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September 8, 2026
News
The Tax Court has it's own set of rules with respect to rules of evidence, in this case expert witnesses. In Airbanb, Inc. & Subsidiaries (167 T.C. No. 9) the taxpayer and the IRS filed competing Motions for Discovery Protective Order Pursuant to Rule 103, which have since been amended. The IRS attached to his Motion for Discovery Protective Order, and to his Response to the taxpayer's Motion for Discovery Protective Order, Declarations by the IRS's chosen expert witness for the case. The taxpayer filed two Motions to Strike, requesting that the Court strike the Declarations primarily on the grounds that they are improper expert witness reports that do not meet the requirements of Tax Ct. R. Prac. & Proc. 143(g). The Court held the requirements of Tax Ct. R. Prac. & Proc. 143(g) do not apply to declarations submitted in support of a pretrial discovery motion and that the taxpayer's Motions to Strike will be denied.
Tip of the Day
Sales tax can depend on property accompanying service . . . If the cost of installing a new item of personal property is included in the price of the item, or even if broken out separately, the combined price is often subject to sales tax. On the other hand, the cost to just move or repair the item may not be subject to sales tax. For example, Madison Inc. designs, sells and installs a cubicle system for Chatham, LLC. The cost to design and install as well as the purchase price of the cubicles is subject to sales tax. If Madison simply designs and assembles existing cubicles at the customer's location, the cost is not subject to sales tax. Check the rules in your state.
September 3, 2026
News
When filing an estate tax return there can be a number of elections you can make, but there are limits on making the election. In Estate of Georgia M. Spenlinhauer, Deceased, Robert J. Spenlinhauer, Executor; Robert J. Spenlinhauer, Transferee of the Estate of Georgia M. Spenlinhauer the executor tried to make an election to value the gross estate at the alternate valuation date instead of the date of death if that produces a lower value for the estate. The election has to be made within one year of the due date of the return. In this case the return was not filed until some 12 years after the decedent's death. The estate also tried to claim a conservation easement exclusion. The Court allowed because both elections were untimely. Finally, the estate claimed there was a bona fide sale of property to the decedent's son for adequate consideration, a promissory note. The IRS claimed there was no intention of a debtor-creditor relationship because the note was to be canceled on the death of the decedent and, at her age at the time the note was created it had diminished value. The Court agreed with the IRS.
Tip of the Day
Executor's duties . . . It's the executor's responsibility to pay debts of the estate, including tax liabilities and any hidden debts, before distributing the assets. Knowing what debts to pay first is important if there's any chance the estate's assets may come up short. You may have to provide a legal notice that announces the death of the decedent. Failure to follow the proper procedures can leave the executor personally responsible.
September 2, 2026
News
The IRS announced (WA-2026-03) tax relief for individuals and businesses in Washington affected by wildfires that began on July 31, 2026. These taxpayers now have until Feb. 1, 2027, to file various federal individual and business tax returns and make tax payments. Individuals and households that reside or have a business in Chelan, Ferry, Okanogan, Spokane, Stevens, and Yakima Counties qualify for tax relief. This relief also extends to businesses and residents within the Confederated Tribes and Bands of the Yakama Nation, the Confederated Tribes of the Colville Reservation, and Spokane Tribe of Indians. The declaration permits the IRS to postpone certain tax-filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after July 31, 2026, and before Feb. 1, 2027, are granted additional time to file. As a result, affected individuals and businesses will have until Feb. 1, 2027, to file returns and pay any taxes that were originally due during this period. The Feb. 1, 2027, deadline applies to individuals who had a valid extension to file their 2025 individual income tax return. Because tax payments related to these 2025 returns were due on April 15, 2026, those payments are not eligible for this relief. Penalties on payroll and excise tax deposits due on or after July 31, 2026, and before Aug. 17, 2026, will be abated as long as the tax deposits are made by Aug. 17, 2026.The IRS has granted similar relief for individuals and households that reside or have a business in Douglas County and were affected by wildfires in Washington that began on July 31, 2026. The declaration permits the IRS to postpone certain tax-filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area. For more information, go to WA-2026-02.
Tip of the Day
Past performance is no guarantee of future results . . . That's what many investment ads say. And that's often true. A mutual fund can do well for years and then there's a change in managers and performance suffers. Many funds find success wanes as the fund gets larger and the small, rapidly growing companies that drove performance don't have the impact anymore. Larger funds can also limits flexibility. Funds that investment in private companies expect to make it big on one blockbuster that can carry the other five losers. But what if the next blockbuster proves elusive? Dig deeper than the 1 or 5-year performance number.
September 1, 2026
News
A gift isn't a gift for tax purposes if there are strings attached. In Carl B. Barney (T.C. Memo. 2025-133) the taxpayer owned a number of for-profit colleges through S corporations. At first the taxpayer attempted to sell the colleges but financial conditions in the market proved adverse at the time. The environment for for-profit colleges improved for several years then turned around because of changing federal regulations. The taxpayer, wanting to retire, decided to transfer the a public benefit corporation to secure a charitable contribution deduction. The taxpayer hired an appraiser who had experience in providing fairness opinions because of his prior employment, but he was not an accredited appraiser. A transfer was finally made with the taxpayer receiving notes with a fair market value of $267 million with the fair market value of the S corporations at more than that. The IRS argued that the taxpayer failed to relinquish dominion or control over the transferred S Corporations and thus no completed gift was made. The IRS cited that the taxpayer had the "power to direct the disposition or manner of enjoyment of the Colleges in numerous ways." First, he became the sole member of charitable organization after the Transaction, giving him sole authority to appoint and remove the board of directors. Second, he controlled the operations of the Colleges as a creditor, holding negative covenants under the Purchase Notes, including veto rights over large capital expenditures. The Court disagreed noting several factors. The Court found the transaction to be a bargain sale, part sale, part charitable contribution. The Court did reduce the appraisal and sustained the accuracy-related penalty for the gross valuation misstatement.
Tip of the Day
Read the fine print . . . While it might seem like a routine transaction, be sure to read the fine print. Or at least scan the bold headings. That's especially true if it looks like you're getting a special deal. One business owner signed up for a service that was cheaper than the competition, only to find it wasn't nearly as good as his previous service. When he went to cancel he discovered he signed up for a 3-year contract. The service was $2,500 a year and the penalty for early cancellation of the contract was $1,900. He paid the $1,900. A business may not have nearly the same protection as a consumer. And even for consumers your rights may be different from state to state.
August 31, 2026
News
The IRS announced (NE-2026-05) tax relief for individuals and businesses affected by severe storms in Nebraska that began on May 15, 2026. These taxpayers now have until Feb. 1, 2027, to file various federal individual and business tax returns and make tax payments. Individuals and households that reside or have a business in Buffalo, Fillmore, Gage, Jefferson, Nemaha, Richardson, Thayer, Thurston, and Howard counties qualify for tax relief. The declaration permits the IRS to postpone certain tax-filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after May 15, 2026, and before Feb. 1, 2027, are granted additional time to file. As a result, affected individuals and businesses will have until Feb. 1, 2027, to file returns and pay any taxes that were originally due during this period.
Tip of the Day
Online IRS accounts . . . The IRS is encouraging taxpayers (IR-2026-102) to explore the growing number of IRS.gov online tools that can help them quickly and securely take care of common tax tasks. IRS.gov offers secure, self-service options that can help taxpayers, businesses, and tax professionals get tax information and take action online. These tools can help users access tax records, check refund status, make payments, manage payment plans, view notices, request an Identity Protection PIN, and handle authorization requests. Taxpayers can use IRS Individual Online Account to securely access personal tax information and complete many tasks online. After signing in, taxpayers can:
Click on the link above for more information and links to other resources.
August 28, 2026
News
The IRS announced (NE-2026-07) tax relief for individuals and businesses in parts of Nebraska that were affected by wildfires that began on June 9, 2026. These taxpayers now have until Feb. 1, 2027, to file various federal individual and business tax returns and make tax payments. Following the disaster declaration issued by the State of Nebraska, individuals and households that reside or have business in Sioux County qualify for tax relief. The same relief will be available to any other counties added later to the disaster area. The current list of eligible localities is always available on the Tax relief in disaster situations page on IRS.gov. The declaration permits the IRS to postpone certain tax-filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after June 9, 2026, and before Feb. 1, 2027, are granted additional time to file.NE-2006-06 provides guidance on tax relief for individuals and businesses in parts of Nebraska that were affected by wildfires that began on May 16, 2026. These taxpayers now have until Feb. 1, 2027, to file various federal individual and business tax returns and make tax payments. Following the disaster declaration issued by the State of Nebraska, individuals and households that reside or have business in Dawes County qualify for tax relief. The declaration permits the IRS to postpone certain tax-filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after May 16, 2026, and before Feb. 1, 2027, are granted additional time to file.
Tip of the Day
Executor and S corporation . . . If you're the executor of an estate and you've received a decedent's K-1, you have the responsibility to notify the S corporation of the name and tax ID of the decedent's estate if the S corporation is part of the estate. The S corporation needs the information to properly determine if it's eligible to maintain S corporation status. If you, as a heir, receive an interest in an S corporation you must provide the S corporation with your name and taxpayer ID.
August 27, 2026
News
The IRS is reminding (IR-2026-99) information return filers who currently use the Filing Information Returns Electronically (FIRE) system to prepare now for the system's retirement and transition to the Information Returns Intake System (IRIS) before the 2027 filing season. After the November maintenance window, filers will no longer be able to submit information returns through FIRE. Current FIRE users must transition to IRIS to file tax year 2026 information returns during the 2027 filing season. The key dates to remember are:
Click on the link above for additional information and links to other resources.
Tip of the Day
Before you sign . . . Read your lease carefully. Make sure you've got an out should things not work out. One business owner thought there was plenty of parking for his business. When he signed he had over nine months to build out the space before he had to make his first payment. It turned out the tenant moving into the adjoining space used up much of the available spots forcing the business owner to apply for a variance from the town. Best estimate on getting the variance? Six months. Once construction starts it'll take another six months plus to complete the work and get a certificate of occupancy. The business owner is seriously considering canceling the lease and looking for other space. For many businesses, particularly startups, such a situation could be a disaster. Make sure you have an out in your lease and, of course do your homework on the location and town rules.
August 26, 2026
News
The IRS has announced (IR-2026-03) tax relief for individuals and businesses in parts of Nebraska that were affected by wildfires that began on March 12, 2026. These taxpayers now have until Feb. 1, 2027, to file various federal individual and business tax returns and make tax payments. Individuals and households that reside or have a business in Morrill, Garden, Arthur, Keith, Grant, Lincoln, Dawson, Frontier, Saunders, and Red Willow counties qualify for tax relief. The same relief will be available to any other counties added later to the disaster area. The declaration permits the IRS to postpone certain tax-filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after March 12, 2026, and before Feb. 1, 2027, are granted additional time to file.The Service also announced (IR-2026-04) tax relief for individuals and businesses affected by the Pressey Fire in central Nebraska that began on April 22, 2026. These taxpayers now have until Feb. 1, 2027, to file various federal individual and business tax returns and make tax payments. Individuals and households that reside or have a business in Custer County qualify for tax relief. The declaration permits the IRS to postpone certain tax-filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after April 22, 2026, and before Feb. 1, 2027, are granted additional time to file. As a result, affected individuals and businesses will have until Feb. 1, 2027, to file returns and pay any taxes that were originally due during this period.
Tip of the Day
Bonuses or raise? . . . They're usually not a direct substitute. In many situations you can't avoid paying regular raises to keep competitive with other employers. But bonuses are a way of compensating employees for a good year without becoming locked in to a higher wage structure which could negatively affect the business if there's a business reversal. Bonuses can vary with business conditions and can be eliminated in poor years.
August 25, 2026
News
The IRS has announced (IR-2026-98) that interest rates on over- and underpayments will remain the same for the fourth quarter of 2026. For individuals, the rate for overpayments and underpayments will be 7% per year, compounded daily.The Internal Revenue Service has issued proposed regulations on eligible investments for Trump Accounts, a new type of traditional IRA under the Working Families Tax Cuts. Funds in a Trump Account may only be invested in eligible investments during the growth period, which begins when the account beneficiary's initial Trump Account is established and ends on Dec. 31 of the calendar year in which the account beneficiary turns age 17. After the growth period, the eligible investment restrictions no longer apply. For Trump Accounts, an eligible investment generally is a mutual fund or exchange traded fund that tracks an equity index of primarily U.S. companies, such as the S&P 500 index, does not use leverage, and has annual fees and expenses of no more than 0.1 percent of the balance of the investment in the fund. If an account beneficiary does not select an eligible investment offered by the trustee, funds in a Trump Account automatically will be invested during the growth period in an eligible investment selected by the trustee. The proposed regulations provide rules for determining whether an investment is an eligible investment and procedures for a trustee to ensure that funds are invested in an eligible investment. These regulations generally would apply to tax years beginning on or after Jan. 1, 2026. See also IR-2026-96 for more information and links to other resources.
Tip of the Day
The family business . . . Family businesses and closely held businesses in general have a special problem because infighting can occur at almost any time, but are far more likely when the business is under pressure. You don't want fights in the business destroying it. Many problems can be handled through a good organization of the business. Sometimes the answer is an LLC instead of a corporation. But the answer has to be tailored to the situation. Talk to a attorney who understands smaller businesses and the options available.
August 24, 2026
News
The IRS has announced corrections to the new releases announcing relief for taxpayers affected by disasters in certain areas. They include the West Virgina area (WV-2026-01) and Mississippi (MS-2026-03). The correction refers to the disaster extension to February 1, 2027 referenced in paragraph 6 of the notice, only applies to the quarterly payroll deadlines originally due on July 31, 2026, and November 2, 2026.
Tip of the Day
Make probate easier . . . Unless your estate is very simple you'll probably need a will, at least to create and executor. You can avoid problems by simplifying your estate. For example, make sure your will is up to date and bullet proof legally, make sure titles are available for vehicles, real estate, etc., make sure securities are in the name of your broker, not your own name, etc. Talk to your attorney or financial advisor for other issues.
August 21, 2026
News
NPRM REG-109082-25 contains proposed regulations that would amend existing regulations that require certain trusts to report all charitable contributions and amounts permanently set aside for a charitable purpose on Form 1041-A, U.S. Information Return Trust Accumulation of Charitable Amounts. The proposed regulations would remove the reporting requirement for these trusts with respect to taxable years in which the trust's only claimed charitable contribution deduction results from charitable contributions made by a passthrough entity in which the trust owns an interest. The proposed regulations would also modify the existing regulations to clarify that split-interest trusts satisfy their filing obligations by filing Form 5227, Split-Interest Trust Information Return, rather than Form 1041-A. The proposed regulations would affect certain trusts that are required to report all charitable contributions and amounts permanently set aside for a charitable purpose.REG-119882-25 contains proposed regulations that would provide that the refunded portion of certain refundable Federal income tax credits available to individuals is a "Federal public benefit" under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA). As a result, aliens who are not "qualified aliens" under PRWORA would be ineligible to receive the refunded portion of these refundable credits. These regulations would generally affect taxpayers claiming the following Federal income tax credits: the adoption tax credit, the American opportunity tax credit, the child tax credit, and the earned income credit. As required by PRWORA, this document also provides notice to the public and notifies recipients of proposed changes regarding eligibility for the refunded portion of such Federal income tax credits under PRWORA.
Tip of the Day
How much do you need to retire? . . . You might as well as how many engineers does it take to screw in a light bulb. How much you need will depend in part on how healthy you are (i.e., how long do you expect to live after retiring), what your nest egg will earn, and MOST importantly, how much you intend to spend. We've known couples who can easily live on $80,000 a year, even in an expensive state. We also know people who will be have to drastically change their life style to make it on $250,000 a year. There is no rule of thumb about how much you'll need.
August 20, 2026
News
The IRS has taken a number of taxpayers and partnerships claiming a deduction for a conservation easement to court winning a number of cases and settled a number out of court. These cases can be costly because specialists in valuation are usually required and the cases often take considerable time. In IR-2026-95 the IRS annnounced the establishment of an Office of Conservation Easements. The Office will centralize technical expertise and coordinate policy, enforcement, and case-resolution strategy across the IRS and with the Office of Chief Counsel. It will support engagement with taxpayers, practitioners, conservation and historic preservation organizations, and other stakeholders. The Office will also work with Treasury to evaluate administrative and legislative options that advance Congress's conservation and historic preservation objectives, promote consistent tax administration, and strengthen valuation integrity. As part of this transition, the IRS will conclude the current uniform settlement initiative effective today and will not issue any additional uniform settlement letters under the May 13 program. Any deadlines for accepting previously issued offers are withdrawn. Prior elections to participate in the May 13 settlement framework will remain in effect and will be processed in accordance with their terms.The IRS has announced (WV-2026-01) it has added the counties of Pleasants and Ritchie to the list of counties where individuals and businesses in West Virgina affected by severe storms, straight-line winds, tornadoes, flooding, landslides and mudslides that began on July 21, 2026 may secure tax relief. As a result at this time the complete list of counties qualifying includes Lewis, Pleasants, Ritchie, and Upshur. These taxpayers now have until Feb. 1, 2027, to file various federal individual and business tax returns and make tax payments. Click on the link above for more information.
Tip of the Day
Willful ignorance . . . There's a line between being unaware of some illegal activity and knowing that something is going on, but ignoring it on purpose. For example, you hire a firm to do tree work. You check the company's license before work begins. There's an accident and lawsuits fly. You've been accused of hiring an unlicensed contractor because the company's license was revoked two weeks before the work began. That's different than not inquiring about a contractor's license, and selecting the company because they put in a bid substantially below competitors. Willful ignorance can depend on your level of intelligence, what steps you took to insure the right result, etc. A classic example is a tax return where you get a big refund. The preparer reports your salary of $120,000, but not your husband's $80,000 salary. Taxes can be a complex field, but you're supposed to review the return and you should spot such an obvious error.
August 19, 2026
News
The IRS has announced (LA-2026-02) it has added East Feliciana parish to the list of parishes where individuals and businesses in the State of Louisiana affected by Tropical Storm Arthur that began on June 17, 2026 qualify for tax relief. These taxpayers now have until Nov. 2, 2026, to file various federal individual and business tax returns and make tax payments. The full list of parishes qualifying for relief are not Avoyelles, East Feliciana, Lafourche, Pointe Coupee, St. Landry, St. Tammany and Terrebonne.In an audit the Treasury Inspector General for Tax Administration (TIGTA) reviewed 44 taxpayer cases involving 49 seizures conducted by the IRS and found that Field Collection employees generally adhered to applicable laws, regulations, and procedures. However, of the 49 seizures that we reviewed, there were 8 real estate properties being used by someone other than the taxpayer (e.g., tenants) as their principal residence. The IRS also conducted seizures in three cases without following proper procedures that caused unnecessary taxpayer burden. In these cases, the errors were not identified by the respective group managers or during the pre-seizure review process. As a result of these undetected errors, the properties seized in these three cases were released to the taxpayers. The properties seized in the three cases were valued at nearly $377,000. For the full report go to www.tigta.gov/sites/default/files/reports/2026-08/2026300043fr.pdf
Tip of the Day
Don't net items . . . Don't simply net items on tax returns or financial statements. For example, gross income and refunds. While the result may be the same, but the appearance will be wrong. For example, in 2025 refunds were 1.2% of gross receipts. In 2026 while sales climbed, refunds were 2.1% of gross sales. If the sales and refunds were netted, a reader of your financials would not know that refunds were much higher in 2026. Given that information a reader might want to know the reason for the big increase in refunds. If in doubt ask your accountant.
August 18, 2026
News
In SIH Partners LLLP, Explorer Partner Corp., Tax Matters Partner (167 T.C. No. 8) the tax matters partner timely petitioned the Tax Court challenging the IRS's adjustments in a Notice of Final Partnership Administrative Adjustment regarding qualified dividend income (QDI), reclassified as ordinary dividend income, and corresponding foreign tax credits (FTC). The IRS principally contended that investment positions held by the partnership are substantially similar or related property as defined by Sec. 246(c)(4) and accompanying Treasury regulations. The Court held that the Substantial Overlap Test in Treas. Reg. Sec. 1.246-5(c)(1)(iii) has not been met; however, the Anti-Abuse Rule of Treas. Reg. Sec. 1.246-5(c)(1)(vi) is applicable, and therefore S is not entitled to QDI treatment under Sec. 1(h)(11)(B)(iii)(I) and 246(c). The Court also held the partnership had not satisfied all statutory requirements to qualify for the FTC.
Tip of the Day
Deceptive web search . . . You might think you can find what you're looking for with one of the popular search engines, but don't assume the first, second, or even third, hit on the list is the right one. Many companies pay to place high up in order to sell their product or service. Searching for information on a disease? The first five hits are likely to be ads for drugs or medical services. While the ads may contain good information, they could also be significantly biased. But there are worse situations. Want to pay a bill? Doing a search may lead you to a scam website that mimics the one where you can make a payment.
August 17, 2026
News
In order to claim certain child-related tax credits the dependent, among other requirements, has to reside in your abode for more than half of the tax year. In Ignacio Montes G and Alberto Yanex A (T.C. Memo. 2025-132) the taxpayers filed multiple federal income tax returns for the 2020 tax year, varying the dependents reported on those returns. Montes G filed his original Form 1040, U.S. Individual Income Tax Return, on or before April 15, 2021. It claims head of household filing status, and it lists C.C. (subsequently referred to as C.M.) as a nephew qualifying for a child tax credit and Y.S. (subsequently referred to as Y.R.) as a foster child qualifying for a credit for other dependents. An amended return by Montes G also claims head of household filing status, and it lists C.M. as a nephew qualifying for a child tax credit, Y.R. as a foster child qualifying for a credit for other dependents, and, additionally, E.P. as a nephew qualifying for a child tax credit. Yanez A also filed Form 1040 on or before April 15, 2021. It also claims head of household filing status, and it lists A.A.R. as a son qualifying for a child tax credit. In addition to their individual returns, Montes G and Yanez A prepared a return for the 2020 tax year claiming the married filing jointly filing status, dated May 5, 2022. The joint Form 1040 lists C.M. as a nephew qualifying for a child tax credit, Y.R. as a foster child qualifying for a credit for other dependents, and A.A.R. as "other," qualifying for a credit for other dependents. The Court noted the multiple different returns, conflicting testimony, no evidence of enrollment at the local school. The Court denied one of the claims for a qualifying dependent but allowed another.Tip of the Day
Sweat the small stuff . . . When you're under the gun, and desperately need help, which you won't get, there's a tendency to skip or put off the small stuff. Sometimes that can make sense, but think about what you're putting off first, it could cause you major headaches. One business owner wasn't checking his mail and didn't pay the insurance on his building. When he tried to reinstate the company looked at the building fresh and required him to abandon an in-ground oil tank and make upgrades to his fire suppression system, boiler and electrical. Let your worker's compensation insurance lapse? You could be in for some big penalties, depending on the state. Late with your employment tax deposits? One day late and you could get a 2% penalty. Doesn't sound like much until you annualize it. Sixteen days late and the penalty is 15%. Late renewing a service? You could be charged a higher price. Late canceling a service? You could be on the hook for another month. And late payments can affect your credit rating. The above applies to both your business and personal finances.
August 14, 2026
News
T.D. 10053 contains final regulations governing backup withholding on reportable payments with respect to third party network transactions. The final regulations reflect recent changes to the statutory law that affect the backup withholding requirements for third party settlement organizations who make payments in settlement of third party network transactions.The IRS announced (LA-2026-02) that East Feliciana parish has been added to the list of parishes where individuals and business can qualify for tax relief in the State of Louisiana affected by Tropical Storm Arthur that began on June 17, 2026. As a result the complete list of parishes that qualify for relief now include voyelles, East Feliciana, Lafourche, Pointe Coupee, St. Landry, St. Tammany and Terrebonne. Click on the link for more information and resources.
Tip of the Day
Vendor list . . . What could be one of the easiest and most common business scams is the phony vendor. Someone in accounting creates a corporation, it bills the company, and the company pays. While it's not necessary for the accounts payable clerk to be the one creating the corporation, that's usually the case. There should be a strict control over who can enter a new vendor in the system and a limit for payments to that vendor. And the each vendor addition should be approved by a surpervisor. Today it's pretty easy to check out a vendor before payment.
August 13, 2026
News
Notice 2026-49 provides guidance in accordance the SECURE 2.0 Act. Section II of this notice sets forth general background information on the rollover process. In section III of this notice, the IRS proposes a series of sample forms and proposed rollover procedures, attached as an Appendix to this notice, intended to comply with section 324 of the SECURE 2.0 Act. Section IV of this notice sets forth additional guidance under consideration by the IRS. Section V of this notice provides instructions on how to submit comments on this notice and any other aspect of the SECURE 2.0 Act.The Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) is issuing a final rule that permanently removes the requirement for U.S. companies and U.S. persons to report beneficial ownership information to FinCEN under the Corporate Transparency Act. The final rule` is effective on its publication in the Federal Register. FinCEN also announced that it will delete previously reported information by U.S. persons—now exempt from the reporting requirements—from the beneficial ownership information database. Under the final rule, foreign entities that are reporting companies will still be required to report beneficial ownership information for foreign individuals.
Tip of the Day
Make deposits remotely? . . . Many business make check deposits remotely using a bank supplied scanner or by taking a photo of the check. Many banks now require it of business depositors. To avoid problems you should either destroy completely or mutilate the deposited check to avoid confusion. But make sure the deposit has been accepted by the bank before doing so.
August 12, 2026
News
The IRS has issued proposed regulations (REG-101355-26) providing guidance to employers that choose to make contributions to Trump Accounts for employees or their dependents. The proposed regulations also clarify nondiscrimination requirements for employers offering Trump Account contribution programs and dependent care assistance programs. The proposed regulations outline requirements for employers that wish to maintain a Trump Account contribution program. A Trump Account contribution program generally must:
The proposed regulations also clarify how the nondiscrimination requirements apply to Trump Account contribution programs and dependent care assistance programs. In general, eligibility to participate in these programs and contributions and benefits under these programs must not discriminate in favor of highly compensated employees or their dependents. Click on the link above for the proposed regulations or go to IR-2026-90 for a short explanation and links to other resources.
Tip of the Day
Little things count . . . Whether your selling a product or a service, how the customer sees that service or product is important. One customer left a dealership with a new $50,000 car only to realize the gas tank was almost empty. Turned out it had two gallons in the tank. Another customer bought a new tool requiring batteries. After six months the battery door to the unit broke and couldn't be replaced. A patient was given a medical questionnaire that looked like a copy of a copy of a copy of a copy--all reproduced on a copier with low toner. And just because the defect doesn't affect the performance of the unit or service, it reflects poorly on the business. Perception counts for a lot.
August 11, 2026
News
The IRS announced (WV-2026-01) tax relief for individuals and businesses in West Virginia affected by severe storms, straight-line winds, tornadoes, flooding, landslides and mudslides that began on July 21, 2026. These taxpayers now have until Feb. 1, 2027, to file various federal individual and business tax returns and make tax payments. Following the disaster declaration issued by the FEMA, individuals and households that reside or have a business in Lewis and Upshur counties qualify for tax relief. The declaration permits the IRS to postpone certain tax-filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after Ju, 2026, and before Feb. 1, 2027, are granted additional time to file. As a result, affected individuals and businesses will have until Feb. 1, 2027, to file returns and pay any taxes that were originally due during this period. The Feb. 1, 2027, deadline applies to individuals who had a valid extension to file their 2025 individual income tax return. Because tax payments related to these 2025 returns were due on April 15, 2026, those payments are not eligible for this relief.
Tip of the Day
Full disclosure . . . Insurance companies are always looking for new ways to reduce their payments for claims. That applies to both auto and homeowners'. To avoid problems read that fine print you never looked at or discuss the policy with your agent. Failing to disclose an additional driver in your household, particularly a high-risk one, driving changes such as long commutes, registering and insuring the car in a rural area while the primary use is in an urban or suburban area, can result in a problem when you go to file a claim. For homeowners' insurance you should check the policy to see if you have to inform the insurer if the home will be vacant for more than a normal period of time (e.g., you're working out of the area), changes to the home such as an additional room, changing an egress, major electrical or plumbing work, storage of flammable material, etc.
August 10, 2026
News
Notice 2026-48 informs taxpayers that the IRS intends to propose regulations providing guidance with respect to Section 6433 of the IRS, as added by the Consolidated Appropriations Act, 2023 known as the SECURE 2.0 Act of 2022. For taxable years beginning after December 31, 2026, Section 6433 of the Code allows certain low- and moderate-income individuals who make qualified retirement savings contributions to receive matching contributions of up to $1,000 (Saver's Match contributions) paid by the Secretary of the Treasury to applicable retirement savings vehicles. Section II of this notice provides a brief overview of Saver's Match contributions, a description of Notice 2024-65, (requesting comments on Saver's Match contributions under section 103 of the SECURE 2.0 Act), and a brief summary of Executive Order No. 14403 (facilitating Saver's Match contributions). The Saver's Match will provide eligible taxpayers with a maximum 50% match on the first $2,000 of qualified retirement savings contributions made to an employer-sponsored retirement plan or IRA, up to $1,000 annually, and will be paid for eligible taxpayers starting in 2028, based on contributions made for the 2027 tax year. The program, enacted as part of the SECURE 2.0 Act, replaces the Saver’s Credit with respect to retirement savings contributions.
Tip of the Day
Have independent contractors? . . . Have you're much more than a one-man show it's likely one of your employees pays the independent contractors--either by check or in cash. Every so often you, or a trusted employee, should pay the workers, checking their ID and, if applicable, making sure there's a W-9 on file for them. It's too easy for someone to create a fictious employee and collect their pay. By spot checking you may catch or discourage fraud.
August 7, 2026
News
The IRS has updated FS-2026-13 with questions and answers about the new deduction for qualified overtime compensation. These supersede earlier FAQs that were posted in FS 2026-01 on Jan. 23, 2026. The updates are:
Tip of the Day
Amended state return? . . . States don't automatically follow federal tax law. Some do, but not always all provisions. And, in some cases, the federal changes have to be adopted by legislation. Keep that in mind when preparing your return. If you're amending your federal return, take a good look at your state return. It too many need to be amended.
August 6, 2026
News
Notice 2026-28, providing guidance on the employer credit for paid family and medical leave (PFML) under the Working Families Tax Cuts (WFTC). The WFTC makes permanent and expands eligibility and coverage for employers offering PFML benefits to employees. The Working Families Tax Cuts permanently expands the employer tax credit for paid family and medical leave, providing businesses, particularly small businesses, with greater incentives to offer up to 12 weeks of paid leave. Employees may use the leave to recover from a serious health condition or to care for certain family members with serious health conditions. The WFTC also makes several key improvements to the credit, including expanded eligibility, expanded coverage and state and local mandates.The IRS has announced (Announcement 2026-15) it intends to issue opinion letters for defined contribution qualified pre-approved plans that were updated for changes in plan qualification requirements listed in the 2023 Cumulative List in Notice 2024-3 and that were filed with the IRS during the fourth remedial amendment cycle (Cycle 4) under the remedial amendment cycle system for pre-approved plans established under Rev. Proc. 2023-37. The IRS expects to issue the letters on August 31, 2026, or as soon as possible thereafter. This announcement provides a deadline for when an employer intending to maintain a Cycle 4 defined contribution qualified pre-approved plan must adopt that plan. In addition, the announcement sets forth the period during which the IRS will accept an application for an individual determination letter from an adopting employer of a Cycle 4 defined contribution qualified pre-approved plan that is eligible to submit a determination letter request.
Tip of the Day
Consolidating debt? . . . Get good advice before doing so. If you can consolidate some high interest credit card debt with a lower debt using a secured loan either a home equity or a loan on a rental property the move can be worthwhile. And you'll plrobably be trading lower periodic payments for a longer loan life. There's a real danger in a debt consolidation loan that it'll free up credit card balances for additional purchases. That'll tend to put you right back in the same predicament, but with less olptions.
August 5, 2026
News
The Treasury Inspector General for Tax Administration did a review of the response by the IRS to Executive Order 14224, making English the official language. The IRS continue to provide non-English compliance materials, i.e., tax forms, instructions, letters, etc., to not impair tax collection. The Treasury Department made four additional recommendations that it believes are consistent with Executive Order 14224 and unlikely to undermine tax compliance. These include:
The IRS has updated each non-English language web page to include the banner and will continue to update documents during their normal revision cycles with a projected completion date of January 2027. The IRS has also shut down all non-English social media accounts. Efforts are also underway to remove references to prior executive orders on expanding multilingual services. For example, the IRS has updated sections of the Internal Revenue Manual to eliminate references for the previous executive order. The IRS will continue to review its products to ensure that references are updated.Additionally, the IRS has reduced the number of supported languages available for multilingual services from 20 languages to 7 languages--Spanish, Simplified Chinese, Traditional Chinese, Russian, Korean, Vietnamese, and Haitian Creole. However, not all services are available in each language. For the complete report, go to www.tigta.gov/sites/default/files/reports/2026-07/20264S0037fr.pdf
Tip of the Day
Phishing scams directed at tax professionals . . . The IRS and Security Summit partners today warned tax professionals to watch for phishing emails and other schemes designed to steal sensitive taxpayer data. Among the most common threats facing tax pros are phishing and related scams. These scams are designed to trick recipients into disclosing personal information such as passwords, bank account numbers, credit card numbers, or Social Security numbers. The scams include phishing/smishing, spear phishing, clone phishing, whaling, and new client scam. For more information and tips on security protection go to IR-2026-85.
August 4, 2026
News
The IRS has issued proposed regulations (REG-115145-25)that relate to allocating foreign taxes of foreign corporations affected by the repeal of the one-month deferral election and to the disallowance of foreign tax credits on certain distributions of previously taxed earnings and profits. The proposed regulations would affect taxpayers that operate in foreign countries through certain foreign corporations and taxpayers that claim the foreign tax credit.Tip of the Day
Estimated tax penalty . . . Underpay estimated tax and keep the money for the business? Or investment? It may not make sense. If you're underpaid the interest rate is 7% and that interest is really a penalty and nondeductible. On the other hand, interest income of more than 5% is currently hard to come by and is taxable. The nondeductible interest versus the taxable interest income widens the disadvantage of paying interest on underpayments. How wide depends on your tax rate. The higher the rate the wider the spread.
August 3, 2026
News
The IRS has announced (LA-2026-02) announced the addition of Lafourche and Pointe Coupee parishes to those in Louisiana that qualify for tax relief for individuals and businesses in the State of Louisiana affected by Tropical Storm Arthur that began on June 17, 2026. These taxpayers now have until Nov. 2, 2026, to file various federal individual and business tax returns and make tax payments. As a result Avoyelles, Lafourche, Pointe Coupee, St. Landry, St. Tammany and Terrebonne parishes qualify for tax relief.
July 31, 2026
News
The IRS is required to report improper payments (e.g., Earned Income Credit errors) under the Payment Integrity Information Act. In an audit, the Treasury Inspector General for Tax Administration found that for FY 2025, the IRS did not comply with all PIIA requirements because it did not reduce the improper payment rate to less than 10 percent for the 4 high-risk refundable tax credit programs. Additionally, the IRS's overall improper payment rate increased from 21.9 percent in FY 2024 to 26.5 percent in FY 2025. For the IRS to effectively reduce improper payment rates and prevent financial loss to the government, it would need to prevent refunds from being issued during return processing. The IRS runs various automated checks on a tax return before paying a refund, but it has limited ability and information to timely verify taxpayer eligibility. For example, the IRS reported that from FYs 2023 through 2025, it used math error authority to reduce total claims by approximately 2 percent ($7.6 billion), adjusting claims from $330.5 billion to approximately $322.8 billion. To read the complete report, go to www.oversight.gov/sites/default/files/documents/reports/2026-07/2026400039fr.pdf.
Tip of the Day
Review supplier connections . . . It's not just technology that's changing rapidly. It wasn't that long ago that just in time inventories became all the rage. By keeping your inventory at a minimum and depending on rapid delivery you could improve cash flow. But many suppliers have merged and both them and others have consolidated manufacturing facilities. That may be cost efficient for the supplier, but what if there's a natural disaster at the plant? Or there's bad weather on the roads? If you don't have a backup supplier stock more inventory.
July 30, 2026
News
In taxes, sometimes what should be simple isn't. Is that child a dependent or not? The question is important because it can affect several areas of your return. It can depend on a numbesr of factors and being divorced definitely complicates the issue. In Ignacio Montes G. and Alberto Yanez A. (T.C. Memo. 22025-132) the IRS denied the married couple tax credits for a child, claiming the taxpayers could not prove the dependent lived with the taxpayer for over half the year. The Court noted the questioned credibility of the taxpayer, and a lack of documentation showing the children lived with the taxpayer.
Tip of the Day
Reconstructing lost records . . With tornadoes, wildfires and flooding around the country, there's a chance your tax and business records may be partially or wholly destroyed, despite your best efforts. If you can show the IRS or court that your records were in the disaster area you're sure to get sympathy as well as some leeway. Nonetheless, you can't just say they were lost in the flood and expect to be believed. You're expected to take steps to reconstruct your records. That includes requesting bank and credit card statements from the financial institutions, invoices from vendors, etc. If you paid by credit card or check you should be able to secure the original invoice at many stores. Paid cash at the gas pumps? No way you'll recover those. Often the IRS and courts will accept less documentation than they would under other circumstances. And you may be able to use a back door approach. Your mechanic provided oil change receipts that show the car mileage. The court may estimate the amount of gas used based on a prior year's documentation and use an average cost per gallon. Chances are the 80-20 rule will apply. You should be able to alternatively document 80% of the expenses fairly easily (though time consuming). The other 20% could be extremely difficult. The IRS and court may give you a significant part of that 20%. Talk to your accountant and tax advisor on other tips. But the best approach is to convert hard copies to digital formate and store the backup in a safe place or upload to the cloud. Scanning paper to create files is now fast and easy.
July 29, 2026
News
HBM Holdings Company (167 T.C. No. 6) is the parent of a consolidated group. Under Section 381, the taxpayer succeeded in a deemed liquidation under Sec. 332 occurring on June 30, 2018, to net operating loss (NOL) carryovers of DRE, an entity now disregarded as separate from the taxpayer. The consolidated group was formed on July 1, 2018. The taxpayer had no separate basis taxable income for its short tax year ending December 31, 2018, through the 2021 tax year. On returns for the short tax year and the 2020 and 2021 tax years, the consolidated group claimed consolidated NOL (CNOL) deductions on the basis of the DRE NOL carryovers. The parties filed Cross-Motions for Partial Summary Judgment concerning whether the CNOL deductions were allowed. The Court held DRE is a predecessor to the taxpayer within the meaning of Reg. SEc. 1.1502-1(f)(4), notwithstanding that the the taxpayer consolidated group did not exist at the time of DRE's deemed liquidation. The Court also held that Reg. Sec. 1.1502-1(f)(2)(i) does not apply to treat DRE's separate return years as not separate return limitation years (SRLY) and the original members of the taxpayer consolidated group do not constitute an SRLY subgroup within the meaning of Reg. Sec. 1.1502-1(f)(2)(i). Finally, the Court held the taxpayer consolidated group is not entitled to CNOL deductions for the 2018, 2020, and 2021 tax years on the basis of the DRE NOL carryovers.
Tip of the Day
Avoiding fraud . . . The recommended way of reducing the possibility of fraud is through segregation of duties in the accounting area. That means you shouldn't have the same person open the mail, make up the deposit and post the the receipts. But in a small business you may be lucky to have more than one person working in the accounting area. You may be able to have some employees do double duty. For example, a receptionist can open the mail and make a deposit ticket for the checks. You can train anyone to do a monthly bank reconciliation. Segregation of duties can be replaced in part by a responsible party doing a check. Printing out some reports from accounting software can allow someone in management to quickly spot growing accounts payable or receivable. Check with your accountant for other ideas.
July 28, 2026
News
You may be able to secure a deduction for a bad debt, but the debt has to be bona fide. In Mark L. Fussell (T.C. Memo. 2025-131) the Court examined the factors that support a bona fide debt and found the debts did not meet the test. The Court noted that for some of the debt no loan agreement existed and there was no documentation to support the fact that the debtor deposited the checks advanced for the debt. The Court noted that no bona fide debt existed. But it went on to say that assuming arguendo that the taxpayer could prove the purported loans were bona fide debts, it is unclear when those debts would have become worthless. A deduction can be taken on in the year the debt becomes worthless. The debtor functionally dissolved in 2008, such that worthlessness may potentially be considered to have occurred then. Furthermore, the debtor's 2014 notice of dissolution indicated that it had dissolved in 2013 and that it had no cash at the time of the notice, suggesting that worthlessness could potentially have occurred in 2013 or 2014. So in any event the taxpayer failed to establish in which year the purported loans became worthless. The taxpayer also argued that the IRS allowed a bad debt deduction on an amended return. However, the Court noted that processing of an amended return does not necessarily indicate IRS agreement with it any more than does processing of an original return. Furthermore, each tax year stands alone and must be separately considered.
Tip of the Day
Treasury bonds . . . Actually, there are treasury bills, notes, and bonds. Bills are short-term investments, no longer than a year. Notes have maturities as long as 10 years and everything over that are called bonds. While the risk of default is very low (most people consider it nonexistent), there is a market risk. That is, the market price can increase or decrease depending on the market interest rates. That risk is low if you can hold to maturity. By buying notes and bonds with varying maturities you can also reduce the market risk.
July 27, 2026
News
You may be able to get some immediate relief from paying your outstanding tax liability by going to a collection due process hearing (or CDP). But this isn't a "get out of jail free card". The IRS officer evaluates the situation and can allow an installment agreement or some other relief, but he can also find you have sufficient assets to pay in full. In Mission Organic Center, Inc. (T.C. Memo. 2025-130) the company claimed financial hardship and that it would like a collection alternative. The company asked the IRS to put the debt into currently-not-collectible status or grant the OIC that would cover all years. The Court noted the Appeals officer again denied the company's plea for an OIC. The notice of determination that she issued was, however, quite unlike the first two (there were earlier cases). There are blatant mistakes in it, as she incorrectly stated that Mission's attorney had asked for an installment agreement, and not just an OIC or currently-not-collectible status. But it's the reasoning used that separates this notice from the others. She first determined that the company could not challenge its tax liability for 2021 because Section 280E "disallows all expenses related to the operation of a medical marijuana dispensary deemed legal under State but not Federal law." She then added that the company didn't qualify for any collection alternative because it hadn't submitted the requisite financial information necessary to facilitate a determination of your ability to pay. She also noted that the comapny was not current with its estimated-tax payments. The Court found that the proper financial records were in the administrative record, leading the Court to doubt the veracity of the case-activity record's statement. The Court concluded the Appeals Officer abused here discretion in sustaining the IRS's determination to collect the tax debt when she did not address the arguments the company actually made.
Tip of the Day
Filing frequency . . . Many states have different frequency requirements for filing sales taxes, employment taxes, and some other taxes. Usually the frequency for filing sales tax depends on the dollar volume of your transactions. For example, in New York State you may be requred to file annually, quarterly, or monthly. For employment taxes filings requirements are based on the amount of total taxes withheld, that is, once you reach a certain threshold, you're required to file more frequently. Failure to meet the requirements can result in a penalty, so you should be aware of the requirements.
July 24, 2026
News
The Treasury Inspector General for Tax Administration (TIGTA) performed an audit to assess the taxpayer experience and accuracy of service provided at Taxpayer Assistance Centers (TAC) during the 2025 Filing Season. TIGTA visited Taxpayer Assistance Centers and found that employees did not provide correct tax law guidance during 28 of those visits (46 percent). At some visits TIGTA did not receive full assistance due to incomplete or inaccurate responses to tax law questions, denial of entry by security, or unexpected TAC closures. For the full report go to www.tigta.gov/sites/default/files/reports/2026-06/2026108034fr.pdf.
Tip of the Day
Sale of an easement . . . It's not unusual to grant an easement to a neighbor with a landlocked property. If, in the easement, you give up all your beneficial rights, that is really a sale of the piece of property. If, on the other hand, all you're granting the neighbor is the right to use the property when necessary or even some beneficial use, the amount you receive is a return of capital that just reduces your basis in the property.
July 23, 2026
News
You've got to make sure your bank account number is current with the IRS if you want to pay them electronically or get direct deposit of refunds. You should also retain your bank statements for four years. In Presley Powell and Pauline Green-powell, Plaintiffs (U.S. Court of Federal Claims) a couple claimed they had never received the First Recovery Rebate Credit during the Covid-19 pandemic. The First Recovery Rebate Credit is a refundable credit allowed to eligible individuals who did not receive an advanced refund of the $1,200 First Stimulus/Economic Impact Payment. The IRS subpoedaed bank records that showed $1,200 payments. In addition the Treasury Check Information System (TCIS), which contains information about payments issued by the IRS, shows that a payment for Mr. Powell was processed and directed to Mr. Pessoa's BOA Account on April 15, 2020. The Court noted the record developed through jurisdictional discovery was sufficient to demonstrate that the IRS issued the $1,200 payment. The Court held that it lacked subject matter jurisdiction and dismissed the case.
Tip of the Day
IP PIN . . . This is one way taxpayers can protect themselves from identity theft. There's a lot of juicy information on your tax return (which is one reason you should use a trusted preparer). Anyone with a Social Security number or an Individual Taxpayer Identification Number can request a free IP PIN. It’s a unique six-digit number known only to the taxpayer and the IRS. It helps verify a taxpayer's identity when they file a federal tax return. It also protects the taxpayer's account, even if they aren't required to file a return. A new IP PIN is issued each year for added security. The quickest and easiest way to request an IP PIN is through an IRS Individual Account. For more information go to Identity Protection PINs.
July 22, 2026
News
Rev. Proc. 2026-26 provides indexing adjustments to the applicable percentage table (Applicable Percentage Table) in Sec. 36B(b)(3)(A)(i) of the Code for taxable years beginning in calendar year 2027. This table is used to calculate an individual's premium tax credit under Sec. 36B. This revenue procedure also provides the indexing adjustment for the required contribution percentage (Required Contribution Percentage) in Sec. 36B(c)(2)(C)(i)(II) for plan years beginning in calendar year 2027. This percentage is used to determine whether an individual is eligible for affordable employer-sponsored minimum essential coverage under Sec. 36B.The IRS has updated the IRS Collection Financial Standards for use in calculating repayment of delinquent taxes. These Standards are effective on June 29, 2026, for purposes of federal tax administration only. Collection financial standards are used to help determine a taxpayer's ability to pay a delinquent tax liability. Allowable living expenses include those expenses that meet the necessary expense test. The necessary expense test is defined as expenses that are necessary to provide for a taxpayer's (and his or her family's) health and welfare and/or production of income. National standards for food, clothing and other items apply nationwide. Taxpayers are allowed the total National Standards amount monthly for their family size, without questioning the amount actually spent. Clink on the link above for more information and links to other resources.
Tip of the Day
Inherited IRAs with nondeductible contributions . . . You have basis in ondeductible contributions. That means your original contributions are not taxed a second time. If you inherit a traditional IRA from a person who had basis in the IRA because of nondeductible contributions, that basis remains with the IRA. Unless you are the decedent's spouse and choose to treat the IRA as your own, you can't combine this basis with any basis you have in your own traditional IRA(s) or any basis in traditional IRA(s) you inherited from other decedents. If you take distributions from both an inherited IRA and your IRA, and each has basis, you must complete separate Forms 8606 to determine the taxable and nontaxable portions of those distributions.
July 21, 2026
News
The IRS announced (LA-2026-02) tax relief for individuals and businesses in the State of Louisiana affected by Tropical Storm Arthur that began on June 17, 2026. These taxpayers now have until Nov. 2, 2026, to file various federal individual and business tax returns and make tax payments. Following the disaster declaration issued by the FEMA, individuals and households that reside or have a business in Avoyelles, St. Landry, St. Tammany and Terrebonne parishes qualify for tax relief. The declaration permits the IRS to postpone certain tax-filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after June 17, 2026, and before Nov. 2, 2026, are granted additional time to file. As a result, affected individuals and businesses will have until Nov. 2, 2026, to file returns and pay any taxes that were originally due during this period. The Nov. 2, 2026, deadline applies to individuals who had a valid extension to file their 2025 individual income tax return. Because tax payments related to these 2025 returns were due on April 15, 2026, those payments are not eligible for this relief. Penalties on payroll and excise tax deposits due on or after June 17, 2026, and before July 2, 2026, will be abated as long as the tax deposits are made by July 2, 2026. The Nov 2, 2026, deadline also applies to affected quarterly payroll and certain excise tax returns normally due on July 31, 2026. If an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original filing, payment or deposit due date that falls within the postponement period, the taxpayer should call the telephone number on the notice to have the IRS abate the penalty.
Tip of the Day
Checking account for your small business . . . You're starting a small business, possibly along with your regular job and decide to skip getting a checking account. Or you just don't think it's important. But it is. If the business loses money and you're audited by the IRS the agent may claim the activity is a hobby and deny the loss. Not having a checking account will be a strike against you. It won't be fatal by itself, but chances are other factors will go against you and a separate checking account could help you rebut the claim. If you've set up a separate entity such as an LLC or S corporation, a separate account will help you avoid personal liability for the entity's debts or actions. That's all not to mention the recordkeeping benefits.
July 20, 2026
News
The IRS continues to watch charitable contributions of conservation easements very closely because there has been substantial abuse in the area. In Piton Holdings, LLC, David L. Hall, Partnership Representative (167 T.C. No. 4) the taxpayer was an LLC that is treated as a partnership for federal tax purposes. The taxpayer claimed a charitable contribution deductions under Sec. 170 for its donations of a conservation easement and a fee simple interest in 2018. The IRS sent the taxpayer a Notice of Final Partnership Adjustment disallowing the charitable contribution deductions and determining penalties. The partnership allocated its claimed noncash charitable contribution deductions to four members. The IRS contended that these four members did not reflect the partnership's membership at the time of the charitable contributions. The Court held the before value of the property was $1,440,000 or $3,800 per acre as determined by the IRS's expert using the comparable property sales method. Subtracting the property's stipulated after value of $640,000 from the before value, the value of the easement was $800,000. The Court also held the partnership improperly allocated its claimed noncash charitable contribution deductions and because the claimed value of the easement exceeded the correct value by over 200%, the partnership is liable for a gross valuation misstatement penalty under Sec. 6662(h). The Court finally held the disclosure exception to the penalty does not appy to the Sec. 6662(e) substantial valuation misstatement penalty nor to the Sec. 6662(h) gross valuation misstatement penalty.
Tip of the Day
Use caution with competitors . . . Your company is still tiny but making a name for itself. You've got a great idea that is spot on. You're approached by Mega Inc. about a potential deal. Flattered, and thinking they might want to buy you out so you and your partner can retire at 25, you discuss some of your methods and ideas. A few months later you find you've just created your biggest competitor. It's happened--and more than once. If they're serious about a buyout or investment, get it in writing. You'll need an attorney qualified in the field to draft the documents and advise you. This is not the time to go online for a DIY approach. And make sure all employees who have inside knowledge sign nondisclosure and noncompete agreements.
July 17, 2026
News
The IRS has issued final regulations (T.D. 10052) providing guidance on the application of the transfer for valuable consideration rules and associated information reporting requirements for reportable policy sales of interests in life insurance contracts to exchanges of life insurance contracts qualifying for nonrecognition of gain or loss and certain acquisitions of interests in life insurance contracts in transactions that qualify as corporate reorganizations. The final regulations affect parties involved in these life insurance contract transactions, including with respect to payments of reportable death benefits. The final regulations follow the proposed regulations with minor changes.
Tip of the Day
IRS issues AI guidance . . . Artificial intelligence can be helpful but it can also be detrimental if you aren't careful. The IRS has issued Introductory Guidelines for Responsible AI Use in Federal Tax Practice for tax practitioners. The webpage warns about the dangers of generative AI (GAI) and the requirement to review any documents created with GAI and has a general discussion of the use of AI in tax practice.
July 16, 2026
News
The IRS has announced (MI-2026-02) tax relief for individuals and businesses in the State of Michigan affected by severe storms, tornadoes, and flooding that began on April 10, 2026. These taxpayers now have until Nov. 2, 2026, to file various federal individual and business tax returns and make tax payments. Following the disaster declaration issued by the FEMA, individuals and households that reside or have a business in Alcona, Allegan, Alpena, Antrim, Barry, Benzie, Charlevoix, Cheboygan, Crawford, Eaton, Emmet, Grand Traverse, Gratiot, Iosco, Iron, Kalamazoo, Kalkaska, Lake, Manistee, Marquette, Mecosta, Menominee, Missaukee, Montcalm, Montmorency, Muskegon, Newaygo, Oceana, Ogemaw, Osceola, Oscoda, Presque Isle, Roscommon, Saginaw, Tuscola, Washtenaw, and Wexford counties qualify for tax relief. The declaration permits the IRS to postpone certain tax-filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after April 10, 2026, and before Nov. 2, 2026, are granted additional time to file. As a result, affected individuals and businesses will have until Nov. 2, 2026, to file returns and pay any taxes that were originally due during this period.Tip of the Day
Check your medical bill . . . You should either get a bill directly from your provider or an explanation of benefits from Medicare or your insurance company. Two reasons for checking the statement. One, you may be billed for a procedure you did not have or service you didn't receive. Or, two, someone may have stolen your "medical" identity and is incurring charges on your insurance. While this may not be costing you money directly, it's costing the system and, indirectly, all consumers.
July 15, 2026
News
The IRS has announced (MS-2026-02) tax relief for individuals and businesses in the State of Mississippi affected by severe storms, straight-line winds, tornadoes, and flooding that began on May 6, 2026. These taxpayers now have until Nov. 2, 2026, to file various federal individual and business tax returns and make tax payments. Following the disaster declaration issued by the FEMA, individuals and households that reside or have a business in Franklin, Lamar, Lawrence, Lincoln, and Wilkinson counties qualify for tax relief. The declaration permits the IRS to postpone certain tax-filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after May 6, 2026, and before Nov. 2, 2026, are granted additional time to file. As a result, affected individuals and businesses will have until Nov. 2, 2026, to file returns and pay any taxes that were originally due during this period. The Nov. 2, 2026, deadline applies to individuals who had a valid extension to file their 2025 individual income tax return. Because tax payments related to these 2025 returns were due on April 15, 2026, those payments are not eligible for this relief. Penalties on payroll and excise tax deposits due on or after May 6, 2026, and before May 21, 2026, will be abated as long as the tax deposits are made by May 21, 2026. The Nov 2, 2026, deadline also applies to affected quarterly payroll and certain excise tax returns normally due on July 31, 2026.
Tip of the Day
Planning for a startup . . . Except for a disaster such as a fire, tornado, etc., the most critical time of any business is the startup. Thats true for an entirely new business as well as opening a new location for an existing one. Jump in too early and you'll waste critical capital; too late and you'll have missed revenue and profits. Experienced franchisors have the details laid out in part because they plan, but also because they've learned from experience. Most startups can't rely on experience. You don't want shelving to arrive before the building construction work is done, but you don't want to have to wait for the shelving. Staffing can be even more critical. One small startup that showed great promise hired a salesman before the product was ready for production--way before. The salesman did some missionary work but basically sat around for nine months, at a hefty salary. You won't hit every milestone correctly, but a good plan will make things run smoother and help you recover when things don't go according to plan.
July 14, 2026
News
The IRS has announced (WI-2026-02) tax relief for individuals and businesses in the State of Wisconsin affected by severe storms, tornadoes, and flooding that began on April 13, 2026. These taxpayers now have until Nov. 2, 2026, to file various federal individual and business tax returns and make tax payments. Following the disaster declaration issued by the FEMA, individuals and households that reside in Bayfield, Brown, Buffalo, Iowa, Jackson, Jefferson, Juneau, Kenosha, Kewaunee, Manitowoc, Marathon, Milwaukee, Outagamie, Racine, Rock, Sauk, Vernon, Washington, Waukesha, Waupaca, and Winnebago counties, as well as the Oneida Indian Reservation qualify for tax relief. The declaration permits the IRS to postpone certain tax-filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after April 13, 2026, and before Nov. 2, 2026, are granted additional time to file. As a result, affected individuals and businesses will have until Nov. 2, 2026, to file returns and pay any taxes that were originally due during this period. The Nov. 2, 2026, deadline applies to affected taxpayers who normally would have been required to file their 2025 individual income tax returns and pay any tax due on April 15, 2026. It also applies to taxpayers who had a valid extension to file their 2025 return. Click on the link above for more information.
Tip of the Day
Standard mileage or actual costs? . . . Which one gives your the most benefit. If you've got an inexpensive car that gets good gas mileage and little maintenance worries and don't put high mileage on the vehicle, the standard mileage may be as good if not better than the actual cost. You'll also avoid keeping cost records and extra work on the return. If you've got an expensive vehicle and especially one that has high maintenance costs the actual cost method is better. But you've got to work through the numbers to be sure. Keep in mind that either way you'll have to keep a detailed log of your trips.
July 13, 2026
News
The IRS has issued final regulations (T.D. 10050) that amend the Federal estate tax regulations applicable to estates of decedents passing property to or for the benefit of a noncitizen spouse in a domestic trust that satisfies all of the requirements under applicable Federal tax law and regulations to be a qualified domestic trust and for which the executor of the decedent's estate has made a qualified domestic trust election. These final regulations modify the existing regulations to update outdated references, information, and procedures. These final regulations primarily affect the estates of decedents passing property to or for the benefit of a noncitizen spouse in a qualified domestic trust pursuant to applicable Federal tax law.
Tip of the Day
Picking third-party payroll service . . . Doing your own payroll rarely makes sense. The possible exception is for small, infrequent payrolls such as a two-man operation where you and your partner get paid monthly. In most other situations payroll is time consuming and a mistake can quickly result in substantial penalties. And there's always a chance for embezzlement because of the money involved. When picking an outside firm make sure they've got a good track record and are substantial in size.
July 10, 2026
News
The IRS has issued final regulations (T.D. 10051) identifying certain arrangements purporting to be Charitable Remainder Annuity Trusts as listed transactions. Material advisors and certain participants in these listed transactions are required to file disclosures with the IRS and are subject to penalties for failure to disclose. The final regulations describe a transaction in which taxpayers purport to eliminate ordinary income and/or capital gain on the sale of property. In abusive transactions of this type,
These final regulations follow the previously proposed regulations identifying certain CRAT transactions and substantially similar transactions as "listed transactions" for tax reporting purposes.
Tip of the Day
Corroborating evidence . . . An IRS agent or the court may just look at your car log, basis calculation, etc. and accept it. But don't count on it. The courts in particular may see by your car log you crossed the George Washington bridge on May 1, but your EZ-Pass tag shows no trips across the Hudson River for 30 days either side of that date. Or the hotel receipts don't match with your plane trip. At some point such errors could taint your entire log. The same applies to other documentation. Use care when recording dates, times, places, people met, etc.
July 9, 2026
News
The IRS announced IR-2026-83) a new automatic process to provide penalty relief for taxpayers with a history of filing and paying on time, reducing the need for them to request assistance. The new Automatic Exemption from Penalty (AEP) will replace the long-standing First Time Abate administrative relief and is designed to simplify the process and reduce burden for those with a timely compliance history. The new policy, is a systemic administrative relief program expected to begin this summer. AEP applies to eligible original returns beginning with tax year 2025 and 2026 quarterly returns, as well as future tax periods. Taxpayers qualify if they have a history of timely filing the return and paying any tax due in the three prior years (or 12 consecutive quarters for quarterly returns). When taxpayers qualify, penalties are not assessed during processing for:Taxpayers do not need to take action to receive this relief. If eligible, the IRS will apply AEP and issue a notice confirming that the relief was granted. Not all returns are eligible for AEP. For example, information returns and returns that are filed only in response to specific transactions or infrequent events (such as Form 706, U.S. Estate Tax Return or Form 709 Gift Tax Return) generally are not eligible. Taxpayers who do not qualify for AEP may still request penalty relief based on reasonable cause. Go to Penalty Relief for Reasonable Cause for information on other relief.
Tip of the Day
Hiring for the summer? . . . Some companies have just one employee--the owner. Or the owner operates as a sole proprietorship and has no employees. In that case no employment tax returns are filed. But if you hire someone for the summer you need to withhold income and social security taxes. In that case you'll need a employer identification number (if you don't have one), make deposits of the withheld taxes using the IRS EFTPS system, and file Form 941 and, at the end of the year, a W-2 for any employee. Get IRS Publication 15, Employer's Tax Guide for more information.
July 8, 2026
News
Distributions from a C (regular) corporation are income to not only shareholders, but they're also income to anyone. In Mark Chernomordikov; Jessica M. Chernomordikov a.k.a. Jessica Steiner (T.C. Memo. 2025-129) the taxpayer was not a shareholder in the corporation, but his mother was the sole shareholder. The taxpayer treated the corporation's funds as his own paying for luxury vehicles and other personal items as well as taking cash. He lent $1.7 million to a friend for his business without a written loan agreement. The taxpayer did not take a salary from the corporation and did not file individual income tax returns. The Court held that the taxpayer had income from the distributions and payment of personal expenses by the corporation, but that despite the IRS allegations for fraud, it had not carried its burden of showing fraudulent intent.
Tip of the Day
SBA help . . . It's not only when you need a business loan for expansion or when the the president declares a disaster. More minor disasters can qualify for loans or other help from the SBA. And don't ignore your state agencies. There's a good chance there's help available there too.
July 7, 2026
News
Rental real estate losses are passive and generally can not offset other income on an individual's tax return. But, as always there are exceptions. One is if the taxpayer is a "real estate professional" and spends 750 hours or more during the year on real estate activities and if the rental is short-term. In Kevin J. Mirch and Marie C. Mirch (T.C. Memo. 2025-128) the taxpayers had two rental properties. One was rented on a long-term basis; the other was a short-term rental, rented on a daily basis. The participation requirement for the short-term rental property is much less, it could be as little as 100 hours, but the Court found that it was not met. The Court questioned the method used to arrive at the determining the hours spent on the activity and the recordkeeping used. With respect to the longer-term rental property, the Court found the 750-hour requirement had not been met by the taxpayer's own logs.
July 6, 2026
News
You might be able to get an award from the IRS for providing information on another taxpayer that results in the IRS getting money, but the process is not without requirements. In John R.Dee (167 T.C. No. 1) the petitioner provided information to the IRS regarding a taxpayer. The IRS's Whistleblower Office (WBO) forwarded the petitioner's information to the examination team that had recently finished working on a pre-existing audit regarding a taxpayer. The examination team told the WBO that it had already identified and acted on the issues identified by the petitioner. The WBO denied the petitioner's claim for an award under Sec. 7623(b). The Court held it had jurisdiction over whistleblower cases when the whistleblower's information is received by an examination team regarding an open examination as defined by Rev. Proc. 2005-32 and that the petitioner had not shown that the administrative record requires completion or supplementation and that the WBO's determination to deny the petitioner's claim for an award was not an abuse of discretion.
July 1, 2026
News
Cost of goods sold is not deduction but rather a subtraction from gross receipts in determinging a taxpayer's gross income for manufacturing, mining or merchandising businesses. Business expenses such as marketing constitute a deduction. In the case of a service business, gross receipts constitute gross income without any reduction for cost of goods sold. In Andre Temnorod and Brianna Temnorod, et al. (T.C. Memo. 2025-127) a telecommunications company (doing business as an S corporation) purchased the assets of another company in banruptcy proceedings by assuming certain unsecured liabilities payable to vendors of the bankrupt entity. The taxpayer deducted the cost of the assets purchased as cost of goods sold. The IRS argued that the amount paid must be capitalized, not deducted. The Court sided with the IRS, noting expenditures that a buyer must capitalize into an acquired asset's basis are not limited to the price paid to the seller but also include, for example, legal, brokerage, accounting, appraisal, and other ancillary expenses directly related to the asset's acquisition. The requirement that costs be capitalized extends beyond the price payable to the seller to include any costs incurred by the buyer in connection with the purchase, such as appraisals of the property or the costs of meeting any conditions of the sale. They also include liabilities assumed.
Tip of the Day
Balance sheet cleanup . . . It's not unusual for assets to remain on the books long after they're gone. They may not have any impact on your financials or taxes, but they can pose an issue. Those 10-year old power tools have been lying in the corner for years--or even thrown out. They're fully depreciated so there's no tax effect, except possibly for property tax purposes. But once a fully depreciated asset is no longer in your possession they should be taken off the books. You should do a check at least every year when preparing the tax return. You should also check for assets that were sold (or traded in) or abandoned. Assets that were sold may have produced a gain or depreciation recapture or a loss. Assets abandoned could have resulted in a loss. Gains and depreciation recapture could produce taxable income or a deductible loss. Abandoned assets could result in a loss.
Copyright 2026 by A/N Group, Inc. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The information is not necessarily a complete summary of all materials on the subject. Copyright is not claimed on material from U.S. Government sources.--ISSN 1089-1536