In Smith v. Commissioner, T.C. Memo. 2026-25, the Tax Court reviewed the 2022 individual income tax return of Michael Smith. During the 2022 tax year, Mr. Smith held jobs with two separate employers, receiving wages totaling $16,535, which he appropriately reported on his Form 1040. However, claiming a disabling injury, Mr. Smith applied for Social Security Disability Insurance (SSDI) benefits in April 2022.

In November 2022, the Social Security Administration (SSA) issued an award letter granting retroactive benefits, and Mr. Smith subsequently received SSDI payments spanning from March 2022 through March 2023. In total, the SSA paid Mr. Smith $26,802 in SSDI benefits during the 2022 tax year, which the agency reported to the IRS on Form SSA-1099. Mr. Smith did not report any of these benefits on his 2022 Form 1040.

In April 2023, the SSA ceased making disability payments after discovering Mr. Smith had been employed since April 2022. The SSA informed him that he "should have never been entitled to receive [a] Social Security disability benefit". Consequently, Mr. Smith was required to reimburse the SSA. He repaid $31,116 in May 2023 and fulfilled the remaining balance via monthly payments across 2023 and 2024. Upon examining his 2022 return, the IRS determined that 85% of the 2022 SSDI benefits ($22,782) should have been included in his gross income pursuant to IRC Sec. 86(a), resulting in a tax deficiency of $5,454.

In a reviewed opinion that holds significant implications for partnerships subject to the centralized partnership audit regime, the United States Tax Court recently issued its decision in Jones Bluff, LLC v. Commissioner, 166 T.C. No. 6 (2026). At the heart of the litigation was whether a partnership possesses the legal standing to assert the Fifth Amendment due process rights of its individual members to invalidate a Notice of Final Partnership Adjustment (FPA).

The Department of the Treasury and the Internal Revenue Service recently issued final regulations (TD 10043) that amend the substantiation requirements under Section 274 of the Internal Revenue Code (IRC). Aimed primarily at governmental units and emergency responders, these regulations expand the definition of qualified nonpersonal use vehicles to include unmarked vehicles used by firefighters, rescue squads, and ambulance crews. For tax professionals, understanding the interaction between the statutory framework, the prior regulations, and these new modifications is critical for advising municipal clients and individual first responders on working condition fringe benefit exclusions and substantiation relief.

The administration and subsequent enforcement of the Employee Retention Credit (ERC) under 26 U.S.C. § 3134 has generated a wave of compliance challenges, processing delays, and subsequent litigation. For tax professionals advising clients on payroll tax refund claims, the recent unpublished memorandum decision from the Ninth Circuit Court of Appeals in ERC Today, LLC v. McInelly, No. 25-2642 (9th Cir. Mar. 17, 2026) offers critical insights into how the federal judiciary views standing and procedural challenges brought by third-party tax preparation firms against the Internal Revenue Service.

For tax professionals advising clients on the business interest deduction limitation, Revenue Procedure 2026-17 offers crucial administrative relief. Following the sweeping legislative changes introduced by the One, Big, Beautiful Bill Act (OBBBA), this procedure permits eligible taxpayers to withdraw previously irrevocable IRC § 163(j)(7) and § 1.163(j)-1(b)(15)(iii) elections. By doing so, taxpayers can capitalize on newly restored adjusted taxable income (ATI) add-backs and permanent 100 percent bonus depreciation. Below is a detailed technical review of the reasons for the procedure’s issuance, the IRS’s analysis of the law, the specific requirements for obtaining relief, and the mechanical procedures required for implementation.

For tax professionals managing clients with digital asset portfolios, the regulatory framework governing basis tracking has seen recent critical updates. Under IRC § 1012(c)(1), "in the case of the sale, exchange, or other disposition of a specified security on or after the applicable date, the conventions prescribed by regulations under that section must be applied on an account-by-account basis". To that end, final regulations issued in T.D. 10000 established ordering rules for determining which units of a digital asset are treated as sold when a taxpayer holds multiple units acquired at different times or prices.

For tax professionals advising clients on the deductibility of losses stemming from defunct investments and complex litigation, the Sixth Circuit’s recent unpublished opinion in Michael H. Shaut v. Commissioner, No. 25-1568, CA6 (March 12, 2026) serves as a critical reminder of the strict evidentiary burdens placed on taxpayers. In affirming the United States Tax Court’s decision, the appellate panel addressed the substantiation requirements for ordinary and necessary business expenses under Internal Revenue Code (IRC) § 162, theft losses under IRC § 165, and net operating loss (NOL) carryovers under IRC § 172.

For those representing corporate taxpayers, ensuring that a client’s corporate status is active and in good standing is a fundamental prerequisite before engaging in federal tax litigation. The United States Tax Court recently underscored this critical principle in Arbor Vita Corporation d.b.a. Hemediagnostics v. Commissioner, 166 T.C. No. 5 (March 16, 2026). In this opinion, Judge Landy addressed the interplay between state corporate suspension laws, federal rules of practice, and the doctrine of equitable tolling. Specifically, the Court provided a vital analysis of why California’s corporate revivor statutes cannot retroactively cure a defective Tax Court petition once the Internal Revenue Service (IRS) accrues a statute of limitations defense.

The Bipartisan Budget Act of 2015 (BBA) drastically altered the procedural landscape for partnership audits, replacing the TEFRA regime with a centralized partnership audit framework. As the IRS increases enforcement, particularly concerning syndicated conservation easements, tax professionals must understand how the Tax Court interprets the BBA’s strict notice requirements and the corresponding statute of limitations. The recent Tax Court opinion in Mammoth Cave Property, LLC v. Commissioner, 166 T.C. No. 4 (2026), provides critical guidance on how administrative defects in IRS notices impact the period of limitations on making adjustments under I.R.C. § 6235.

On March 5, 2026, the United States District Court for the Eastern District of Tennessee issued its memorandum opinion in CIC Services, LLC v. Internal Revenue Service, No. 3:25-cv-00146, ultimately upholding the Treasury Department and IRS’s Final Rule on micro-captive insurance reporting requirements. For tax professionals advising clients on the IRC § 831(b) election, this ruling represents a critical development in the compliance landscape, resolving a multi-year administrative law battle regarding the IRS’s authority to classify certain captive arrangements as listed transactions and transactions of interest.

The One, Big, Beautiful Bill Act of 2025 established a companion provision to the new Internal Revenue Code (IRC) Section 530A Trump Accounts by enacting IRC § 6434, the Trump Accounts Contribution Pilot Program. Under this program, the Secretary of the Treasury will make a one-time $1,000 contribution to the Trump Account of an eligible child.

The Treasury Department and the IRS have issued proposed regulations (REG-117002-25) outlining the procedural and definitional framework for making the pilot program election. For CPAs and EAs, understanding the mechanics of these rules is critical, as the regulations introduce novel tax administration concepts—such as the "special taxable year"—to effectuate the statutory intent.

The One, Big, Beautiful Bill Act of 2025 significantly altered the tax landscape for early childhood wealth building with the creation of Internal Revenue Code (IRC) Section 530A, introducing "Trump Accounts". Recently, the Treasury Department and the IRS issued proposed regulations (REG-117270-25) providing critical definitions and outlining the mechanics of electing to open an initial Trump account.

(Note: The legislation also enacted a related $1,000 contribution pilot program under IRC § 6434; however, the scope of this article is strictly limited to the foundational rules and definitions of the Trump Accounts themselves under IRC § 530A.  A separate article will discuss the proposed regulations related to the Trump Accounts that were issued at the same time as these regulations.)

In my 44 years of tax practice, I have witnessed numerous shifts in information reporting—from the early days of paper ledgers to the complex composite statements we see today. However, the introduction of digital asset reporting under IRC Section 6045 brings an entirely new challenge due to the staggering volume of transactions. To address this, the IRS and Treasury have issued proposed regulations (REG-105064-25) and Notice 2026-4, reshaping the rules for electronic furnishing of digital asset payee statements (Form 1099-DA).

For United States citizens and residents living and working abroad, I.R.C. § 911 provides a highly valuable tax benefit. Under I.R.C. § 911(a), a "qualified individual" may elect to exclude from gross income their foreign earned income and their housing cost amount. However, to meet the definition of a "qualified individual," a taxpayer must establish that their tax home is in a foreign country and must satisfy one of two stringent time-based tests under I.R.C. § 911(d)(1). They must either be a bona fide resident of a foreign country for an uninterrupted period that includes an entire taxable year, or they must be physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.

Under Internal Revenue Code (IRC) § 7345, the IRS is granted the statutory authority to certify a taxpayer as having a "seriously delinquent tax debt". Once the Secretary of the Treasury transmits this certification, the Secretary of State is mandated to take "action with respect to denial, revocation, or limitation of a passport". The recent United States District Court for the District of Rhode Island decision in United States v. Richard H. Hatch Jr., No. 1:22-cv-00332 (D.R.I. Mar. 2, 2026), highlights the rigid procedural boundaries taxpayers and their representatives face when attempting to challenge a passport revocation in the midst of an active federal tax collection suit.

In Kavan Shaban v. Commissioner of Internal Revenue, T.C. Memo. 2026-24, the taxpayer, Kavan Shaban, is a medical doctor who co-owns a group of family businesses, including Persona Doctors HQ, LLC (PersonaHQ). In 2007, Mr. Shaban hired his brother, Shevan, to serve as the business manager. Shevan’s responsibilities included managing payroll, filing tax returns, and paying payroll taxes. In 2019, Mr. Shaban discovered that Shevan had embezzled approximately $9 million from the family businesses, which included trust fund taxes that were meant to be paid to the Internal Revenue Service (IRS). After Mr. Shaban initiated a civil lawsuit in Maryland state court, Shevan admitted to the embezzlement, acknowledged filing false tax returns, and took sole responsibility for the nonpayment of the trust fund taxes.

Pursuant to I.R.C. § 6672(a), the IRS determined that Mr. Shaban was a responsible person and assessed Trust Fund Recovery Penalties (TFRPs) against him for the periods ending September 30, 2018, June 30, 2019, and December 31, 2019. The TFRPs were officially assessed on September 15, 2023, following an unsuccessful protest by Mr. Shaban’s representative, who failed to timely respond to IRS document requests. To collect the unpaid TFRPs, the IRS issued a Notice of Intent to Levy and a Notice of Federal Tax Lien Filing in November 2023. Mr. Shaban did not request a Collection Due Process (CDP) hearing in response to either notice.

Because the TFRP liabilities remained unpaid, the IRS certified Mr. Shaban to the Department of State as an individual with a "seriously delinquent tax debt" pursuant to I.R.C. § 7345(a). After a temporary reversal due to a submitted Offer in Compromise (OIC) that was subsequently rejected, the IRS issued a Notice of Certification of Your Seriously Delinquent Federal Tax Debt to the U.S. Department of State in March 2025, when Mr. Shaban’s debt totaled $147,274.

For tax professionals advising clients on the acquisition or leasing of business vehicles, Revenue Procedure 2026-15 is the essential annual guidance that updates depreciation limits and lease inclusion amounts. According to the guidance, "This revenue procedure provides: (1) two tables of limitations on depreciation deductions for owners of passenger automobiles placed in service by the taxpayer during calendar year 2026; and (2) a table of dollar amounts that must be used to determine income inclusions by lessees of passenger automobiles with a lease term beginning in calendar year 2026".

For practitioners applying these rules, it is important to note that "the term ‘passenger automobiles’ includes trucks and vans".

For tax professionals advising clients on entity structuring and partnership contributions, the intersection of the "check-the-box" regulations and Subchapter K can present complex, and sometimes unforgiving, traps. The United States Tax Court recently addressed a novel question in this realm in Continental Grand Limited Partnership v. Commissioner, 166 T.C. No. 3 (2026), evaluating how a retroactive entity classification election impacts the basis of a self-issued promissory note contributed to a partnership.

This article details the factual background, the taxpayer’s arguments, the Tax Court’s technical analysis, and the ultimate conclusions that CPAs and EAs must be aware of when navigating entity classification elections and partnership basis rules.

The case of United States v. Monty Karst involves a lawsuit brought by the United States Government against Monty Karst and Todd Alan Templeton in the U.S. District Court for the District of Kansas. Decided by Judge Toby Crouse on February 27, 2026, the court granted summary judgment in favor of the Government to recover unpaid federal estate taxes.

On February 27, 2026, the United States Court of Appeals for the Second Circuit issued a pivotal ruling for tax professionals regarding the Internal Revenue Service’s (IRS) authority to assess foreign reporting penalties. In Safdieh v. Commissioner (No. 25-501-cv), the court held that the Commissioner of Internal Revenue may collect penalties under Internal Revenue Code (I.R.C.) § 6038(b) via administrative assessment. This decision officially aligns the Second Circuit with the D.C. Circuit in affirming the IRS’s administrative collection powers for this specific international information reporting penalty.