#tax-compliance
Tax Compliance
Stay compliant with tax regulations and filing requirements
Paschall v. Commissioner: The Tax Court Rules Crypto Staking Rewards Are Taxable on Receipt
In June 2026 the U.S. Tax Court ruled in Paschall v. Commissioner that $33,354 in Cardano staking rewards were gross income the moment they were credited — rejecting the dominion-and-control, stock-dividend, and self-created-property arguments. Here is what the first merits decision on staking taxes means for how you record every reward.
Piton Holdings v. Commissioner: How a $41.6 Million Easement Deduction Shrank to $800,000 — and What Partnerships Should Learn
In Piton Holdings, LLC v. Commissioner (July 2026), the Tax Court cut a $41.6 million conservation easement deduction to $800,000, upheld the 40% gross valuation misstatement penalty, and voided $40.3 million in allocations to investors whose money arrived after the donation was recorded — two lessons on defensible appraisals and mid-year partner timing that apply to any LLC.
You Can Lose the Hobby-Loss Case and Still Beat the Penalty
In Schumacher v. Commissioner, the Tax Court ruled an 18-year money-losing quarter horse operation a hobby under Section 183 and disallowed $191,179 in deductions — yet waived the full $33,520 accuracy-related penalty because the couple reasonably relied on their enrolled agent of 20 years. How the reasonable-cause defense works, and what side-business owners should document.
A Tax Court Judge Just Told Treasury Its Own Regulation Doesn't Count
In Siemens Medical Solutions USA, Inc. v. Commissioner (167 T.C. No. 5, 2026), the Tax Court struck down Treasury's Extraordinary Disposition Rule, restoring a full $315 million Section 245A dividends-received deduction because the regulation added conditions absent from the statute's plain text. What the ruling, decided under the post-Loper Bright standard, means for any business relying on regulatory limits that outrun the underlying law.
Sirius Solutions v. Commissioner: The Fifth Circuit Just Rewrote Self-Employment Tax for Limited Partners
On January 16, 2026, the Fifth Circuit held in Sirius Solutions v. Commissioner that "limited partner" under IRC Section 1402(a)(13) means state-law limited partner status — rejecting the IRS's functional test and exempting limited partners' distributive shares from the 15.3% SECA tax. The ruling excludes LLC members and binds only Texas, Louisiana, and Mississippi, so refund claims and clean bookkeeping both hinge on the details.
How Sports Card and Collectibles Reselling Is Taxed: The 28% Rate, Cost Basis, and the IRS's Three Buckets
Collectibles like sports cards are taxed at a maximum 28% long-term capital gains rate under IRC Section 408(m) — higher than the 15–20% most stock investors pay. Whether you owe that rate, ordinary income rates up to 37%, or can deduct grading and shipping fees depends on whether the IRS sees you as a hobbyist, investor, or dealer. Here's how the classification works, what belongs in your cost basis, and why a 1099-K doesn't change what you owe.
Suvarna v. United States: Why the Tax Refund Deadline Accepts Almost No Excuses
In Suvarna v. United States (2026), the Court of Federal Claims dismissed a $53,521 refund claim filed six months late — even though the taxpayer spent those years as his dying mother's full-time caregiver. The case explains the three-year/two-year refund deadline, why the financial disability exception rarely applies, and how business owners can catch overpayments before the clock runs out.
Tooke v. Commissioner: Why the IRS Can Say No to Your 'Reasonable' Monthly Payment
In Tooke v. Commissioner (June 2026), the Tax Court upheld the IRS's rejection of an offer in compromise that fell below the taxpayer's Reasonable Collection Potential — disallowing a speculative $85,000 medical reserve, $1,000/month in duplicative tutoring costs, and $550/month in excess transportation. What the ruling teaches about documenting household budgets for OICs and partial-pay installment agreements.
United States v. Castro: What a Tax Preparer's 188-Month Sentence Means If Someone Else Signs Your Return
The Fifth Circuit affirmed a 188-month sentence for tax preparer John Anthony Castro, whose fabricated Schedule C and Schedule A deductions caused an estimated $15.2 million tax loss across 200-plus clients. Clients remain legally liable for falsified returns — here are six checks to vet a preparer, plus how Forms 14157 and 14157-A report misconduct.
Young America's Foundation v. IRS: What the Schedule B Donor-Disclosure Lawsuit Means for 501(c)(3)s
On July 13, 2026, Young America's Foundation sued the IRS to stop mandatory Schedule B donor disclosure for 501(c)(3)s, citing the Littlejohn data breach and the Supreme Court's exacting-scrutiny standard from Americans for Prosperity Foundation v. Bonta. Here is what the case argues, why the IRS's 2020 exemption for 501(c)(4)s matters, and how nonprofit bookkeepers should tighten donor records now.
Bookkeeping for Affiliate Income: Amazon Associates, LTK, and ShareASale
Amazon Associates pays roughly 60 days in arrears, ShareASale and Impact pay per merchant program rather than as a single payer, and the 2026 1099-NEC threshold rose from $600 to $2,000 — so most affiliate income now arrives with no tax form at all, making a monthly earned-basis reconciliation the only reliable way to track what you actually owe.
Bhutan's New 5% GST: What Small Businesses and Foreign Sellers Need to Know
On January 1, 2026, Bhutan replaced its nine-rate sales tax (0%–100%) with a flat 5% GST. Registration is mandatory above Nu 5 million (~$58,000) annual turnover — and the rules explicitly cover non-resident SaaS and digital sellers, with a 30-day registration window and a reverse-charge carve-out for verified B2B sales.