Jurisdictional Clarity: The Timeliness Requirement for TEFRA Readjustment Petitions

The United States Tax Court, in North Wall Holdings, LLC, Schuler Investments, LLC, a Partner Other Than the Tax Matters Partner v. Commissioner of Internal Revenue, 165 T.C. No. 9 (2025), addressed a foundational issue regarding the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) unified audit and litigation procedures: whether the statutory deadlines for filing a petition for readjustment of partnership items are jurisdictional limitations or merely claims processing rules subject to equitable tolling. The Court ultimately held that the deadlines prescribed in I.R.C. § 6226(a) and (b) are jurisdictional and that equitable tolling is inapplicable.

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Transitional Reporting for Qualified Passenger Vehicle Loan Interest

The Internal Revenue Service (IRS) has issued Notice 2025-57, providing transitional guidance regarding the implementation of new information reporting requirements concerning interest received on specified passenger vehicle loans. This guidance is directed at those entities receiving such interest, referred to as “recipients,” and applies specifically to reporting obligations for the 2025 calendar year.

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Technical Revisions to Revenue Procedure 2025-32: Analyzing the October 17 Amendments

As tax professionals (CPAs and EAs), we rely on timely and accurate guidance from the Internal Revenue Service (IRS) to determine proper inflation adjustments and interpret legislative changes. Rev. Proc. 2025-32 sets forth critical inflation-adjusted items for various provisions of the Internal Revenue Code (Code) for the 2026 taxable year, reflecting amendments made by the One, Big, Beautiful Bill Act (OBBBA), Public Law 119-21, 139 Stat. 72 (July 4, 2025).  On October 17, 2025 the IRS announced changes to be made to the Revenue Procedure’s numbers, a new section was added and an updated version was posted on the IRS website.

The issuance of a revised version of Rev. Proc. 2025-32 on October 17, modifying the original October 9 version, signals necessary corrections and additions impacting several key inflation-adjusted amounts and the procedural description of OBBBA changes. This article details the specific modifications incorporated into the revised document, focusing on the affected Code sections and the magnitude of the changes.

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Reevaluating the Domestically Controlled Qualified Investment Entity Exception: Proposed Amendments to Treasury Regulation 1.897-1

The Treasury Department has released Proposed Regulations under IRC Section 897 to withdraw the domestic corporation look-through rule that was adopted in final regulations issued in 2024 (Proposed Reg. Section 1.871-1, REG-109742-25, published in the Federal Register October 21, 2025).

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Collection Due Process Analysis: Abuse of Discretion in Sustaining Levy Regarding Installment Agreements

This article addresses the memorandum opinion in Avalon Home Health, Inc. v. Commissioner, T.C. Memo. 2025-107, a Collection Due Process (CDP) case that provides essential insights into the Internal Revenue Service (IRS) Independent Office of Appeals’ (Appeals) requirement to properly verify statutory requirements and consider collection alternatives under section 6330(c)(3) of the Internal Revenue Code. This case resulted in a partial denial of the Commissioner’s Motion for Summary Judgment and a remand to Appeals due to significant deficiencies in the administrative process.

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Taxation of International Investment Losses: Disallowance of a Theft Loss Deduction Under Section 165

The United States Tax Court, in Potts v. Commissioner, T.C. Memo. 2025-108, addressed a deficiency of $431,691 and an accuracy-related penalty of $86,338 under Section 6662(a) determined by the Commissioner of Internal Revenue (Respondent) against petitioners Craig K. and Kristen H. Potts for the 2014 taxable year. The predominant issue concerned the disallowance of a $2 million theft loss deduction claimed by the petitioners pursuant to Section 165.

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IRS E-File Suspension Authority: An Examination of Property Interests and Administrative Procedure

This article addresses the recent Memorandum & Order issued by the United States District Court for the Eastern District of New York in Zirin Tax Company, Inc. v. United States of America, 24-cv-01511 (NCM) (MMH), dated October 15, 2025. This case involved a tax preparer challenging the Internal Revenue Service’s (IRS) decision to suspend the preparer’s Electronic Filing Identification Numbers (EFINs) and subsequent expulsion from the e-file program.

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Operational Test Failure: Commercial Activities and Private Benefit Preclude Section 501(c)(3) Exemption

This article reviews the findings of the United States Tax Court in Coaches 101 a NJ Nonprofit, v. Commissioner, T.C. Memo. 2025-106 (Oct. 15, 2025), a case focused on the denial of tax-exempt status under Internal Revenue Code (I.R.C.) Section 501(c)(3). The Court, in granting the Commissioner’s Motion for Summary Judgment, underscored that organizations must satisfy both the organizational and operational tests, emphasizing that a single substantial nonexempt purpose or evidence of private inurement is fatal to qualification.

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Lawsuit Settlement Enforcement and Tax Disclosure Obligations

As tax professionals, we frequently advise clients regarding the taxability and reporting requirements associated with litigation settlements. The recent Report and Recommendation in Barbara Rumain v. Gregoris Motors, Inc., No. 17-CV-7251 (DG) (TAM) from the United States District Court for the Eastern District of New York provides a relevant illustration of the contractual enforceability of settlement agreements, particularly when a dispute arises post-agreement concerning mandatory IRS reporting via Form 1099.

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Employee Retention Credit Refunds in Bankruptcy: Property of the Estate Dispute

This article examines the decision of the United States Bankruptcy Court for the Southern District of New York in Stephen S. Gray v. The Williamsburg Hotel BK, LLC, Toby Moskovits, and Michael Lichtenstein, Adversary Proceeding No. 22-07049, which addressed whether Employee Retention Tax Credit (ERTC) refunds claimed and received by a non-debtor manager constitute property of the Debtor’s estate and must be turned over to the Liquidation Trustee.

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The Concrete Injury Requirement in ERTC Consultant Litigation: An Analysis of Greenway Equipment Sales, Inc. v. ERC Specialists, LLC

This analysis examines the United States District Court for the District of Utah’s Memorandum Decision and Order in Greenway Equipment Sales, Inc. v. ERC Specialists, LLC, et al. (Case No. 2:24-CV-773-DAK-DBP), focusing on the court’s assessment of Article III standing in a lawsuit stemming from the utilization of Employee Retention Tax Credit (ERTC) consulting services. This case provides insight for tax professionals regarding the pleading requirements for damages claims against third-party promoters, particularly when the underlying tax credit results in a net positive financial outcome for the taxpayer.

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2026 Inflation Adjustments for Tax Professionals: Revenue Procedure 2025-32 Analysis

The Internal Revenue Service (IRS) has issued Revenue Procedure 2025-32, which modifies prior guidance (Rev. Proc. 2024-40) to incorporate statutory changes made by Public Law 119-21, 139 Stat. 72 (July 4, 2025), commonly known as the One, Big, Beautiful Bill Act (OBBBA). This Revenue Procedure sets forth the inflation-adjusted items pertinent to the 2026 taxable year for various provisions of the Internal Revenue Code (Code), adjustments which are generally determined by reference to Code Section 1(f).

This document details the key adjustments applicable for the 2026 taxable year, citing the specific Code sections and corresponding Revenue Procedure sections where the adjusted amounts are located. Tax professionals should note that unless otherwise specified, all references to "section" or "§" refer to provisions of the Internal Revenue Code.

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IRS Contingency Planning: Operational Impact on Tax Practice and Filing Season Preparedness

This overview is designed for tax professionals, including CPAs and Enrolled Agents (EAs), providing a technical summary of the Internal Revenue Service’s Fiscal Year 2026 Lapse in Appropriations Contingency Plan. The plan outlines which essential activities will continue during a lapse, starting October 8, 2025, through April 30, 2026, encompassing the critical Tax Year 2026 filing season period.

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Timeliness and the Deed-in-Lieu: A Review of Cancellation-of-Indebtedness Income Timing and the Variance Doctrine

When advising clients on complex debt relief transactions, it is crucial to understand not only the substantive law governing the timing of income recognition but also the procedural prerequisites for challenging IRS determinations. The recent Summary Order issued by the United States Court of Appeals for the Second Circuit in Romeo Salta, Jr., Phyllis Polega v. United States of America, 24-2700-cv (Oct. 6, 2025), affirmed the District Court’s finding regarding the proper tax year for cancellation-of-indebtedness (COI) income and provided a stark reminder of the binding nature of the doctrine of variance.

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Tax Exemption Denial for a Gated Community HOA by the Tax Court

This article examines the findings of the United States Tax Court in Mira Vista Homeowners Association, Inc. v. Commissioner of Internal Revenue, T.C. Memo. 2025-102, which addressed a homeowner association’s denial of tax-exempt status under Internal Revenue Code (I.R.C.) § 501(c)(4). The petitioner, Mira Vista Homeowners Association, Inc. (the Association), sought a declaration that the Commissioner’s final adverse determination, issued on April 6, 2022, was erroneous.

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Supervisory Approval, Reasoned Decision Making, and the Limits of APA Review in Tax Court

As tax professionals, we understand the critical procedural requirement of I.R.C. § 6751(b)(1) regarding supervisory approval of penalties. The recent Tax Court opinion in Computer Sciences Corporation v. Commissioner, 165 T.C. No. 8 (Oct. 6, 2025) provides essential guidance on the procedural depth required for this approval, specifically addressing arguments that the Administrative Procedure Act (APA) mandates "reasoned decision making" beyond a timely written signature.

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IRS Revenue Ruling 2025-20: Updated SIFL Rates for Noncommercial Employer-Provided Flights

The Internal Revenue Service (IRS) has issued Revenue Ruling 2025-20 to provide the updated terminal charge and Standard Industry Fare Level (SIFL) mileage rates for valuing noncommercial flights on employer-provided aircraft. This guidance is crucial for tax professionals advising clients on the taxation of fringe benefits under section 61 of the Internal Revenue Code. The Department of Transportation (DOT) calculates these rates, which are reviewed on a semi-annual basis, necessitating periodic updates from the IRS.

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A Tale of Two Opinions: The Tax Court on Substantiation, Reasonable Cause, and Penalties in Green

On October 2, 2025, the U.S. Tax Court released two significant opinions in the consolidated cases involving the shareholders of Hobby Lobby Stores, Inc. (The David and Barbara Green 1993 Dynasty Trust, et al. v. Commissioner). The first, a reviewed opinion by the full court (Green 1993 Dynasty Trust v. Commissioner, 165 T.C. No. 7), addresses complex substantiation issues for noncash charitable contributions and the application of various Code sections governing deductions for trusts. The second, a memorandum opinion (Green 1993 Dynasty Trust v. Commissioner, T.C. Memo. 2025-100), focuses on the procedural requirements for penalty assessments under I.R.C. § 6751(b) and the reasonable cause defense for valuation misstatement penalties.

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