Field Attorney Advice (FAA) 20253101F, released on August 1, 2025, addresses two critical issues concerning a net operating loss (NOL) carryback claimed by individual taxpayers who are shareholders of an S corporation undergoing Chapter 7 bankruptcy. This memorandum provides valuable insight into the application of S corporation passthrough rules and the implications of corporate bankruptcy on shareholder tax attributes.

The Department of the Treasury and the Internal Revenue Service (IRS) have issued proposed regulations (REG-132805-17) concerning the determination of an employer’s line of business for purposes of applying the exclusion from gross income for no-additional-cost services and qualified employee discounts under Internal Revenue Code (IRC) Section 132. These proposed regulations are intended to update the business classification system used for these fringe benefits to better reflect current economic activity and reduce administrative burden.

The United States Tax Court recently rendered a significant decision in CFM Insurance, Inc. v. Commissioner, T.C. Memo. 2025-83, a case that adds another layer to the complex landscape of microcaptive insurance arrangements. This article provides a comprehensive overview of the case, from its foundational facts to the Tax Court’s nuanced legal analysis and ultimate conclusions.

The recent decision in JPM Restaurant, LLC v. United States, case No. 1:24-cv-00357, from the United States District Court for the Eastern District of Tennessee, offers important insights for tax professionals navigating Employee Retention Credit (ERC) claims that evolve into litigation. This case highlights critical jurisdictional boundaries regarding tax liability compromises once a matter is referred to the Department of Justice (DOJ).

The American Institute of CPAs (AICPA) has formally requested immediate guidance from the Department of the Treasury and the Internal Revenue Service (IRS) regarding Section 174A of the Internal Revenue Code (IRC), which pertains to domestic research and experimental expenditures (domestic research costs). This urgent appeal, addressed to the Honorable Kenneth J. Kies, Assistant Secretary of the Treasury, Tax Policy, highlights critical issues facing eligible small business taxpayers as they finalize their 2024 federal income tax returns.

The recent decision by the United States Court of Appeals for the Eleventh Circuit in Fannie Wright v. Commissioner of Internal Revenue, No. 24-10563, offers important insights into innocent spouse relief and the application of constitutional law in tax disputes. This article details the factual background, the taxpayer’s request for relief, and the Eleventh Circuit’s rigorous analysis of the law, its application to the facts, and the conclusions reached.

The United States Tax Court recently issued T.C. Memo. 2025-81, Kadau v. Commissioner, a ruling for navigating the complexities of microcaptive insurance arrangements. This case, involving Curtis K. Kadau and Surface Engineering & Alloy Co., Inc. (an S corporation of which Mr. Kadau was the sole shareholder), delves into the deductibility of expenses for purported insurance coverage provided through affiliated captive insurance companies, Risk & Asset Protection Services, Ltd. (Risk & Asset) and RMC Property & Casualty, Ltd. (RMC Property). The Internal Revenue Service (IRS) challenged the arrangement, asserting that it did not constitute actual insurance, thus disallowing deductions and imposing accuracy-related penalties.

Understanding the intricate nuances of tax exemptions for nonprofit organizations is crucial for those involved with tax exempt clients. A recent decision from the United States Court of Appeals for the Eighth Circuit, Mayo Clinic v. United States (Case No. 23-2246), provides significant clarity, particularly concerning the definition of an "educational organization" under Internal Revenue Code (IRC) § 170(b)(1)(A)(ii) and its implications for unrelated business income tax (UBIT) exemptions. This article delves into the factual background, the taxpayer’s request for relief, the court’s detailed legal analysis, and its application to Mayo Clinic’s operations, culminating in the court’s conclusions.

The United States Court of Appeals for the Fourth Circuit recently addressed a critical issue for corporate tax professionals regarding the application of the interest netting provision under 26 U.S.C. § 6621(d) following a corporate merger. This case, Bank of America Corporation v. United States (CA4, Case No. 23-2319) provides essential clarity on the interpretation of the “same taxpayer” requirement for pre-merger underpayments and overpayments.

The Corporate Alternative Minimum Tax (CAMT), introduced by the Inflation Reduction Act of 2022, has presented significant compliance challenges, particularly concerning partnership investments. In response to these burdens and associated costs, the Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) have issued Notice 2025-28. This notice provides crucial interim guidance, signaling a partial withdrawal of the CAMT proposed regulations and the intent to issue revised proposed regulations, incorporating rules similar to those outlined in the notice. Taxpayers may rely on this interim guidance, which aims to simplify the application of CAMT to partnerships and CAMT entity partners.

The upcoming tax filing season is expected to get off to a late start, with the IRS aiming to begin to accept returns somewhere around the President’s Day (February 17, 2026), per a statement made by IRS Commissioner Billy Long at the National Association of Enrolled Agents Tax Summit on July 28, 2025.  The statement was reported in a story about the event published in Tax Notes Today Federal.

The recent Tax Court Memorandum decision in Adrienne Mennemeyer v. Commissioner of Internal Revenue, T.C. Memo. 2025-80, offers valuable insights for tax professionals regarding the taxability of settlement proceeds, the deductibility of business expenses, and the imposition of penalties for failure to timely file. This case underscores the critical importance of meticulous record-keeping and clear documentation in substantiating claims before the Internal Revenue Service (IRS) and the Tax Court.

The Large Business and International (LB&I) Division has announced significant modifications to its examination process, outlined in a recent memorandum effective August 1, 2025. These changes are intended to foster more efficient and effective examinations, enhance taxpayer service, and promote collaborative issue resolution. This article will delve into the procedural updates concerning the elimination of the Acknowledgment of Facts (AOF) Information Document Request (IDR), the updated Fast Track Settlements (FTS) pilot program, and clarifications regarding the applicability of Accelerated Issue Resolution (AIR) to Large Corporate Compliance (LCC) cases.

Staying abreast of changes to the Affordable Care Act’s (ACA) Employer Shared Responsibility Provisions (ESRP) under Internal Revenue Code (IRC) Section 4980H is crucial for advising applicable large employers (ALEs). The Internal Revenue Service (IRS) recently released Rev. Proc. 2025-26, providing the indexing adjustments for the upcoming calendar year 2026. This article will detail the foundational elements of the ESRP, outline the recent adjustments, and discuss other key administrative considerations.

The recent decision in Carole Nicholson v. United States of America, USDC ND FL, Case No. 3:24-cv-00603, serves as a reminder for tax professionals regarding the strict procedural requirements for tax refund claims. This case underscores the jurisdictional prerequisites that must be satisfied before a federal court can hear a taxpayer’s suit against the Internal Revenue Service (IRS), particularly concerning the proper forms and timeliness of administrative claims.

In the realm of tax practice, the substantiation of deductions often proves to be a contentious area, particularly with noncash charitable contributions. The recent Tax Court Summary Opinion in John Henry Besaw v. Commissioner, T.C. Summary Opinion 2025-7, Docket No. 19222-22S (July 21, 2025), provides a stark reminder of the meticulous record-keeping required to preserve these deductions. This case underscores the importance of adhering strictly to statutory and regulatory substantiation rules, even when the underlying charitable intent is not disputed.

Tax professionals must remain apprised of the annual adjustments to critical provisions governing the Affordable Care Act (ACA), particularly those affecting the premium tax credit (PTC) under Internal Revenue Code (Code) §36B and the affordability of employer-sponsored health coverage. Rev. Proc. 2025-25, 2025-32 IRB 1, issued by the Internal Revenue Service (IRS) and the Department of the Treasury, provides these essential indexing adjustments for taxable years and plan years beginning in calendar year 2026. This revenue procedure supplements Rev. Proc. 2014-37, 2014-2 C.B. 363, which outlined the original methodology for these adjustments.

The United States Court of Appeals for the Fifth Circuit recently affirmed the Tax Court’s decision disallowing tax deductions for insurance premium payments made by Dr. Bernard T. Swift’s medical practice to his captive insurance companies and upholding associated penalties. This case, Bernard T. Swift, Jr.; Kathy L. Swift v. Commissioner of Internal Revenue, No. 24-60270, provides crucial insights into the criteria for genuine insurance arrangements and the application of accuracy-related penalties in the context of micro-captive transactions.

Revenue Ruling 2025-15 provides crucial clarification for plan administrators and tax professionals regarding federal income tax withholding and reporting obligations when retirement plan distribution checks remain uncashed and subsequent checks are issued. This analysis delves into the facts presented in the ruling, the Internal Revenue Service’s (IRS) legal interpretation, its application to the specific scenario, and the definitive rules established.

Tax professionals are continually challenged by the complexities surrounding conservation easement valuations, a recurring point of contention with the Internal Revenue Service. The recent Tax Court case, Veribest Vesta, LLC v. Commissioner of Internal Revenue, Docket No. 9158-23, provides valuable insights into the Court’s scrutiny of claimed deductions for such easements, particularly when valuations appear overly optimistic or lack sufficient market support. This article will delve into the facts of this case, the taxpayer’s request for relief, the legal analysis, the application of law to the facts, and the Court’s ultimate conclusions.