The recent Tax Court decision in Moxon Corporation v. Commissioner, 165 T.C. No. 2 (Filed July 2, 2025), provides critical insights for tax professionals concerning the assessment and collectibility of partnership-level penalties, particularly when underlying tax deficiencies are abated due to procedural errors. This case clarifies the distinct treatment of partnership-level penalties under deficiency procedures and the calculation of "underpayment" for penalty purposes, even in the absence of a collectible tax liability.

In a significant decision for tax professionals navigating Bipartisan Budget Act (BBA) partnership audit procedures, the United States Tax Court in JM Assets, LP v. Commissioner, 165 T.C. No. 1 (2025), delivered a ruling that clarifies the statute of limitations for final partnership adjustments, particularly when a partnership requests modification of an imputed underpayment. This opinion, penned by Judge Buch, underscores the judiciary’s role in ensuring administrative regulations adhere strictly to statutory text, drawing on recent Supreme Court precedent.

As Certified Public Accountants specializing in tax and Enrolled Agents (EA), our role extends beyond mere preparation of returns; it encompasses a rigorous adherence to professional standards set forth by the Internal Revenue Service (IRS). A critical area demanding our expertise and diligence is the Report of Foreign Bank and Financial Accounts (FBAR), FinCEN Report 114. While not a tax return itself, the FBAR is inextricably linked to U.S. tax compliance and is a significant focus of the IRS Office of Professional Responsibility (OPR). This article delves into the FBAR reporting requirements and the specific obligations imposed on practitioners by Circular 230, which governs practice before the IRS as outlined in “Tax Practice Obligations and the Report of Foreign Bank and Financial Accounts,” Alerts from Office of Professional Responsibility, Issue Number: 2025-10.

In a recent Tax Court memorandum, Anaheim Arena Management, LLC v Commissioner, T.C. Memo. 2025-68, the court delved into the complex issue of whether intercompany advances constituted bona fide debt for tax purposes, thereby determining the validity of a significant bad-debt deduction and the applicability of an accuracy-related penalty. This case offers critical insights for tax professionals navigating the often-ambiguous line between debt and equity, particularly in related-party transactions and intricate management agreements.

The court case of American Lighting Company, Inc. v. United States of America had to be filed on June 25, 2025, because it was critically close to the two-year statute of limitations for filing a tax refund suit, given the IRS’s refund claim denial date of June 26, 2023. The complaint itself explicitly states it was "Respectfully submitted, this the 25th day of June, 2025". This timing means the lawsuit was filed just one day before the two-year period from the denial date would have expired.

The reason for this precise timing and why the IRS’s lack of action put the taxpayer at risk is due to specific procedural rules governing tax refund suits and the unusual handling of Employee Retention Credit (ERC) disallowances by the IRS.

As tax professionals, understanding the intricacies of the Trust Fund Recovery Penalty (TFRP) under 26 U.S.C. § 6672 is crucial, particularly when advising clients who hold significant corporate roles. A recent case, Warnement v. The United States, heard in the United States Court of Federal Claims, offers valuable insights into the court’s analysis of the "responsible person" and "willfulness" elements, providing a granular look at the burden of proof in tax controversies.

The "National Taxpayer Advocate’s Fiscal Year 2026 Objectives Report to Congress" is a statutory report submitted annually by the National Taxpayer Advocate to Congress, outlining the objectives for the upcoming fiscal year. This report also includes an analysis of the recently completed 2025 tax filing season to provide context regarding the IRS’s performance and taxpayer challenges, which then informs the systemic advocacy and research objectives for the fiscal year 2026.

The Internal Revenue Service (IRS) has issued significant revisions to the filing exceptions for Schedules K-2 (Partners’ Distributive Share Items—International) and K-3 (Partner’s Share of Income, Deductions, Credits, etc.—International) for both Form 1065 (U.S. Return of Partnership Income) and Form 1120-S (U.S. Income Tax Return for an S Corporation) for tax year 2024. These changes aim to expand the applicability of certain domestic filing exceptions and introduce new small entity exceptions, potentially reducing compliance burdens for many entities. A thorough understanding of these updated requirements is crucial for practitioners navigating the international tax landscape for pass-through entities.

These changes are outlined on the following IRS web pages:

• Form 1065, Schedules K-2 and K-3 filing requirements

• Form 1120-S, Schedules K-2 and K-3 filing requirements

A recent decision from the United States District Court for the District of Arizona in Stenson Tamaddon LLC v. United States Internal Revenue Service, et al. (Case No. CV-24-01123-PHX-SPL) provides critical insights for tax practitioners regarding the Internal Revenue Service’s (IRS) guidance on the Employee Retention Credit (ERC) program. This case addresses a multifaceted challenge to the IRS’s "Notice 2021-20," a 102-page question-and-answer document providing guidance on the ERC. The plaintiff, Stenson Tamaddon LLC (StenTam), a tax advisory firm specializing in ERC claims, contended that this Notice constituted improper legislative rulemaking, bypassing the Administrative Procedure Act’s (APA) notice-and-comment requirements, and was arbitrary, capricious, or beyond the IRS’s statutory authority. The Court, in its ruling on cross-motions for summary judgment, ultimately sided with the government, affirming the IRS’s authority to issue such interpretive guidance without formal rulemaking procedures.

The recent T.C. Memo. 2025-65, Luis Carlos Ibarra Cano v. Commissioner, provides a critical reminder of the Internal Revenue Service’s (IRS) burden in establishing a valid notice of deficiency, particularly when address errors are present. This case highlights the nuanced application of the "last known address" rule and the "harmless error" doctrine.

The recent decision in AbbVie Inc. and Subsidiaries v. Commissioner, 164 T.C. No. 10 (2025), provides critical guidance for tax professionals regarding the application of Internal Revenue Code (I.R.C.) § 1234A, specifically concerning the characterization of termination fees as ordinary deductions or capital losses. This case clarifies the often-debated phrase "right or obligation . . . with respect to property" within § 1234A(1) and its implications for complex corporate transactions.

Tax professionals encounter cases involving collection due process (CDP) and the Internal Revenue Service’s (IRS) determination to uphold collection actions. A recent Tax Court memorandum, Schwartz v. Commissioner, T.C. Memo. 2025-64, provides valuable insights into the criteria the IRS Independent Office of Appeals (Appeals Office) considers when evaluating collection alternatives, particularly installment agreements, and the Tax Court’s standard of review for such determinations. This article will delve into the facts, the taxpayer’s request, the court’s legal analysis, and its application to the specific circumstances, concluding with the implications for tax professionals.

This article addresses the critical updates provided by Notice 2025-33, which significantly impacts digital asset brokers and their compliance obligations under Internal Revenue Code sections 6045, 3406, and related penalty provisions. This notice extends and modifies previously granted transitional relief, offering much-needed breathing room for the evolving digital asset landscape.

The recent Supreme Court decision in Commissioner of Internal Revenue v. Zuch, issued on June 12, 2025, significantly clarifies the jurisdictional limits of the United States Tax Court concerning appeals arising from Collection Due Process (CDP) hearings, particularly when the Internal Revenue Service (IRS) is no longer actively pursuing a levy. This ruling holds substantial implications for CPAs, EAs, and attorneys advising taxpayers navigating IRS collection actions.

As tax professionals, we frequently encounter the intricacies of tax law, particularly when advising clients on refund claims. A recent case, Scott L. Shleifer and Elena Shleifer v. United States of America, heard in the United States District Court for the Southern District of Florida, offers crucial insights into the stringent requirements for substantiating deductions and the critical role of the variance doctrine in tax refund litigation. This article will detail the facts of the case, the taxpayers’ requests for relief, the court’s analysis of the applicable law, and its ultimate conclusions, providing valuable lessons for practitioners.

The United States Tax Court’s recent memorandum opinion in Kramarenko v. Commissioner, T.C. Memo. 2025-61, provides a crucial analysis for tax professionals concerning the interpretation and application of tax treaty provisions, particularly those related to exemptions for students, trainees, and researchers. This case reinforces the distinction between taxable compensation for services and tax-exempt grants, emphasizing the "quid pro quo" doctrine as a cornerstone of the analysis.

As tax professionals, staying abreast of the latest guidance from the Internal Revenue Service (IRS) is paramount to ensuring compliance and providing accurate advice to our clients. Revenue Procedure 2025-23, effective for Forms 3115 filed on or after June 9, 2025, for a year of change ending on or after October 31, 2024, provides a comprehensive list of automatic changes in accounting methods. This Revenue Procedure clarifies and modifies previous guidance, specifically Rev. Proc. 2015-13, 2015-5 I.R.B. 419, and its subsequent modifications. It is an essential resource for taxpayers seeking to change their accounting methods without obtaining advance consent from the Commissioner.

The recent Supreme Court decision in Catholic Charities Bureau, Inc. v. Wisconsin Labor and Industry Review Commission offers critical insights for tax professionals advising religious organizations on unemployment compensation tax exemptions. This ruling underscores the profound interplay between First Amendment principles and state tax laws, particularly when such laws differentiate among religious practices.

The Office of Tax Appeals (OTA) recently issued an opinion in In the Matter of the Appeal of: Q. Tran and R. Medina, OTA Case No. 21088364, addressing critical questions of California residency for the 2007, 2008, and 2009 tax years. This case provides valuable insights into the rigorous standards taxpayers must meet to demonstrate a change in domicile and residency for California tax purposes.

Tax professionals frequently encounter complex scenarios involving intra-entity transfers and debt cancellations. A recent Ninth Circuit decision, Kelly v. Commissioner, No. 23-70040 (9th Cir. 2025), provides critical clarification on the distinct legal standards for claiming a nonbusiness bad-debt deduction under 26 U.S.C. § 166 and recognizing cancellation-of-debt (COD) income under 26 U.S.C. § 61(a)(11) and § 108. This opinion underscores the principle that a debt’s discharge does not automatically render it "wholly worthless" for deduction purposes, rejecting a taxpayer’s attempt to create a simultaneous deduction upon debt cancellation.