In the recent Tax Court Memorandum decision Estate of Spenlinhauer v. Commissioner, T.C. Memo. 2025-134, the Court addressed a complex mix of procedural failures, valuation disputes, and phantom assets. For tax professionals, this case serves as a stark reminder of the cascading consequences of failing to timely file Form 706, the strict substantiation requirements for Section 2053 deductions, and the piercing nature of transferee liability under Section 6901.

The Internal Revenue Service has issued its annual guidance regarding the procedures for issuing letter rulings, determination letters, and technical advice. For the 2026 cycle, practitioners must familiarize themselves with Revenue Procedure 2026-1, Revenue Procedure 2026-2, Revenue Procedure 2026-3, Revenue Procedure 2026-4, and Revenue Procedure 2026-5. These documents collectively establish the administrative framework for tax administration, delineating the jurisdiction of Associate Chief Counsel offices, the rights of taxpayers during examination and appeals, and the specific areas where the Service will decline to issue private guidance. The following analysis details the legal basis for these procedures and highlights the significant changes affecting tax practice for the upcoming year.

The Internal Revenue Service has issued Notice 2026-10, establishing the optional standard mileage rates for computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes effective January 1, 2026. This guidance also updates the basis reduction amounts for depreciation and sets the maximum standard automobile cost for fixed and variable rate (FAVR) plans.

On December 23, 2025, the Internal Revenue Service released updated guidance in Fact Sheet FS-2025-10, titled "Updates to Questions and Answers about the Premium Tax Credit." This issuance supersedes previous guidance and incorporates critical legislative changes enacted under P.L. 119-21, specifically regarding the expiration of temporary relief measures codified in Internal Revenue Code (IRC) Section 36B. For tax professionals, the most immediate and material technical updates concern the sunsetting of repayment limitations for excess Advance Premium Tax Credits (APTC) and the adjustment of applicable affordability percentages for tax years beginning after December 31, 2025.

The Internal Revenue Service recently released Fact Sheet 2025-09 (FS-2025-09), providing updated guidance on the limitation on business interest expense deductions under Internal Revenue Code Section 163(j). This guidance incorporates significant statutory amendments arising from the legislation referred to as the "One, Big, Beautiful Bill" (P.L. 119-21). For tax professionals, these updates necessitate a careful review of adjusted taxable income (ATI) computations, the definition of motor vehicles for floor plan financing, and the interaction between interest limitations and capitalization rules.

This article examines the December 2025 revised questions within the Fact Sheet, correlating the IRS’s administrative positions with the underlying statutory text of Section 163(j). Note that while the prompt requests conclusions from a "court" or "judge," the provided source material consists of administrative guidance and statutory code; therefore, the analysis focuses on the conclusions and determinations issued by the IRS and Congress.

The following are detailed descriptions of the top 10 tax crime cases of 2025 as identified by the IRS Criminal Investigation (IRS-CI) Division. These cases involve a range of financial crimes including pandemic relief fraud, public corruption, cybercrime, and tax evasion.

The recent enactment of the One, Big, Beautiful Bill Act (OBBBA) introduced significant changes to the Internal Revenue Code, specifically regarding the sale of agricultural assets. One of the most critical additions for our clients in the agricultural sector is the new Internal Revenue Code (IRC) Section 1062. This section allows for the deferral of tax liability arising from specific farmland dispositions. However, the interaction between this deferral mechanism and the estimated tax payment requirements under IRC Sections 6654 and 6655 created an immediate technical conflict.

To resolve this, the Internal Revenue Service released Notice 2026-3. This article examines the statutory framework of the Section 1062 election, the estimated tax conflict it created, and the specific relief provided by the Notice.

The Department of the Treasury and the Internal Revenue Service have issued Notice 2026-6, granting additional transition relief regarding the administration of State paid family and medical leave (PFML) programs. This guidance extends the non-enforcement period originally established in Revenue Ruling 2025-4, specifically concerning the taxation and reporting of medical leave benefits attributable to employer contributions.

For practitioners advising state administrators or employers participating in state PFML initiatives, it is critical to distinguish between the relief that has been extended and the specific compliance requirements that will nonetheless take effect in 2026.

A significant development in federal drug policy occurred on December 18, 2025, with the issuance of a new Executive Order prioritizing the rescheduling of marijuana. For CPAs with clients in the state-legal cannabis sector, this action signals a potential and expeditious end to the onerous tax burdens imposed by Internal Revenue Code (IRC) Section 280E.

This article details the new Executive Order, reviews the proposed rule it addresses, and analyzes the technical tax implications regarding Schedule I status and the deductibility of business expenses.

In the recent Tax Court Memorandum decision Fussell v. Commissioner, T.C. Memo. 2025-131, the Tax Court offered a stark reminder regarding the stringent substantiation requirements for business bad debts under Internal Revenue Code (IRC) Section 166 and the mechanical application of Net Operating Loss (NOL) carryovers under Section 172. For tax professionals, this case serves as a critical case study on the distinction between capital contributions and bona fide debt, as well as the burden of proof required to sustain NOL deductions in years subsequent to the alleged loss.

For tax practitioners representing cannabis clients, the intersection of I.R.C. § 280E and collection alternatives has long been a contentious battlefield. On December 16, 2025, the United States Tax Court issued two opinions regarding Mission Organic Center, Inc.—a reviewed opinion covering tax years 2016 through 2020, and a memorandum opinion covering tax year 2021.

These decisions provide critical guidance on how the Internal Revenue Service (IRS) calculates Reasonable Collection Potential (RCP) for marijuana businesses and underscores the procedural requirements Settlement Officers must follow to avoid an abuse of discretion. While the Tax Court upheld the Service’s harsh policy of disregarding § 280E-disallowed expenses when calculating RCP in the reviewed opinion, it simultaneously remanded the 2021 case due to the Appeals Officer’s failure to properly review the administrative record.

In the wake of the Supreme Court’s decision in SEC v. Jarkesy, 144 S. Ct. 2117 (2024), tax practitioners have closely monitored how the judiciary would apply the Seventh Amendment’s jury trial requirement to Internal Revenue Service (IRS) penalty assessments. In Riddle Aggregates, LLC v. Commissioner, 165 T.C. No. 12 (Dec. 15, 2025), the Tax Court addressed this issue head-on regarding accuracy-related penalties asserted in a partnership-level proceeding.

This article details the facts, the constitutional arguments raised by the petitioner, and the Tax Court’s technical analysis rejecting the applicability of the Seventh Amendment to civil tax penalties under I.R.C. § 6662.

For tax professionals representing clients with commingled funds and unfiled returns, the recent Tax Court decision in Chernomordikov v. Commissioner, T.C. Memo. 2025-129, offers a critical examination of the bank deposits method, the substantiation of Cost of Goods Sold (COGS), and the high evidentiary bar required to sustain fraudulent failure to file penalties. While the court sustained the majority of the deficiencies based on the taxpayer’s lack of records, the decision regarding the fraud penalty provides a nuanced look at how the "missing witness" rule applies when a tax preparer fails to testify.

With the enactment of the "One, Big, Beautiful Bill Act" (Public Law 119-21) in July 2025, Congress introduced a new nonrefundable income tax credit under Internal Revenue Code Section 25F. This credit, effective for calendar years beginning in 2027, incentivizes qualified contributions to Scholarship Granting Organizations (SGOs). To facilitate the implementation of this credit, the Internal Revenue Service released Revenue Procedure 2026-6. This article examines the procedural framework established by the IRS, detailing the statutory background, the mechanism for State elections, and the specific requirements for the "Advance Election" process.

On April 1, 2025, the U.S. House of Representatives passed H.R. 1491, known as the "Disaster Related Extension of Deadlines Act". On December 11, 2025 the Senate by unanimous consent approved the House bill without amendment and the bill was transmitted to the President for his signature.

For tax practitioners, this legislation addresses two persistent statutory misalignments regarding federally declared disasters: the interaction between filing postponements and the refund lookback period, and the premature issuance of collection notices. The bill amends the Internal Revenue Code (IRC) to ensure that disaster relief provisions under IRC § 7508A function in parity with standard filing extensions.

The recent Tax Court decision in Mirch v. Commissioner, T.C. Memo. 2025-128, offers a stark reminder to tax professionals regarding the rigorous substantiation standards required for Real Estate Professional Status (REPS) and material participation, as well as the nuances of collection due process (CDP) procedural defenses. The case involves petitioners who were both attorneys, one of whom possessed an LL.M. in taxation and was a Certified Public Accountant. Despite this professional background, the Court upheld the sustaining of a Notice of Federal Tax Lien (NFTL) and rejected the petitioners’ underlying tax positions due to insufficient evidence and aggressive interpretations of passive activity loss rules.

The California Office of Tax Appeals (OTA) recently issued an opinion in In the Matter of the Appeal of Diet Standards LLC (OTA Case No. 230613542), decided on October 7, 2025. This case serves as a critical reminder to tax practitioners regarding the scope of "doing business" in California, particularly concerning out-of-state entities utilizing the Fulfillment by Amazon (FBA) program. The OTA affirmed the Franchise Tax Board’s (FTB) position that physical presence via inventory, regardless of value, satisfies the statutory definition of doing business under Revenue and Taxation Code (R&TC) section 23101(a), independent of the bright-line economic nexus thresholds found in section 23101(b).

The enactment of the One, Big, Beautiful Bill Act (OBBBA), Pub. L. 119-21, on July 4, 2025, introduced significant amendments to Section 223 of the Internal Revenue Code intended to expand the availability of Health Savings Accounts (HSAs). Prior to this legislation, strict definitions regarding High Deductible Health Plans (HDHPs) and disqualifying coverage often prevented taxpayers from utilizing HSAs despite having high out-of-pocket medical costs. The IRS has issued Notice 2026-5 to provide technical guidance on these statutory changes, specifically addressing the permanent expansion of telehealth safe harbors, the inclusion of certain Bronze and Catastrophic plans as HDHPs, and the treatment of Direct Primary Care Service Arrangements (DPCSAs).

Summary of the Final Rule The United States Postal Service (USPS) has adopted a final rule (FR Doc. 2025-20740) adding Section 608.11, "Postmarks and Postal Possession," to the Domestic Mail Manual (DMM). The rule formally defines postmarks and identifies the types of markings that qualify as such. Its primary purpose is to improve public understanding that while a postmark confirms the USPS possessed a mailpiece on the date inscribed, that date does not necessarily align with the date the USPS first accepted possession of the item. The rule clarifies that the USPS does not postmark all mail in the ordinary course of operations and that the absence of a postmark does not imply the USPS did not accept custody.

In the recent decision of Temnorod v. Commissioner, T.C. Memo. 2025-127, the United States Tax Court addressed the tax treatment of payments made by an acquiring entity to settle the liabilities of a related party in bankruptcy. The case serves as a critical reminder to tax professionals regarding the hierarchy of the Internal Revenue Code (the Code)—specifically, that capitalization requirements under section 263 generally supersede deduction provisions under section 162.