You have worked as a roadie for the Rolling Stones for the last 20 years. Your responsibilities have grown over that period, so that now you are "The Man", in charge of all concert set-up and take-down activities. This is a big responsibility. The sets cost upwards of $2,000,000, the band instruments you set up are worth another several million $, the setup and take-down activities take a full 5 days for each concert (3 days set-up, 2 days take-down), and it requires significant experience and knowledge on your part with regard to each venue to make sure everything goes as planned. In addition, you are responsible for transporting the sets and band instruments to each venue.

Mick J comes to you with a proposition that he credits his promoter with having dreamed up. Up to this point in time, the Rolling Stones have contracted directly with each individual concert organizer for all aspects of the concerts to be performed. Mick suggests you set up a new LLC to be owned by you, the band members, the promoter, and a host of other 'hangers on'. You will be the Managing Member (think CEO) of the LLC. The LLC will contract separately with each concert organizer to provide transportation, set-up and take-down services for each concert. This contract will be entirely separate from the contract with the band to actually perform at the concert.

You surprise Mick by letting him know you have been taking a tax class that might provide some insight into why his promoter is making this proposal. When you mention the term "specified services", Mick lights up and says "Yeah, that's what the guy was saying too! Just take it from here, I'm late for the pre-party."

Why is the promoter suggesting this new LLC and the separate contractual arrangement? What issues do you see in realizing any tax benefit from this revised business arrangement for their concert tours? Submit your response in the form of a Word document attached to this Assignment . Consider the potential benefit to the band members, and to you as Managing Member. Also comment on any perceived tax risks you see. One page double-space should be more than enough to cover the questions.