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Tax
Tax strategies, planning, and compliance for individuals and businesses
Dee v. Commissioner: When Is an IRS Audit Still 'Open' for a Whistleblower Award?
In Dee v. Commissioner (167 T.C. No. 1, July 2026) the Tax Court ruled an IRS examination stays legally "open" for whistleblower jurisdiction until formally closed under Rev. Proc. 2005-32 — yet denied Dee an award because auditors had independently found the same $2 million deficiency a month before his tip, which was built entirely from public SEC filings.
When a Deficit Restoration Obligation Isn't One: What CCA 202628009 Means for Partnership Loss and Liability Allocations
IRS Chief Counsel Advice CCA 202628009 (July 10, 2026) held that a demand-based deficit restoration obligation enforceable only by withholding future distributions is not unconditional, failing both the §1.704-1(b) economic-effect safe harbor and the §1.752-2(b) recourse-liability test — a fact pattern common in family LP boilerplate that can reallocate recourse debt and suspend previously deducted losses.
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.
Eiler v. Commissioner: When Winning an FCRA Lawsuit Leaves You With a Tax Bill Bigger Than Your Payout
In Eiler v. Commissioner (167 T.C. No. 3, July 14, 2026), the Tax Court held that $60,050 in contingency attorney's fees from a $64,750 FCRA settlement was the plaintiffs' gross income with no above-the-line deduction, producing an $11,423 deficiency against a $4,700 net recovery. Here's what the ruling means for anyone settling a lawsuit — and for employers who run background checks.
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.
IRS Raises the Business Mileage Rate to 76 Cents Mid-Year: How to Handle a Split-Rate 2026
Effective July 1, 2026, the IRS raised the standard business mileage rate from 72.5 to 76 cents per mile — only its second mid-year change since 2011. Here's how the split-rate year affects your deduction, what your mileage log must show, and when the new rate applies to reimbursements.
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.