Keeping CPAs Up to Date on Tax Matters
A site devoted to articles on current developments in federal taxes geared toward CPAs in tax practice.
Chief Counsel Advice 202505027 addresses the validity of extensions to the statute of limitations for partnership adjustments under the Bipartisan Budget Act of 2015 (BBA) audit rules. The memorandum concludes that the extensions in question were invalid because they were not signed by the designated partnership representative (PR) or designated individual (DI) as required by law.
Read MoreIn Clark v. Commissioner, T.C. Memo. 2025-13, the Tax Court addressed whether the taxpayer was liable for self-employment tax and an accuracy-related penalty. The Court resolved both issues in favor of the Commissioner.
Read MoreIn Langlois v. Commissioner, T.C. Memo. 2025-12, the Tax Court addressed a deficiency of $27,820 and an accuracy-related penalty of $5,564 asserted by the IRS against Thomas W. Langlois for the 2015 tax year. The court’s decision hinged on Mr. Langlois’s failure to substantiate deductions for unreimbursed employee business expenses and partnership losses, largely due to inadequate recordkeeping. This case underscores the critical importance of maintaining meticulous records to support tax deductions.
Read MoreThe Fifth Circuit’s recent decision in Balentine v. United States serves as a critical reminder of the "pay first, litigate later" principle that has long governed federal tax refund litigation. This article will delve into the details of the Balentine case, its reliance on the landmark Supreme Court decision Flora v. United States, 362 U.S. 145 (1960), and provide a comprehensive analysis of the issues involved for the benefit of tax professionals.
Read MoreThis private letter ruling (PLR 202505002) addresses the deductibility of medical expenses related to in vitro fertilization (IVF) and gestational surrogacy under Internal Revenue Code Section 213.
Read MoreIn January 2025, Senators Crapo (Republican Chair of the Senate Finance Committee) and Wyden (Ranking Democrat on the Senate Finance Committee and immediately previous Chair) released a discussion draft of bipartisan legislation (tentatively with a name of the Taxpayer Assistance and Service Act (TAS)) aimed at improving IRS procedures and administration. The proposed legislation is intended to enhance the taxpayer experience by facilitating better communication between the IRS and taxpayers, streamlining tax compliance and dispute processes, and ensuring access to timely expert assistance.
Read MoreIn the case of Carol D. Gomez v. Commissioner, Docket No. 3339-24S, the Tax Court addressed a taxpayer’s request for relief from joint and several liability for a tax deficiency arising from a joint return. The Court’s decision, rendered orally by Special Trial Judge Diana L. Leyden on December 11, 2024, provides a detailed analysis of the facts, the taxpayer’s arguments, and the relevant legal authorities. The Court ultimately concluded that Ms. Gomez was not entitled to relief under any of the provisions of I.R.C. § 6015.
Read MoreThis case, Leo v. Commissioner, T.C. Memo. 2025-9, involves a dispute over the valuation of a property donated to charity and the resulting tax implications for the petitioners, Karl W. and Fay L. Leo. The central issue is the fair market value of the Bankhead Property, consisting of buildings and 136.4 acres of land in Union County, Mississippi, as of December 31, 2013. The Leos claimed a charitable contribution deduction based on a valuation of $15,800,000, while the Commissioner of Internal Revenue asserted a value of $4,050,000. The Tax Court sided with the Commissioner, finding the value to be $4,050,000 and upheld the deficiencies and penalties assessed against the Leos.
Read MoreIn Tooke v. Commissioner, 164 T.C. No. 2 (2025), the Tax Court adjudicated a case concerning a taxpayer’s challenge to the IRS Independent Office of Appeals’ structure and staffing. The petitioner, Charlton C. Tooke III, sought review of a Notice of Determination that sustained a federal tax lien and proposed levy action, which stemmed from his unpaid federal income tax liabilities for the years 2012 through 2017. The case is notable for its examination of the Appointments Clause, the separation of powers doctrine, and the specific roles within the IRS Independent Office of Appeals.
Read MoreThe case In re: Anthony Scott Levandowski, Case No. 20-30242 HLB, in the United States Bankruptcy Court for the Northern District of California, concerns a dispute over the taxability of a payment made by Uber to Google as part of a settlement involving Anthony Scott Levandowski. The court’s memorandum opinion and order, issued on January 24, 2025, addresses the tax implications of this payment, known as the "Uber Main Payment". The court ultimately concluded that the Uber Main Payment constituted taxable gross income to Mr. Levandowski.
Read MoreA taxpayer’s failure to provide additional requested financial information and proof of compliance with other tax-filing obligations was found to justify the IRS’s denial of relief in a collection due process hearing, despite significant IRS procedural errors in an order issued in the case of Nelson v. Commissioner.
Read MoreThe IRS denied tax-exempt status under IRC Section 501(c)(3) in LTR 202504021 to an organization that planned to provide assistance, primarily to its members in need, if there is a death, marriage, or birthday.
Read MoreFinCEN has updated the report on its website detailing the impact of ongoing litigation on covered entities' obligations to file BOI reports under the Corporate Transparency Act.
Despite the Supreme Court’s action on January 23, 2025 in Texas Top Cop Shop, Inc. v. McHenry, reporting companies are not currently required to file beneficial ownership information with FinCEN. Additionally, these companies are not subject to liability if they fail to file this information.
This is because of a separate nationwide order issued on January 7, 2025 by a different federal judge, also from the Eastern District of Texas, in Smith v. U.S. Department of the Treasury remains in place. (See Third US District Court Grants an Injunction Against Enforcement of the BOI Reporting Requirements With Effective Date Portion of the Injunction Applicable to All Taxpayers )
FinCEN notes that despite the current lack of a requirement to file, reporting companies may still voluntarily submit beneficial ownership information reports.
You can read the alert at https://www.fincen.gov/boi
Prepared with the assistance of NotebookLM
An emailed memorandum (Chief Counsel Email 202504016) analyzes the IRS’s obligation to process amended tax returns, noting that while there’s no statutory requirement to do so, the IRS has established procedures for processing them.
Read MoreThe Chief Counsel Advice (CCA 202504014) memorandum discusses the examination of a tax-exempt private foundation (the Foundation) and its financial dealings with business entities owned and operated by its foundation manager.
Read MoreThe US Supreme Court has reversed the decision of the Fifth Circuit Court of Appeals Merits Panel and again removed the injunction issued by the US District Court for the Eastern District of Texas against enforcement of the beneficial ownership reports under the Corporate Transparency Act (McHenry v. Texas Top Cop Shop (originally Texas Top Cop Shop, Inc. v. Garland), Application for Stay, US Supreme Court, January 23, 2025). As of the time this is being written FinCEN has not yet posted information about the new due date for reports originally due while the enforcement was on hold.
Read MoreThe case of Franklin v. Commissioner, TC Memo 2025-8, involves a dispute between Ana M. Franklin (the petitioner) and the Commissioner of Internal Revenue (the respondent) regarding deficiencies in the petitioner’s federal income tax for 2015 and 2018. The court consolidated the cases for trial, briefing, and opinion.
Read MoreThis case, Seabrook Property, LLC v. Commissioner, involves a dispute over a noncash charitable contribution deduction claimed by Seabrook Property, LLC (Seabrook) for a conservation easement it granted on approximately 622 acres of land in Liberty County, Georgia. The Commissioner of Internal Revenue disallowed the deduction in full, also determining that Seabrook was subject to accuracy-related and reportable transaction penalties.
Read MoreThe Tax Cuts and Jobs Act (TCJA) of 2017 included many provisions that are scheduled to expire, mostly at the end of 2025. The Congressional Research Service (CRS) report from January 17, 2025, details these expiring provisions and provides estimates of the revenue effects of extending them. According to the Joint Committee on Taxation (JCT), extending the expiring individual income tax provisions would reduce federal tax collections by $3.3 trillion over the 10-year budget window from FY2025-FY2034. Extending the higher estate tax exemptions would cost $167 billion, and extending the business provisions would cost $551 billion. Overall, the JCT forecasts that extending these provisions would cost $4 trillion. In most years, the revenue loss would be between 1.2% and 1.4% of gross domestic product (GDP)
Read MoreThe Inflation Reduction Act of 2022 (IRA) contained significant changes to both the Energy Efficient Home Improvement Credit under Internal Revenue Code (IRC) Section 25C and the Residential Clean Energy Property Credit under IRC Section 25D. These updated FAQs provide details on the IRA’s changes to these credits, revised as of January 17, 2025. One key update is the addition of information regarding the PIN reporting requirements for claiming these credits for assets placed in service on or after January 1, 2025.
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