Parker's Latest Federal Tax Articles:
MARCH 2026
Proposed Regs Provide Guidance on Trump Accounts and Contribution Pilot Program.
"The IRS issued proposed regulations that provide guidance on the general requirements for Trump accounts, certain definitions relating to Trump accounts, making an election to open a Trump account, and rules for who is a responsible party for the initial Trump account once the account has been opened."
IRS Issues Annual Vehicle Depreciation and Lease Inclusion Amounts for 2026.
"The tables detailing these depreciation limitations and lessee inclusion amounts reflect the automobile price inflation adjustments required by Code Sec. 280F(d)(7) and include a $100 increase in the first tax year depreciation limitation deduction for passenger automobiles, to $20,300 from $20,200 in 2025."
Disregarded Entity's Basis in Promissory Notes from Parent Is Zero.
"The Tax Court held that, where a disregarded entity received a promissory note from its owner and then contributed that note to a newly formed partnership in exchange for an interest in that partnership, the note was treated as though it was contributed from the owner directly to the partnership and thus the owner has no basis in the note at the time of contribution."
Court Acquits CPA of Preparing False Tax Returns Claiming AMT Credits.
"The court held that the government failed to present evidence sufficient to sustain a conviction and granted Demba's motion. The court found that the government's entire case rested on Demba's failure to follow the Line 19 instruction and input a number that did not match Line 26 from the prior year. There was no doubt, the court said, that Demba did not follow this instruction ..."
Texas Cattle Ranch Was Operated For Profit Despite Significant Losses.
"The Tax Court held that the deductibility of a cattle ranch owner's farming losses was not limited by Code Sec. 183 because he engaged in the ranch activity for profit. After applying the nine-factor test in Reg. Sec. 1.183-2(b), the court concluded that..."
IRS Was Correct to Use Deficiency Procedures in Collecting Erroneous Refund.
"The Tax Court held that the erroneous portion of a refund that the IRS issued to a taxpayer was a rebate refund, and not a nonrebate refund as argued by the taxpayer, and thus could be collected from the taxpayer through deficiency procedures. The court found that both the IRS and the taxpayer were fundamentally wrong..."
Taxpayers' Software Development and Construction Activities Were Engaged in For Profit.
"The Tax Court held that a married couple's software development activities were engaged in for profit and therefore, Code Sec. 183 did not limit their business expense deductions for that activity."
Second Circuit Affirms Taxpayer's Part Ownership of S Corporation.
"The Second Circuit affirmed the Tax Court and held that a taxpayer who formed an S corporation with her husband, but later stopped receiving distributions from the company after divorcing him, was nevertheless liable for tax on capital gains and rental income realized by the S corporation."
IRS Announces Delayed Applicability Date for Future RMD Final Regulations.
"The IRS announced that it anticipates that certain portions of final regulations relating to required minimum distributions (RMDs) under Code Sec. 401(a)(9) will apply for the distribution calendar year that begins no earlier than 6 months after the date that final regulations are issued in the Federal Register."
FEBRUARY 2026
IRS Provides Interim Guidance on Bonus Depreciation for Qualified Production Property.
"The IRS issued a notice providing interim guidance on the special depreciation allowance for qualified production property under Code Sec. 168(n)... (1) definitions of qualified production property and qualified production activity, (2) how to determine the special depreciation allowance for qualified production property, (3) how and when an election to treat property as qualified production property is made, and (4) how the depreciation recapture rules apply to property that ceases to meet the requirements to be qualified production property."
Legal Representative Is Personally Liable for $1.9 Million of Insolvent Corp's Tax Debt.
"The court entered a judgment against Neuberger in the amount of $1,880,988. With respect to the government's request for a $3,330,664 assessment against Neuberger, the court found the government's assertion that "there is no grey area in this phase of the case" astonishing in light of the fact that the government failed to offer clear legal or evidentiary support for its position. The court also noted..."
Spouse With No Control Over Finances Wins Equitable Relief Under Sec. 6015(f).
"The court found that Dr. Zaheen did not have actual knowledge of the 401(k) withdrawal since she did not learn about the transaction until she received an IRS notice in 2021. However, the court concluded that Dr. Zaheen had reason to know of the withdrawal. The court noted that Dr. Zaheen is a well-educated person who nevertheless signed the joint 2019 return without reviewing it."
Tax Court Chides Attorney for Apparent AI-Generated Case Cites.
"Submitting a brief with fictitious caselaw, the court pointed out, is eligible for sanctions and a clear violation of the Federal Rules of Civil Procedure. However, in a footnote, the court said that it was not absolutely clear that Wagner used generative AI. The court concluded that "a bit of embarrassment" was sufficient for now, but it also noted that courts have begun to more seriously sanction lawyers who use AI as a shortcut in drafting."
Chief Counsel's Office Nixes Tax Strategy Using Charitable Donation of LLC Interests.
Poultry Processor Scores Partial Win on Research Credits in Tax Court.
Marijuana Business Is Prohibited from Claiming Employee Retention Credit.
Notice of Deficiency Was Required Before Assessing Excess Advance PTC Payment.
How to Handle Missing Forms W-2 and Forms 1099.
College Properly Reported Settlement Payment to Former Student on Form 1099.
Tax Court: Taxpayer Made a Bargain Sale, But At an Amount Less Than Deducted.
JANUARY 2026
Fifth Circuit Reverses Tax Court; Rejects Self-Employment Tax "Passive Investor" Rule.
IRS FAQs Provide Guidance On Deduction for Qualified Overtime Compensation.
Proposed Regs Reflect OBBBA Change to Backup Withholding on Third Party Payments.
Tax Court Rejects Executor's Attempt to Reduce Value of Estate.
IRS Issues Interim Guidance on OBBBA Amendments to Bonus Depreciation Deduction.
Second Circuit: Reckless Conduct Satisfies Willfulness Standard for FBAR Penalty.
Feb 2nd Deadline is Approaching for Forms W-2 and 1099. Practice Tips & Observations Included.
IRS Issues Proposed Regs on Car Loan Interest Deduction.
IRS Provides Estimated Tax Penalty Relief for Sales of Qualified Farmland Property.
Section 280E Expenses Disallowed in Calculating Reasonable Collection Potential.
Updated Premium Tax Credit FAQs Reflect OBBBA Changes and Expiring Provisions.
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