The California Office of Tax Appeals has posted its current opinion-cycle notice, reminding taxpayers and practitioners that comments on whether opinions posted on June 1 should or should not be designated as precedential are due by June 29. OTA also states that new opinions will be posted on July 6.

For many taxpayers, this may sound like a narrow administrative update. It is not. OTA opinions can shape how California tax disputes are decided, especially when an opinion becomes precedential. Businesses, individuals, tax professionals, and taxpayers with pending California appeals should understand why these opinion cycles matter.

The IRS’s 2025 Data Book shows a tax agency under pressure. The IRS still processed hundreds of millions of returns and collected trillions of dollars, but audit closures and recommended additional tax declined from the prior year. At the same time, staffing reductions and operational strain may affect how quickly the IRS handles audits, notices, refunds, identity-theft cases, correspondence, and appeals.

For taxpayers, the practical lesson is not that IRS enforcement has disappeared. It has not. The lesson is more nuanced: IRS enforcement may become less predictable, more automated in some areas, more selective in others, and slower when human review is required.

That combination can be difficult for taxpayers. A lower audit rate does not necessarily mean a lower risk of IRS contact. It may mean fewer traditional audits, more document-matching notices, longer response times, delayed resolutions, and greater importance placed on records, transcripts, and procedural deadlines.

The IRS has announced a new time-limited settlement opportunity for eligible partnerships involved in syndicated conservation easement and historic preservation easement disputes. For investors still involved in these cases, the offer deserves careful review.

The IRS has partially acquiesced in the Tax Court’s decision in Abdo v. Commissioner, but only in a narrow way. In an Action on Decision published in Internal Revenue Bulletin 2026-23, the IRS agreed only with the Tax Court’s limited holding that the COVID-19 federal disaster declarations created a mandatory 60-day postponement period from January 20, 2020, to March 20, 2020.

The IRS did not agree with the Tax Court’s broader reasoning. It also did not agree with the court’s invalidation of portions of the Treasury regulations or with any interpretation that would extend the COVID-19 postponement period beyond that 60-day window.

For taxpayers, this is more than a technical procedural development. The issue affects Tax Court filing deadlines, refund claims, penalty abatement requests, interest disputes, disaster postponement rules, and the IRS’s approach to taxpayer arguments based on Internal Revenue Code section 7508A.

The Treasury Department and IRS have announced that they intend to issue proposed regulations addressing the excise tax on excess compensation and excess parachute payments paid by applicable tax-exempt organizations. The announcement, issued in Notice 2026-36, follows statutory changes that expanded the reach of Internal Revenue Code section 4960.

This is an important development for nonprofits, hospitals, universities, private foundations, tax-exempt affiliates, supporting organizations, and related entities that pay significant compensation to executives, physicians, investment professionals, athletic personnel, administrators, or other highly compensated employees.

The issue is no longer limited only to the five highest-compensated employees of a tax-exempt organization. Under the expanded rules, the tax may apply more broadly to any employee with compensation exceeding $1 million in a tax year or to an employee who receives an excess parachute payment.

That change can create new tax exposure, governance concerns, reporting obligations, and compensation-planning issues for organizations that may not have previously viewed themselves as subject to IRC section 4960 risk.

The IRS has updated its guidance on tax changes under the One, Big, Beautiful Bill Act, including two areas that are likely to generate taxpayer confusion and controversy: limitations on Employee Retention Credit refund claims and changes affecting gig economy workers and Form 1099-K reporting.

For many taxpayers, these updates are not simply technical. They affect whether a business can still receive an ERC refund, how a taxpayer should respond to an IRS disallowance letter, and whether income received through payment apps or online platforms must be reported even when no information return is issued.

The Tax Court’s recent decision in Paschall v. Commissioner, T.C. Memo. 2026-46, is an important development for taxpayers who receive cryptocurrency staking rewards. The case addressed a question that has been heavily debated in the digital-asset tax community: are staking rewards taxable when received, or only later when the taxpayer sells or exchanges the tokens?

The IRS and its Security Summit partners have announced a new framework designed to better protect taxpayers and federal tax revenue from identity theft and refund fraud. The announcement is not just a cybersecurity update. It reflects a broader shift in how tax fraud is occurring and how the IRS, states, tax software companies, payroll providers, and tax professionals are trying to respond.

For taxpayers, businesses, and professional advisors, the practical message is direct: tax identity theft is no longer limited to obviously fake returns or crude phishing emails. Fraudsters increasingly seek real taxpayer, payroll, wage, withholding, and financial data so they can file returns that look legitimate enough to bypass ordinary filters.

That makes prevention, documentation, and rapid response more important than ever.

The Treasury Department and IRS have finalized regulations modifying information-reporting obligations for certain sales or exchanges of partnership interests. The final regulations are effective May 20, 2026, and remove Treasury Regulation section 1.6050K-1(c)(2), a rule that had required partnerships to furnish certain computational information to transferor partners in connection with sales or exchanges involving section 751 property.

Although the change is procedural, it matters. Partnership interest sales are often described casually as capital gain transactions, but that description can be incomplete. If the partnership owns certain “hot assets,” including unrealized receivables or inventory items, part of the selling partner’s gain may be treated as ordinary income rather than capital gain. That ordinary-income component can affect tax reporting, tax liability, return preparation, transaction diligence, withholding considerations, and downstream IRS correspondence.

For partnerships, sellers, buyers, and tax professionals, the new rules are a reminder that a partnership interest sale is not always a simple sale of a capital asset. Before a transaction closes, and before a return is filed, taxpayers should consider whether section 751 applies and whether the reporting is properly coordinated.

IRS penalties can turn a tax dispute into a much larger problem. A taxpayer may already owe additional tax and interest, only to find that the IRS has also asserted penalties for late filing, late payment, negligence, substantial understatement, failure to deposit, or another compliance failure.

For California tax purposes, moving out of the state is important, but it is not always enough. The Franchise Tax Board may examine whether the taxpayer truly changed domicile, whether the taxpayer remained a California resident, whether the taxpayer’s absence from California was temporary or transitory, and whether any income remains California-source even after the move.

Lawsuit settlements often end with a signed agreement, a release, and a payment. For tax purposes, however, the matter may not be over when the settlement funds are disbursed. Months later, the plaintiff, counsel, or both may receive one or more IRS Forms 1099 reporting some or all of the settlement proceeds. That reporting can be confusing, and in some cases it can create a mismatch between how the parties viewed the settlement and how the payment is later reported to the IRS.