Photo of Michael J. Grace

Education

J.D., University of Michigan Law School

B.S., University of Illinois at Urbana-Champaign 

Bar and Court Admissions

District of Columbia Bar

California Bar

Illinois Bar

U.S. Tax Court

Certifications

Certified Public Accountant (Illinois)

Michael J. Grace

Consulting Counsel

Practice Areas

Drawing upon more than 35 years’ experience practicing tax law, Michael serves clients of Wiley Rein LLP as Consulting Counsel. Both a lawyer and a certified public accountant (CPA), Michael has represented domestic and foreign companies in a broad range of tax transactional, planning, and controversy matters spanning numerous industries. He has guided clients toward prevailing in tax controversies with the Internal Revenue Service (IRS), state revenue agencies, and before the U.S. Tax Court. 

At the IRS Office of Chief Counsel (National Office) in Washington, Michael played a significant role legislatively developing and administratively interpreting the Passive Activity Limitations and associated rules in the Tax Reform Act of 1986 attacking abusive tax shelters.  Based on that experience and since then in private law practice, Michael has developed a reputation for leading expertise on the taxation of passthrough entities (including limited liability companies, partnerships, and S corporations) and their owners.  He has repeatedly published in preeminent tax publications including the Journal of Taxation, Bloomberg BNA, Tax Analysts, and Wolters Kluwer (CCH) and has presented at tax conferences both nationally and in Washington, DC.

Representative Experience

  • Structures and documents complicated transactions using vertically and horizontally tiered passthrough entities. Specific experience includes: 
    • Structured a transaction in which a purchaser acquired assets while a seller disposed of an interest in a limited liability company, enabling the purchaser to step up tax basis in assets and the seller to recognize a significant net operating loss.
    • Designed a transaction enabling sellers to dispose of stock in S corporations without exposing the purchasers to possible tax liabilities associated with acquiring stock.
  • Drafts partnership, limited liability company, joint venture, and other agreements for many industries including real estate.
  • Advises U.S. taxpayers on tax consequences of conducting business or investing abroad (outbound transactions) and foreign persons on tax consequences of conducting business or investing in the U.S. (inbound transactions) including issues arising under the Foreign Investment in U.S. Real Property Tax Act of 1980 (FIRPTA), tax withholding obligations, and tax reporting requirements.
  • Counsels colleagues and clients on tax ramifications of alternative forms of non-cash equity compensation including incentive stock options, nonqualified stock options, and capital and profits interests in partnerships and limited liability companies. 

Professional Experience

  • Director, Graduate Tax and Securities (LL.M.) Programs, Georgetown University Law Center (2003-2005)
  • Senior Manager, Ernst & Young National Tax Department (1992-1996)
  • Senior Attorney-Advisor, IRS Office of Chief Counsel (Legislation and Regulations Division (L&R) and Office of Associate Chief Counsel (Passthroughs and Special Industries (PSI)) (1985-1990)

Affiliations

  • American Bar Association, Section of Taxation
    • Chair, Real Estate Committee (2001-2003)
  • District of Columbia Bar Taxation Section
  • State Bar of California
  • Illinois Bar Association

Recognitions

  • AV Preeminent Peer Rated for Highest Level of Professional Excellence
  • Special Act Awards (1987, 1988); Sustained Superior Performance Award (1989), IRS Office of Chief Counsel (National Office), Washington, DC

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