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.

Out-of-state businesses selling into California often assume that limited in-state activity will not expose them to California income or franchise tax. A recent California Office of Tax Appeals matter shows why that assumption can be risky.

The California Office of Tax Appeals lists Ken’s Foods, Inc., 2026-OTA-249P, as a June 2026 pending precedential opinion. The issue is whether the taxpayer’s California activities exceeded the protection of Public Law 86-272.

For businesses that sell tangible personal property into California, this is an important development. Public Law 86-272 can provide a narrow federal protection against state net income taxes when a company’s in-state activities are limited to protected solicitation. But the protection is not unlimited, and California tax authorities have continued to examine whether a company’s actual in-state activities go beyond solicitation.

Taxpayers often believe that if enough years pass, the IRS can no longer assess or collect old taxes. Sometimes that is true. Federal tax procedure includes statutes of limitations that restrict how long the IRS has to assess tax, how long the IRS has to collect assessed tax, and how long a taxpayer has to claim a refund.

But the rules change dramatically when a taxpayer never filed a return. In that situation, the normal three-year assessment period may never begin. The IRS may prepare a substitute for return, assess tax, and begin collection. Even after the IRS prepares a substitute return, the taxpayer may still need to file a valid original return to start the assessment statute and correct the government-prepared assessment.

For taxpayers with unfiled returns, substitute-for-return assessments, old balances, or refund claims, the statute of limitations analysis can be more complicated than it appears.

California’s Franchise Tax Board recently highlighted an important conformity update for tax-exempt organizations. In its June 2026 Tax News, FTB explained that Senate Bill 711 updated California’s conformity to Internal Revenue Code section 512 as of January 1, 2025, subject to California-specific modifications.

For California nonprofits and other exempt organizations, this matters because California is now aligning more closely with the federal rules requiring separate reporting of unrelated business taxable income, commonly referred to as UBTI, for each unrelated trade or business under IRC section 512(a)(6).

This is not merely a form change. It may require exempt organizations to revisit how they identify unrelated business activities, track revenue and expenses, allocate shared costs, preserve net operating loss information, and prepare for future California reporting requirements.

A recent federal district court decision is a useful reminder that the IRS’s levy power is broad, but not unlimited. In Neuberger, Quinn, Gielen, Rubin & Gibber, P.A. v. United States, the U.S. District Court for the District of Maryland held that the IRS wrongfully levied a law firm’s operating account under an alter-ego theory to collect the tax liabilities of a separate corporate taxpayer.

The case is important for law firms, fiduciaries, professional service firms, family offices, and other advisors who form entities, serve as officers or directors, maintain client ledgers, or hold client funds in trust. The IRS may scrutinize these arrangements when it cannot collect from the taxpayer directly. But the government still must prove a legally sufficient connection between the taxpayer and the property levied.

The court found that the IRS failed to do so.

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.

Form 843, Claim for Refund and Request for Abatement, is one of the principal tools taxpayers use to request a refund or abatement of certain penalties, additions to tax, interest, fees, or other amounts. But Form 843 is not just a form. The form itself is only the cover page. The substance of the request is usually the narrative: the factual chronology, legal basis, supporting documents, and explanation of why the IRS should remove or refund the amount at issue.

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.

From a tax perspective, options are not simple. The tax result can turn on the type of option, the exercise price, the fair market value of the stock, the timing of exercise, the holding period, the employee’s alternative minimum tax exposure, and whether the company complied with technical plan and valuation rules.

Receiving a tax notice can create an immediate practical problem: should you pay the amount the IRS or state tax agency says is due, or should you wait while you dispute it?

When a lawsuit settles, the parties often focus on the settlement amount, the release, confidentiality, payment timing, and dismissal. Tax reporting is sometimes treated as a secondary issue. That can be a mistake. In many cases, the timing, structure, and destination of settlement payments can materially affect tax reporting, plaintiff planning, attorney-fee issues, lien resolution, structured settlement decisions, and the defendant’s ability to close the matter.

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.