Tax practitioners are frequently tasked with assisting clients in claiming tax refunds. A critical aspect of this process is ensuring strict adherence to the statutory and regulatory requirements governing such claims, particularly the timeliness mandates established under 26 U.S.C. § 6511. The recent case of Hamilton v. United States, Case No. 24-cv-04491-BLF (N.D. Cal. Mar. 26, 2025), serves as a potent reminder of the jurisdictional pitfalls awaiting taxpayers who fail to meet these deadlines and the specific evidentiary burdens required for exceptions like financial disability tolling. This article delves into the details of this case, providing insights relevant to CPAs in tax practice.

This article delves into the recent United States Tax Court decision in Ranch Springs, LLC v. Commissioner, 164 T.C. No. 6 (2025), a syndicated conservation easement (SCE) case that serves as a critical reminder for tax practitioners regarding the valuation of donated property and the potential for substantial penalties arising from gross valuation misstatements. This case highlights the Tax Court’s scrutiny of aggressive valuation methodologies and underscores the importance of adhering to established principles of fair market value.

This article examines the recent Ninth Circuit Court of Appeals decision in Kristopher Dreyer v. United States of America, No. 24-906 (9th Cir. Mar. 28, 2025), offering a detailed analysis relevant to CPAs advising clients on trust fund recovery penalty (TFRP) matters. This case underscores the stringent standards for demonstrating a lack of willfulness in failing to pay over employee withholding taxes.

As a CPA specializing in tax, this Executive Order concerning the modernization of payments to and from the U.S. Federal Government has several implications for tax practitioners and our clients. This summary highlights the key aspects relevant to our practice.

Effective Date and General Mandate:

The Executive Order, issued on March 25, 2025, mandates a significant shift away from paper-based payments by the Federal Government. Effective September 30, 2025, the Secretary of the Treasury is directed to cease issuing paper checks for all Federal disbursements, including tax refunds. Similarly, the order states that all payments made to the Federal Government, including taxes, shall be processed electronically as soon as practicable and to the extent permitted by law. This transition aims to reduce costs, delays, and the risks of fraud associated with paper checks. The reliance on paper checks has historically led to a higher incidence of loss, theft, undeliverability, or alteration compared to electronic funds transfers (EFTs).

This article examines the Tax Court’s decision in Sherman Derell Smith v. Commissioner, T.C. Memo. 2025-24, which serves as a crucial reminder for tax practitioners regarding the substantiation requirements for depreciation deductions, particularly for property converted to income-producing use. The case highlights the taxpayer’s burden of proof and the specific rules governing the basis of converted property for depreciation purposes.

This interim final rule significantly revises the Beneficial Ownership Information (BOI) reporting requirements for domestic entities by exempting them entirely from the reporting obligations. Previously, the Corporate Transparency Act (CTA) and its implementing Reporting Rule required many corporations, limited liability companies, and other similar entities created by filing a document with a secretary of state or similar office (defined as "domestic reporting companies") to report BOI to the Financial Crimes Enforcement Network (FinCEN).

On March 20, 2025, the IRS revised its Employee Retention Credit (ERC) FAQs, providing critical guidance on income tax reporting. The updated section, 'Income tax and the ERC,' addresses scenarios where taxpayers failed to reduce prior-year wage deductions by the refunded ERC amount, either due to amended payroll tax returns or discrepancies between anticipated and actual refunds.

This article provides a detailed analysis of the recent case Express Scripts, Inc., and Express Scripts Holding Company v. United States of America, Case No. 4:21CV737 HEA, a decision from the United States District Court for the Eastern District of Missouri. This case addresses the applicability of the former Domestic Production Activities Deduction (DPAD) under 26 U.S.C. § 199 to a pharmacy benefit management company’s (PBM) claims adjudication software. 

The case specifically allows an insight into how a court applied the Supreme Court’s Loper Bright Enters. v. Raimondo, 144 S.Ct. 2244 (2024) decision to its analysis of the underlying IRS regulations.

This article provides a technical analysis of the recent Sixth Circuit Court of Appeals decision in Lonnie W. Hubbard v. Commissioner of Internal Revenue, offering insights for tax practitioners dealing with the complex intersection of criminal forfeiture and federal income tax law, particularly concerning individual retirement accounts (IRAs).

The United States Tax Court recently addressed the application of Internal Revenue Code (I.R.C.) § 7345, which governs the certification of seriously delinquent tax debts to the Secretary of State for potential passport denial, revocation, or limitation, in the case of Drew J. Pfirrman v. Commissioner, T.C. Memo. 2025-22. This memorandum opinion provides valuable insight for tax practitioners regarding the Tax Court’s role in reviewing these certifications and the substantive requirements for a "seriously delinquent tax debt" under the statute. This article will delve into the facts of the Pfirrman case, the taxpayer’s arguments for relief, the court’s analysis of the relevant law, its application of the law to the specific facts, and the ultimate conclusions reached by the Tax Court.

As CPAs in tax practice, we often encounter complex situations involving tax refunds and the intricacies of procedural requirements. The case of Carole S. Gauler, Personal Representative of the Estate of Paul L. Klein v. United States of America, Case No. 3:24-cv-00082-ART-CSD, heard in the United States District Court for the District of Nevada, provides a timely reminder of the critical importance of establishing proper jurisdiction in tax refund suits, particularly in the context of disruptive events like the COVID-19 pandemic. This article will delve into the facts of this case, the taxpayer’s arguments, the court’s analysis, and the key takeaways for tax practitioners.

This Chief Counsel Advice memorandum addresses the deductibility of theft losses under Internal Revenue Code (“Code”) § 165 for five hypothetical taxpayers (Taxpayers 1 through 5) who were victims of various scams in 2024. The memorandum aims to determine if these taxpayers sustained a theft loss deductible in 2024, considering the specific facts of each scenario and the relevant tax law.

The plaintiffs in both Hammill Manufacturing Co. v. United States and R.L. Morrissey & Associates, Inc. and American Ring Manufacturing, Inc. v. United States are making several claims regarding why their claims for refund under the Employee Retention Credit (ERC) should be granted. These claims can be broadly categorized into arguments for direct refund and challenges against IRS Notice 2021-20.

This case, Estate of Kalikow v. Commissioner of Internal Revenue, CA2, Case No. 23-7957, revolves around a dispute over the estate tax implications of a settlement payment to remedy the trustees’ failure to distribute all of the trust’s net income to Pearl Kalikow during her lifetime. The United States Court of Appeals for the Second Circuit affirmed the Tax Court’s judgment, holding that the settlement liability did not reduce the value of the trust’s assets included in Pearl’s estate.

In CF Headquarters Corporation v. Commissioner, 164 T.C. No. 5, filed March 4, 2025, the U.S. Tax Court addressed whether a corporation (CF Headquarters Corporation) had to include $3,107,500 in grant proceeds in its gross income for 2007 and whether it was liable for a 20% accuracy-related penalty under I.R.C. § 6662(a). The court, in Chief Judge Kerrigan’s opinion, held that the grant proceeds were includible in gross income but that the corporation was not liable for the accuracy-related penalty.

In Appeal of A. Markowski, the Office of Tax Appeals (OTA) considered A. Markowski's appeal of the Franchise Tax Board's (FTB) denial of his refund claim for the 2017 tax year. The key issues in this appeal were whether Markowski was provided proper notice of tax due, whether the FTB was required to obtain and review Markowski’s tax return before issuing its proposed assessment, and whether Markowski received taxable income from a California source in the 2017 tax year.

In Martino v. Commissioner, CA 11, Case No. 24-11438, March 3, 2025, the Eleventh Circuit Court of Appeals upheld the Tax Court’s decision to deny Joseph Martino’s claimed alimony deductions for the 2017 and 2018 tax years. The court found that payments made by Martino to his ex-wife, Cindy Roberts, did not meet the requirements for deductible alimony under Section 71 of the Internal Revenue Code.

The Treasury Department announced in a news release on March 2, 2025, that they will not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners concerning the Corporate Transparency Act.

According to the U.S. Department of the Treasury’s March 2, 2025, announcement, they will not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners for not complying with the Corporate Transparency Act. Furthermore, the Treasury Department intends to issue a proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only.

In United States of America v. Allen R. Davison, the U.S. District Court for the District of Kansas (Case No. 24-CV-02144, February 27, 2025) addressed the government’s action to reduce civil tax penalties to judgment against Allen R. Davison, a former CPA and attorney, related to his involvement with Cash Management Systems, Inc. (CMS) and its "tool plan" tax shelters. The court granted the government’s motion for summary judgment, preventing Davison from relitigating the penalties.

On February 27, 2025, FinCEN announced that it will not issue fines, penalties, or take enforcement actions against companies that fail to file or update Beneficial Ownership Information (BOI) reports by the current deadlines.