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…

For those who are fortunate enough to accumulate wealth, passing it along to future generations and donating it to charitable causes are important and laudable financial goals. However, you face a unique set of planning considerations if a large portion of your wealth comes from stock compensation: stock options, restricted stock, restricted stock units (RSUs), ESPPs, other types of equity awards, and holdings of company shares. A recent myStockOptions.com webinar that I moderated featured a trio of experts in this complex planning niche. In this article, I present some of the knowledge and insights they shared. Tax-law changes may be…

In moves to protect businesses located in the UK, there have been a number of recent changes to ensure that the UK taxes due from overseas sellers selling into the UK are being collected. 1. Overview The complexities of the UK’s indirect tax landscape can be challenging for overseas businesses to navigate when starting to sell here for the first time, especially for those selling to consumers. For those importing goods they will need to consider Customs Duty and sellers of both goods and services will need to consider VAT too. VAT and Customs Duty are referred to as indirect…

In this episode of Tax Notes Talk, Tax Notes chief correspondent Stephanie Soong discusses how the Trump administration’s tax priorities have been shaping negotiations on the OECD’s two-pillar project. Tax Notes Talk is a podcast produced by Tax Notes. This transcript has been edited for clarity. David D. Stewart: Welcome to the podcast. I’m David Stewart, editor in chief of Tax Notes Today International. This week: OECD update — pillars, tariffs, and the path forward. When President Trump first took office back in January, he announced that the U.S. would be pulling out of the OECD’s international corporate tax reform…