News
The IRS acknowledged the 50th anniversary of the Earned Income Tax Credit (EITC), which has helped lift millions of working families out of poverty since its inception. Signed into law by President ...
The IRS has released the applicable terminal charge and the Standard Industry Fare Level (SIFL) mileage rate for determining the value of noncommercial flights on employer-provided aircraft in effect ...
The IRS is encouraging individuals to review their tax withholding now to avoid unexpected bills or large refunds when filing their 2025 returns next year. Because income tax operates on a pay-as-you-...
The IRS has reminded individual taxpayers that they do not need to wait until April 15 to file their 2024 tax returns. Those who owe but cannot pay in full should still file by the deadline to avoid t...
A new Alabama law redefines how state-level sales and use tax exemptions apply to county and municipal taxes, introducing stricter procedures for local governments wishing to offer similar exemptions....
Alaska has enacted legislation creating new energy incentives by extending tax-exempt statutes to independent power producers. An electricity generation facility or electricity storage facility that i...
Arizona has extended the transaction privilege tax exemption for qualifying equipment used in harvesting or processing qualifying forest products to December 31, 2028. Previously, the exemption was se...
The Arkansas Attorney General's office has opined that authorities created under the Regional Intermodal Facilities Act are exempt from all taxes by any political subdivision of the state, including c...
A taxpayer's claim for refund of California income taxes was not barred by the statute of limitations, because California had conformed to an IRS notice that granted taxpayers in certain counties who ...
Colorado has passed a law allowing kei vehicles to be registered and driven on some Colorado roads and including them in the definition of motor vehicles subject to state sales and use tax. A "kei ve...
Connecticut notifies tobacco products manufacturers of the annual revision of required forms that must be completed and filed with either the Connecticut Department of Revenue Services or the Office o...
Delaware Gov. Matt Meyer released his budget for fiscal year 2026 that includes proposals to cut personal income taxes and create 3 new tax brackets. The budget also includes a proposal to increase th...
The District of Columbia Mayor has presented an economic growth agenda for 2026 that proposes:no sales tax increase in FY26;reducing the Universal Paid Leave tax from 0.75% to 0.72%; andcreate a sales...
Effective July 1, 2025, through June 30, 2026, the Florida severance tax rates for gas and sulfur are: $0.171 per MCF for gas production; and $6.38 per ton for sulfur production. These rates must be u...
Multiple Georgia counties have sales and use tax rate change that take effect on July 1, 2025.County Tax Rate ChangesThe following counties will have tax rate changes:Clinch, 7%;Stewart, 8%;Telfair, 8...
A Hawaii circuit court properly dismissed a taxpayer's suit challenging a Hawaii rule that subjected the taxpayer's transient accommodations and travel-related services to general excise and use tax. ...
The Idaho State Tax Commission announced that it is analyzing the implementation of previously enacted the Idaho Parental Choice Tax Credit. Once the program details are available, the Commission will...
Illinois amended a rule on the volunteer emergency worker credit to reflect a law change expanding the credit to individuals who volunteer for 100 or more hours during the tax year for a county or m...
A taxpayer may claim a credit against Indiana corporate or personal income tax liability for certain qualified railroad expenditures and qualified new rail infrastructure expenditures.Credit AmountThe...
The Iowa General Assembly has enacted a law to encourage electronic filing of sales and use tax returns. In Iowa, the GovConnectIowa online filing system has gained in popularity, however in 2024, ove...
Kansas posted local sales and use rate updates for:the cities of Abilene and Lyndon; andcommunity improvement and other special districts, including Garden City 4-A's Properties, Mission Mart, Overlan...
Kentucky announced the counties impacted by severe storms, straight-line winds, flooding, landslides and mudslides that began on April 2, 2025 where building owners are eligible for sales and use tax ...
Proposed Amendment 2 to the Louisiana Constitution, which was on the March 29, 2025 ballot, failed. The amendment would have :lowered the maximum income tax rate;increased income tax deductions for ci...
Maine Rule 104, which outlines requirements for filing certain Maine tax returns, including electronic filing requirements, has been amended to require that the following file electronic returns:certa...
Applicable to tax years after 2024, Maryland personal income tax is abated for those who die while serving as members of the uniformed services (formerly, members of the armed forces). In addition, pe...
The Massachusetts Department of Revenue explains their position following the Appellate Tax Board's decision confirming that financial institutions are eligible to claim the corporate income tax resea...
The Michigan prepaid sales tax rate for fuel increases to 16.1 cents per gallon for the period 1, 2025 through June 30, 2025. The rate for diesel fuel decreases to 18.1 cents per gallon. Revenue Admi...
The Minnesota Department of Revenue has issued guidance on the income tax subtraction available to licensed cannabis or hemp businesses for certain expenses not allowed on federal returns. For tax yea...
Mississippi has enacted legislation providing income tax credits and incentive payments for developers who rehabilitate blighted property in the state. Eligible taxpayers can claim a credit amounting ...
The Missouri State Tax Commission has ordered Jackson County officials to roll back residential property tax assessments. Specifically, in order to prevent excessive, mistaken, and erroneous ass...
The Montana Department of Revenue (DOR) has announced that it will launch a new website on May 15, 2025. The primary url will change from mtrevenue.gov to revenue.mt.gov and the DOR notes the new ...
Nebraska has amended several of its income tax credit and incentive programs.Nebraska Advantage Rural Advantage ActThe tax credit for livestock modernization is capped at $7.5 million for 2025 and for...
Nevada has amended its regulation on the deduction of obsolescence from the taxable value of property. In determining the amount of obsolescence to be deducted, the State Board and the county boards o...
The New Hampshire Department of Revenue Administration reminds taxpayers that the Interest and Dividends Tax is repealed effective January 1, 2025. Technical Information Release TIR 2025-001, New Ham...
New Jersey has issued new rules, and concurrent proposed rules, for its Next New Jersey Program that provides tax credits to eligible artificial intelligence (AI) businesses. Businesses primarily enga...
New Mexico has enacted legislation making a minor adjustment to the high-wage jobs tax credit by changing the definition of a “threshold job.” Threshold jobs are used in the tax credit to track a ...
Authorizations for the city of White Plains to impose additional local New York sales and compensating use taxes at the rates of 0.50%, 0.25%, and 0.25% are extended until August 31, 2027. Previously,...
The interest rate on North Carolina tax assessments (underpayments) and refunds (overpayments) for the period July 1, 2025, through December 31, 2025, remains at 7%. Interest Rate, North Carolina Dep...
North Dakota has created a corporate and personal income tax credit for employers that provide child care contributions. The total credit available to each qualified employer equals 50% of the taxpaye...
Ohio has announced a change in the sales and use tax rate for Lake County that will be effective July 1, 2025. The rate will increase from the current 7.0% to 7.25%. Tax Rates and Changes, Ohio Depar...
A taxpayer must file a written protest of a denial of Oklahoma's Parental Choice tax credit within fifteen days after electronic notification. If a written protest is not filed within this period, the...
Oregon has extended the sunset dates for certain medical provider assessments, from 2026 to December 31, 2032.Specifically, the sunset date of:health insurance plan premiums or premium equivalents is ...
Pennsylvania launched a new online platform to provide an improved tax appeals process for taxpayers. The new Board of Appeals Online Petition Center offers an improved user interface, a feature to ...
The Rhode Island Department of Revenue Division of Taxation has issued a notice summarizing the 2025 income tax filing requirements for LLCs. Notice 2025-01, Rhode Island Division of Taxation, Februa...
South Carolina amended the sales tax exemption for durable medical equipment to remove the requirement that the seller have a principal place of business in the state. The law was changed in reaction ...
South Dakota senior citizens and persons with disabilities have until July 1, 2025, to apply for sales and property tax refund. To be eligible, specific criteria must be met including age, residency, ...
The Tennessee franchise and excise tax exemption for agricultural cooperative association subsidiaries organized as corporations is expanded to include subsidiaries formed as various other types of bu...
The Texas legislature has proposed a constitutional amendment that would prohibit the imposition of a tax on the realized or unrealized capital gains of an individual, family, estate, or trust. This a...
Effective July 1, 2025, the following counties impose the indicated county-wide taxes:Rich County imposes a 0.3% county option sales and use tax to fund a fixed guideway, public transit or highways;Sa...
Vermont announced that the following seven towns will have new local option taxes, effective July 1, 2025.Hartford is adding Local Option Sales Tax (the town already has Local Option Meals and Rooms T...
Virginia enacted biennial budget legislation containing various corporate income, personal income, retail sales and use, and other tax provisions.Rebate ChecksTax refund checks will be issued in an am...
Washington has released a local sales and use tax guide that includes rate changes in the City of Stevenson and San Juan County taking effect July 1, 2025. It also addresses municipal annexations that...
West Virginia expanded an income tax credit for property tax paid by disabled veterans to include widowed spouses of disabled veterans. H.B. 2121, Laws 2025, effective July 11, 2025...
The Wisconsin Department of Revenue has issued Wisconsin Tax Bulletin Number 229 (April 2025). The Bulletin includes:General Updates and Reminders;Income and Franchise Tax Updates and Reminders;Sales ...
Wyoming has enacted legislation specifying the order in which a taxpayer should apply property tax exemptions when multiple property tax exemptions apply to the same property. The legislation states t...
The American Institute of CPAs in a March 31 letter to House of Representatives voiced its “strong support” for a series of tax administration bills passed in recent days.
The American Institute of CPAs in a March 31 letter to House of Representatives voiced its “strong support” for a series of tax administration bills passed in recent days.
The four bills highlighted in the letter include the Electronic Filing and Payment Fairness Act (H.R. 1152), the Internal Revenue Service Math and Taxpayer Help Act (H.R. 998), the Filing Relief for Natural Disasters Act (H.R. 517), and the Disaster Related Extension of Deadlines Act (H.R. 1491).
All four bills passed unanimously.
H.R. 1152 would apply the “mailbox” rule to electronically submitted tax returns and payments. Currently, a paper return or payment is counted as “received” based on the postmark of the envelope, but its electronic equivalent is counted as “received” when the electronic submission arrived or is reviewed. This bill would change all payment and tax form submissions to follow the mailbox rule, regardless of mode of delivery.
“The AICPA has previously recommended this change and thinks it would offer clarity and simplification to the payment and document submission process,” the organization said in the letter.
H.R. 998 “would require notices describing a mathematical or clerical error be made in plain language, and require the Treasury Secretary to provide additional procedures for requesting an abatement of a math or clerical adjustment, including by telephone or in person, among other provisions,” the letter states.
H.R. 517 would allow the IRS to grant federal tax relief once a state governor declares a state of emergency following a natural disaster, which is quicker than waiting for the federal government to declare a state of emergency as directed under current law, which could take weeks after the state disaster declaration. This bill “would also expand the mandatory federal filing extension under section 7508(d) from 60 days to 120 days, providing taxpayers with additional time to file tax returns following a disaster,” the letter notes, adding that increasing the period “would provide taxpayers and tax practitioners much needed relief, even before a disaster strikes.”
H.R. 1491 would extend deadlines for disaster victims to file for a tax refund or tax credit. The legislative solution “granting an automatic extension to the refund or credit lookback period would place taxpayers affected my major disasters on equal footing as taxpayers not impacted by major disasters and would afford greater clarity and certainty to taxpayers and tax practitioners regarding this lookback period,” AICPA said.
Also passed by the House was the National Taxpayer Advocate Enhancement Act (H.R. 997) which, according to a summary of the bill on Congress.gov, “authorizes the National Taxpayer Advocate to appoint legal counsel within the Taxpayer Advocate Service (TAS) to report directly to the National Taxpayer Advocate. The bill also expands the authority of the National Taxpayer Advocate to take personnel actions with respect to local taxpayer advocates (located in each state) to include actions with respect to any employee of TAS.”
Finally, the House passed H.R. 1155, the Recovery of Stolen Checks Act, which would require the Treasury to establish procedures that would allow a taxpayer to elect to receive replacement funds electronically from a physical check that was lost or stolen.
All bills passed unanimously. The passed legislation mirrors some of the provisions included in a discussion draft legislation issued by the Senate Finance Committee in January 2025. A section-by-section summary of the Senate discussion draft legislation can be found here.
AICPA’s tax policy and advocacy comment letters for 2025 can be found here.
By Gregory Twachtman, Washington News Editor
The Tax Court ruled that the value claimed on a taxpayer’s return exceeded the value of a conversation easement by 7,694 percent. The taxpayer was a limited liability company, classified as a TEFRA partnership. The Tax Court used the comparable sales method, as backstopped by the price actually paid to acquire the property.
The Tax Court ruled that the value claimed on a taxpayer’s return exceeded the value of a conversation easement by 7,694 percent. The taxpayer was a limited liability company, classified as a TEFRA partnership. The Tax Court used the comparable sales method, as backstopped by the price actually paid to acquire the property.
The taxpayer was entitled to a charitable contribution deduction based on its fair market value. The easement was granted upon rural land in Alabama. The property was zoned A–1 Agricultural, which permitted agricultural and light residential use only. The property transaction at occurred at arm’s length between a willing seller and a willing buyer.
Rezoning
The taxpayer failed to establish that the highest and best use of the property before the granting of the easement was limestone mining. The taxpayer failed to prove that rezoning to permit mining use was reasonably probable.
Land Value
The taxpayer’s experts erroneously equated the value of raw land with the net present value of a hypothetical limestone business conducted on the land. It would not be profitable to pay the entire projected value of the business.
Penalty Imposed
The claimed value of the easement exceeded the correct value by 7,694 percent. Therefore, the taxpayer was liable for a 40 percent penalty for a gross valuation misstatement under Code Sec. 6662(h).
Ranch Springs, LLC, 164 TC No. 6, Dec. 62,636
State and local housing credit agencies that allocate low-income housing tax credits and states and other issuers of tax-exempt private activity bonds have been provided with a listing of the proper population figures to be used when calculating the 2025:
State and local housing credit agencies that allocate low-income housing tax credits and states and other issuers of tax-exempt private activity bonds have been provided with a listing of the proper population figures to be used when calculating the 2025:
- calendar-year population-based component of the state housing credit ceiling under Code Sec. 42(h)(3)(C)(ii);
- calendar-year private activity bond volume cap under Code Sec. 146; and
- exempt facility bond volume limit under Code Sec. 142(k)(5)
These figures are derived from the estimates of the resident populations of the 50 states, the District of Columbia and Puerto Rico, which were released by the Bureau of the Census on December 19, 2024. The figures for the insular areas of American Samoa, Guam, the Northern Mariana Islands and the U.S. Virgin Islands are the midyear population figures in the U.S. Census Bureau’s International Database.
The value of assets of a qualified terminable interest property (QTIP) trust includible in a decedent's gross estate was not reduced by the amount of a settlement intended to compensate the decedent for undistributed income.
The value of assets of a qualified terminable interest property (QTIP) trust includible in a decedent's gross estate was not reduced by the amount of a settlement intended to compensate the decedent for undistributed income.
The trust property consisted of an interest in a family limited partnership (FLP), which held title to ten rental properties, and cash and marketable securities. To resolve a claim by the decedent's estate that the trustees failed to pay the decedent the full amount of income generated by the FLP, the trust and the decedent's children's trusts agreed to be jointly and severally liable for a settlement payment to her estate. The Tax Court found an estate tax deficiency, rejecting the estate's claim that the trust assets should be reduced by the settlement amount and alternatively, that the settlement claim was deductible from the gross estate as an administration expense (P. Kalikow Est., Dec. 62,167(M), TC Memo. 2023-21).
Trust Not Property of the Estate
The estate presented no support for the argument that the liability affected the fair market value of the trust assets on the decedent's date of death. The trust, according to the court, was a legal entity that was not itself an asset of the estate. Thus, a liability that belonged to the trust but had no impact on the value of the underlying assets did not change the value of the gross estate. Furthermore, the settlement did not burden the trust assets. A hypothetical purchaser of the FLP interest, the largest asset of the trust, would not assume the liability and, therefore, would not regard the liability as affecting the price. When the parties stipulated the value of the FLP interest, the estate was aware of the undistributed income claim. Consequently, the value of the assets included in the gross estate was not diminished by the amount of the undistributed income claim.
Claim Not an Estate Expense
The claim was owed to the estate by the trust to correct the trustees' failure to distribute income from the rental properties during the decedent's lifetime. As such, the claim was property included in the gross estate, not an expense of the estate. The court explained that even though the liability was owed by an entity that held assets included within the taxable estate, the claim itself was not an estate expense. The court did not address the estate's theoretical argument that the estate would be taxed twice on the underlying assets held in the trust and the amount of the settlement because the settlement was part of the decedent's residuary estate, which was distributed to a charity. As a result, the claim was not a deductible administration expense of the estate.
P.B. Kalikow, Est., CA-2
An individual was not entitled to deduct flowthrough loss from the forfeiture of his S Corporation’s portion of funds seized by the U.S. Marshals Service for public policy reasons. The taxpayer pleaded guilty to charges of bribery, fraud and money laundering. Subsequently, the U.S. Marshals Service seized money from several bank accounts held in the taxpayer’s name or his wholly owned corporation.
An individual was not entitled to deduct flowthrough loss from the forfeiture of his S Corporation’s portion of funds seized by the U.S. Marshals Service for public policy reasons. The taxpayer pleaded guilty to charges of bribery, fraud and money laundering. Subsequently, the U.S. Marshals Service seized money from several bank accounts held in the taxpayer’s name or his wholly owned corporation. The S corporation claimed a loss deduction related to its portion of the asset seizures on its return and the taxpayer reported a corresponding passthrough loss on his return.
However, Courts have uniformly held that loss deductions for forfeitures in connection with a criminal conviction frustrate public policy by reducing the "sting" of the penalty. The taxpayer maintained that the public policy doctrine did not apply here, primarily because the S corporation was never indicted or charged with wrongdoing. However, even if the S corporation was entitled to claim a deduction for the asset seizures, the public policy doctrine barred the taxpayer from reporting his passthrough share. The public policy doctrine was not so rigid or formulaic that it may apply only when the convicted person himself hands over a fine or penalty.
Hampton, TC Memo. 2025-32, Dec. 62,642(M)