments thereto through December 31, 2021, including the side letter agreements entered into with certain limited partners to the extent such agreements affect the allocation of income, gain, loss, deduction, or credit among the partners;
•  Audited financial statements of ICM for the fiscal year ended December 31, 2021, as prepared by Borwick Craine & Associates LLP, including the auditors' report, the statement of assets, liabilities, and partners' capital, the statement of operations, the statement of changes in partners' capital, the statement of cash flows, the condensed schedule of investments, and the notes to financial statements;
•  ICM's general ledger and trial balance for the fiscal year ended December 31, 2021, as maintained by Greystone Fund Administration LLC, in both summary and detailed form;
•  Books and records of account of the Partnership, including but not limited to the cash receipts and disbursements journal, the accounts payable ledger, the accounts receivable ledger, bank statements and bank reconciliations, and records of capital contributions and withdrawals for the 2021 tax year;
•  Management fee calculations and supporting documentation, including fee schedules, net asset value computations, and management fee invoices issued during the 2021 tax year;
•  Performance allocation (carried interest) computations and supporting schedules, including high-water mark calculations, hurdle rate analyses, incentive allocation worksheets, and end-of-year allocation determinations for each partner, as prepared by Greystone Fund Administration LLC and reviewed by Borwick Craine & Associates LLP;
•  Tax preparation workpapers and supporting schedules prepared by Borwick Craine & Associates LLP in connection with the preparation of ICM's 2021 Form 1065, including but not limited to partnership allocation schedules, Section 704(b) capital account maintenance records, and tax basis capital account reconciliations;
•  Fund administration workpapers prepared by Greystone Fund Administration LLC, including monthly net asset value reports, partner capital account statements, and subscription and redemption records for the 2021 tax year; and
•  Trade records, trade confirmations, account statements, and position reports from Ridgeline Securities LLC, ICM's prime broker, to the extent such records are responsive to the specific items requested in IDR #1.
We have made every effort to respond fully and completely to each of the forty-two items in IDR #1. To the extent that any particular item requested information or documents that are not in ICM's possession, custody, or control, we have so noted in the index for the relevant tab and have provided a brief explanation of the nature and scope of our search for such materials.
III. Reservation of Privileges and Rights
ICM expressly reserves all rights and privileges applicable to the documents and information produced in connection with this response, including but not limited to the attorney-client privilege, the work product doctrine (as set forth in Hickman v. Taylor, 329 U.S. 495 (1947), and its progeny), the tax practitioner privilege under Section 7525 of the Internal Revenue Code, and any other applicable privilege, protection, or immunity from disclosure recognized under federal or state law. The production of any document or information in response to IDR #1 does not constitute, and shall not be deemed or construed to constitute, a waiver of any privilege, protection, or immunity that may apply to such document or information, whether or not a privilege log has been provided with respect to any particular item. To the extent that any document has been inadvertently produced that is subject to a claim of privilege or protection, ICM reserves the right to assert such privilege or protection and to request the return or sequestration of any such document, in accordance with applicable law and the procedures set forth in Treasury Regulation § 301.7602-1 and Internal Revenue Manual § 4.11.55.
ICM further reserves all rights to supplement, amend, correct, or clarify this response at any time, whether in response to additional requests from the examination team, upon the discovery of additional responsive documents, or for any other reason. Nothing in this response, and no document or information produced herewith, should be construed as a concession, admission, or acknowledgment regarding any factual or legal issue that may arise in connection with this examination or any subsequent administrative or judicial proceeding, including but not limited to any proceeding under the centralized partnership audit regime established by the Bipartisan Budget Act of 2015 (Sections 6221 through 6241 of the Internal Revenue Code, as amended). ICM specifically reserves all rights to raise any and all defenses, objections, or arguments at any stage of this examination or any subsequent proceeding, including but not limited to the right to challenge the scope, relevance, or propriety of any request for information or documents.
IV. Cooperation and Future Communications
ICM remains committed to cooperating fully with the examination team throughout the course of this examination, consistent with its rights under applicable law. We understand the importance of a prompt and orderly examination process and will endeavor to respond to any future information requests in a timely manner.
We respectfully request that all future communications, information document requests, and other correspondence relating to this examination be directed to the undersigned, Sylvia Hartwell, or to Leila Nazari, at Calderwood & Harkness LLP, 1251 Avenue of the Americas, 40th Floor, New York, NY 10020, in accordance with the Form 2848 authorization currently on file with the Service. Ms. Nazari may be reached directly at (212) 548-6147 or by email at lnazari@calderwoodharkness.com.
V. Request for Acknowledgment
We respectfully request that you acknowledge receipt of the enclosed materials by returning a signed copy of this letter to the undersigned at your earliest convenience, or by providing written confirmation of receipt via email or other correspondence. We would be pleased to discuss any questions you may have regarding the enclosed documents or any aspect of this response. In addition, we are available at your convenience to arrange a conference to discuss the scope and progress of the examination, to address any preliminary questions the examination team may have after reviewing the enclosed materials, or to discuss any other matters that may facilitate the efficient resolution of the examination.
Should you require any additional information, documentation, or clarification beyond the materials enclosed herewith, please do not hesitate to contact the undersigned or Ms. Nazari at the telephone numbers and email addresses set forth below.
We appreciate your courtesy and professionalism in this matter.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Sylvia Hartwell Partner, Tax Department
Direct Telephone: (212) 548-6034
Email: shartwell@calderwoodharkness.com
Enclosures:
Response to Information Document Request #1 (2,847 pages, organized sequentially by IDR item number with tabbed dividers and index for each item)
cc: (via email)
Dawn M. Petrovic, Revenue Agent, IRS Large Business & International Division Marcus Trent, Esq., General Counsel, Ironside Capital Management LP Leila Nazari, Esq., Calderwood & Harkness LLP