Corporate tax professionals have a complicated relationship with artificial intelligence (AI). Over the last decade or so, AI has been pitched as everything from an existential threat to a potential industry savior. Now that the hype machine has slowed and corporate tax teams have been able to actually start using AI-powered tools in their day-to-day work, they’ve become the unlikely champions of AI-led innovation in the modern corporation. In fact, when it comes to adopting generative AI (GenAI) tools for research, analysis, and data summarization tasks, corporate tax professionals are leading the way, according to a new report conducted by…

The House Budget Committee promised to revisit the stalled tax bill—by posting a notice that the committee would reconvene a hearing on the matter on Sunday, May 18, at 10 p.m. ET. That’s not a typo. After an earlier vote didn’t advance the bill on Friday, Representatives said they would resume talks on Monday during business hours. That changed over the weekend after criticisms lobbed at fiscally conservative Republicans who had initially opposed the bill because it would contribute significantly to the deficit switched their votes to “present.” On Friday, five Republicans joined Democrats in voting no on the bill:…

The present and future of the tax law is currently being debated in Congress, and it seems all but certain that big changes will be made before the end of 2025 when the so-called Trump tax cuts are scheduled to expire. We all have to pay taxes, and that will remain a constant, though very few of us enjoy the annual drudgery associated with tax return filings, much less the constant record-keeping and the nagging fear of audit. Most of us don’t especially like parting with some of our hard-earned dollars either. It doesn’t help that our tax system is…

So far in 2025, we’ve had three decisions focused on Code Section 183 , commonly known as the hobby loss rule, although the pedantic will point out that it actually concerns “activities not entered into for profit” be they hobby-like or not. Not surprisingly two of them are about horse breeding. We will take them in order, which let’s us start off with a taxpayer win. There is also a well covered collection case that has a hobby loss angle that I don’t see anybody else mentioning. Prospect Of Appreciation Fredenberg v Comm. 2025 TCS 1 (the first summary opinion…

Most defendants issue IRS Forms 1099 for legal settlements. The form may be issued to the lawyer, the client, or both. Frequently, both the client and the lawyer receive a Form 1099 for 100%, making it appear that the settlement amount was 200% of the payment. The biggest exception is for compensatory personal physical injury damages. In an injury accident case settling before trial, the lawyer should receive a Form 1099 for the proceeds, but the plaintiff should not. If the case settles after a verdict with punitive damages or interest, a Form 1099 is required for the taxable portion,…

There has been a lot of discussion about the possible U.S. tax obligations for Pope Leo XIV, the first U.S. citizen Pope. Some of the assertions have generated confusion, leaving key U.S. tax concepts insufficiently addressed. One of the biggest areas of misunderstanding has been the Pope’s possible FBAR reporting (FinCEN Form 114) versus FATCA reporting (IRS Form 8938) obligations for financial accounts at the Vatican Bank. Some of the discourse has been conflating the FBAR requirements under the Bank Secrecy Act with those of FATCA Form 8938 requirements under the U.S. tax laws. It is important to distinguish between…

It seems fitting that it’s pouring rain as I wrap up the news this week—it’s exactly how the week started for me. On Tuesday, I returned to Washington, D.C. (I was just in town the week before for the ABA May Tax Meeting) to speak on a panel at the National Association of Enrolled Agents Fly-In. It was pouring rain, so I was a bit bedraggled, but it was still great to mingle with tax and legal professionals to discuss policy issues. And the timing couldn’t have been better—tax policy issues were front and center as the House of Representatives…

Days after the Ways and Means Committee released a draft version of the tax bill, followed by a substitute amendment, questions began to fly. Tops on the list: Did Trump keep his promise to end taxes on tips, overtime, and Social Security? The answer isn’t as simple as you think. No Tax On Tips Trump initially promised to end taxes on tips while campaigning in June in the swing state of Nevada. The hospitality industry is huge in Nevada, making up more than 20% of jobs in the state. The pledge didn’t make it into the draft bill but did…

Over the past two years, the Internal Revenue Service (IRS) has experienced significant fluctuations in funding, receiving billions at one point only to see cuts soon after. These rapid changes have sparked confusion among taxpayers about how their tax dollars are being managed. The debate over IRS funding has become a contentious issue, with some lawmakers advocating for increased support while others push for defunding the agency entirely. This ongoing clash leaves taxpayers with an unclear understanding of the IRS’s financial situation and performance. Amid the heated rhetoric, it is crucial for taxpayers to know the facts—understanding how much funding…

If you were expecting the budget reconciliation process to be easy, you haven’t been paying attention. Several committees are working on language related to the bill, including Agriculture, Energy and Commerce, and Ways and Means. Each of those committees will also consider amendments, proposals, and markups. That means there are several working parts and, in some cases, different priorities. Add-ons like plans to nix IRS Direct File may not have been included in early drafts, but appear as the process churns on. Even as the Energy and Commerce Committee considered significant changes to Medicaid, including work requirements, most of the…