#tax-compliance
Tax Compliance
Stay compliant with tax regulations and filing requirements
Drake Plastics v. IRS: What the Micro-Captive Listed-Transaction Ruling Means for 831(b) Owners
In April 2026, a Texas federal court vacated the IRS rule that automatically branded micro-captives with loss ratios under 30% as listed transactions — eliminating the $200,000-per-year penalty tier — while upholding the 60% transaction-of-interest disclosure requirement. Here is what 831(b) captive owners must still file, and why loss ratios now determine your entire compliance posture.
Edmund Ha v. Commissioner: Why a Detailed Mileage Log Still Lost a $76,000 Deduction Fight
In Edmund Ha v. Commissioner (June 2026), the Tax Court allowed just $711.60 of $59,866 in claimed travel and meal deductions and denied a $16,325 vehicle deduction entirely, because Section 274(d) bars courts from estimating these expenses without contemporaneous records of amount, time, place, and business purpose — while the same taxpayer's $13,328 home office deduction survived under the ordinary Cohan rule.
Estate of Fields: Why a Deathbed Family Limited Partnership Failed the Section 2036 Test
In June 2026 the Fifth Circuit affirmed that an FLP formed one month before Anne Fields's death failed IRC Section 2036's bona fide sale exception, pulling $17 million back into her taxable estate, erasing a 36.25% valuation discount, and adding a 20% penalty — a blueprint of what sinks last-minute succession plans.
Georgia Cut Its Income Tax to 4.99% — But HB 463 Left the PTET Rate at 5.75%
Georgia's HB 463 cuts the flat income tax rate from 5.19% to 4.99% for tax years starting January 1, 2026, with conditional annual cuts toward 3.99% — but the pass-through entity tax (PTET) rate stays at 5.75%, so S-corp and partnership owners who made the election should rerun the math against their SALT cap savings.
Gravenstein 116 v. United States: Why Cannabis Businesses Can't Claim the Employee Retention Credit
The Court of Federal Claims dismissed Gravenstein 116, LLC's $322,016 Employee Retention Credit refund claim, holding that Section 280E bars cannabis businesses from refundable tax credits — refundability doesn't change what a credit legally is. Here's what the ruling means for dispensaries with pending or paid ERC claims, and why the 2026 Schedule III move doesn't rescue them.
The IRS Sent a $121,000 Refund by Mistake — Then Gave Itself Ten Years to Take It Back
In Hough Beck & Baird, Inc. v. Commissioner, 167 T.C. No. 2 (July 2026), the Tax Court held that when an IRS calculation error zeroes out a correctly reported $121,003 employment tax liability and triggers a mistaken refund, the IRS can fix it with a supplemental assessment under IRC § 6204 — gaining a ten-year collection window instead of the two-year erroneous-refund suit deadline of § 7405.
Jones Bluff v. Commissioner: Why LLC Members Get No Seat at the Table in a BBA Partnership Audit
In Jones Bluff, LLC v. Commissioner (166 T.C. No. 6, March 2026), the Tax Court dismissed a Fifth Amendment due-process challenge to the BBA centralized partnership audit regime on standing and ripeness grounds — confirming that individual partners get no notice or hearing rights during an entity-level audit. Here's how the regime works, who qualifies for the small-partnership election-out, and what LLC members should fix in their operating agreements before an audit starts.
Jones Bluff v. Commissioner: What the BBA Partnership Audit Ruling Means for Your Multi-Member LLC
In Jones Bluff, LLC v. Commissioner (166 T.C. No. 6, March 2026), the U.S. Tax Court rejected a due process challenge to the BBA centralized partnership audit regime, ruling partnerships lack standing to assert individual partners' rights. Here's what multi-member LLCs should do — from vetting the partnership representative to the 45-day push-out election and electing out of BBA.
Keysight v. United States: What the First Major Post-Chevron GILTI Ruling Means for Businesses with Foreign Subsidiaries
On July 2, 2026, the U.S. Court of Federal Claims invalidated Treasury Reg. 1.951A-2(c)(5) in Keysight Technologies v. United States, holding that Treasury exceeded its authority under Section 7805(a) — the first major tax-regulation strike-down since Loper Bright ended Chevron deference. Here's what U.S. owners of foreign corporations should know about open tax years, protective refund claims, and the coming NCTI regime.
LaRosa v. Commissioner: The Fourth Circuit Opens Innocent Spouse Relief to Erroneous Refunds
In LaRosa v. Commissioner, the Fourth Circuit rejected the Tax Court's rebate/nonrebate distinction and held that an unrepaid erroneous refund counts as "unpaid tax" under IRC Section 6015(f) — meaning taxpayers can seek innocent spouse relief from refund clawbacks. Here is what the ruling means for anyone who signs a joint return.
She Claimed $3,900 in Gas on Under $40 of Receipts: What a Tax Court Loss Teaches Every Side Hustler About Recordkeeping
In Lucas v. Commissioner (T.C. Memo. 2026-22), the Tax Court disallowed ~$30,000 in Schedule C losses from an informal caregiving side hustle — gas receipts under $40 against $3,900 claimed — and upheld 20% accuracy penalties. Here's the three-factor business test, the Cohan rule's hard limits, and the recordkeeping habits that would have changed the outcome.
Novak v. Commissioner: Yes, the IRS Can File a Tax Lien While Your Installment Agreement Is Pending
In Novak v. Commissioner (T.C. Memo. 2026-52), the Tax Court held the IRS may file a Notice of Federal Tax Lien while an installment agreement request is still pending — liens generally follow once a balance tops $10,000, streamlined plans end at $50,000, and taxpayers have 30 days to request a CDP hearing under IRC §6320.