News & Analysis as of

Tax Litigation

Jaburg Wilk

Most Settlement Proceeds Are Taxable: What the Ninth Circuit Just Made Clear

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A recent Ninth Circuit decision, Roman v. Commissioner (Mar. 18, 2026), reinforces how narrow the tax-free treatment of settlement proceeds is. In most cases, settlement payments are taxable unless they clearly compensate for...more

Bradley Arant Boult Cummings LLP

Recent Alabama Tax Tribunal Rulings Remind Us of Two Traps for the Unwary Taxpayer (and Tax Practitioner)

Associate Alabama Tax Tribunal Judge Ralph M. Clements, III, recently appointed by Gov. Kay Ivey, has hit the ground running and issued two well-reasoned rulings that nevertheless illustrate traps for unwary taxpayers and...more

McDermott Will & Schulte

IRS roundup: March 23 – March 31, 2026

A US Treasury Inspector General for Tax Administration (TIGTA) report found that the IRS’s approach to auditing large partnerships has been ineffective due to resource constraints and inefficient selection processes,...more

Kilpatrick

5 Key Takeaways | State Tax Cases, Issues & Policy Matters to Watch

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Kilpatrick’s David Hughes, Jordan Goodman, and Samantha Breslow recently presented on the topic of “State Tax Cases, Issues & Policy Matters to Watch” at the COST Mid-West Regional State Tax Seminar in Omaha. ...more

Morgan Lewis

Washington Adopts 9.9% Tax on Residents Earning Over $1 Million

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Washington, long one of the few states without a personal income tax, has enacted a 9.9% tax on income above $1 million. The law is set to take effect in 2028 and is expected to face prompt constitutional challenges....more

McDermott Will & Schulte

The Employee Retention Credit: Ninth Circuit affirms denial of injunction, but leaves door open on merits

We previously discussed the US District Court for the District of Arizona’s April 2025 order denying a motion for a preliminary injunction filed by two tax preparation firms challenging the Internal Revenue Services’ (IRS)...more

Bowditch & Dewey

When Home Sale Tax Breaks Go Wrong: Lessons Learned from the Pesarik Case

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A recent U.S. Tax Court decision (Jeffrey Pesarik v. Commissioner of Internal Revenue) highlights the importance of properly substantiating property tax basis and qualifying for the exclusion of capital gains on the sale of a...more

Polsinelli

Clock Beats Commissioner: IRS Concedes $48M Easement Case

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Key Takeaways - On March 23, 2026, the U.S. Tax Court entered a stipulated decision in Agate Holdings LLC, Agate Manager LLC v. Commissioner under which the IRS conceded the partnership’s full $48.3 million deduction for a...more

McDermott Will & Schulte

IRS roundup: March 9 – March 25, 2026

The US Tax Court is considering developing a disciplinary framework for the misuse of artificial intelligence (AI) in litigation following concerns raised by Judge Mark V. Holmes regarding lawyers citing AI-generated,...more

Rivkin Radler LLP

A Corporation’s Loss of Capacity and the Tax Court’s Jurisdiction

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When things start to go badly in a business, its owners may feel compelled to take certain extraordinary, and usually ill-conceived, measures “to keep the doors open and the lights on.” For instance, when faced with a...more

Offit Kurman

Defeating the IRS at Trial: Lessons from the Taxpayer Victory in Ankner v. United States

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In Ankner v. United States, a federal jury rejected the Internal Revenue Service’s attempt to impose approximately $4 million in promoter penalties under IRC § 6700 against a captive insurance manager....more

Blank Rome LLP

Apportionment: Attack the Normal Formula & Argue an Alternative for the Win

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Why only seek an alternative formula when you can win under the normal formula? A corporate taxpayer won under a special-industry normal apportionment formula, and it won the right to use an alternative apportionment formula...more

Proskauer - Tax Talks

When a Misdirected Partnership Notice isn’t Fatal under the BBA: Mammoth Cave Property

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Although many of the procedural rules for auditing partnerships at the federal level have changed under the Bipartisan Budget Act of 2015 (the “BBA”), some principles—like the effect of actual notice—remain the same. Under...more

Blank Rome LLP

Texas Appeals Court Rejects Comptroller’s Interpretation of Sales and Use Tax Exemption and Rules for Manufacturer in Tax Refund...

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In a recently issued decision, a Texas intermediate appellate court affirmed the decision of the trial court granting summary judgment to a manufacturer in its sales tax refund appeal, finding that the property and services...more

Blank Rome LLP

Decision Turns on a Trust Being a Grantor Trust, But Did It Identify the Wrong Person as the Grantor?

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Many of us are familiar with how a limited liability company can be a disregarded entity for income tax purposes. There is a similar concept for trusts, so-called “grantor trusts” for income tax purposes, which means that the...more

Eversheds Sutherland (US) LLP

Tax Bytes: Week of March 17, 2026

Welcome to the latest edition of Tax Bytes. Our team of tax lawyers is actively monitoring for federal and international tax developments and issues of note. We pull together the items we deem most important to provide...more

Rivkin Radler LLP

Unforeseen Tax Consequences Arising From an Elective Change in Entity Classification

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The Tax Court has previously held that a partner who contributes his own note to a partnership in exchange for a partnership interest takes no basis in the interest and their capital account is not credited for the value of...more

Offit Kurman

ERC Refund Claims Are Running Out of Time: Why Waiting on the IRS Could Cost Businesses Their Credit

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The Employee Retention Credit may be closed to new filings, but the controversy surrounding unpaid and disallowed claims is very much alive. For many businesses, the real risk in 2026 is no longer just whether the IRS will...more

McDermott Will & Schulte

Is your ERC claim protected? Keep an eye on litigation deadlines

In February 2026, the Internal Revenue Service (IRS) announced that, as of December 31, 2025, it had closed all non-examined Employee Retention Credit (ERC) claims....more

Harris Beach Murtha

IRS Files First Response to Common Industry 280E Arguments

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The Internal Revenue Service (IRS) recently filed its first written response to arguments used widely by cannabis taxpayers as justification for not paying Section 280E taxes. The closely-watched U.S. Tax Court case, New...more

Kilpatrick

5 Key Takeaways | Sales Tax Case Law - Lessons from the Courts

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Kilpatrick’s Jordan Goodman recently presented on the topic of “Sales Tax Case Law – Lessons from the Court” at the Advanced Sales and Tax Workshop in Dallas. ...more

White & Case LLP

The Fifth Circuit says this is Sirius business: The IRS loses its fight against the limited partner exception to Self-Employment...

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Upsetting a string of wins for the Internal Revenue Service ("IRS") in the Tax Court, the Fifth Circuit recently rejected the "functional analysis" test for determining whether a limited partner's partnership income is...more

Blake, Cassels & Graydon LLP

The First Five FCA Tax Decisions of 2026

In an eventful start to 2026, the Federal Court of Appeal (FCA) has already released five notable tax decisions. Signalling an active and consequential year ahead, here’s what you need to know about these decisions...more

Cadwalader, Wickersham & Taft LLP

Fifth Circuit Strikes Back on SECA Limited Partner Exception

A recent Fifth Circuit decision, Sirius Solutions LLLP v. Commissioner, brought welcome news for the investment funds industry.  In Sirius, the Fifth Circuit held that the Self-Employment Contributions Act (“SECA”) “limited...more

Fox Rothschild LLP

Court Ruling Creates Refund Opportunity for Pandemic Era IRS Interest and Penalties

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Following a recent Court of Federal Claims decision, taxpayers may be able to seek tax refunds or abatement of interest and penalties assessed during the COVID-19 pandemic. Taxpayers who accrued interest or penalties between...more

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