News & Analysis as of

Tax Court

Eversheds Sutherland (US) LLP

Tax Court holds final partnership adjustment untimely, invalidates conflicting regulation

On July 2, 2025, the Tax Court issued its unanimous reviewed opinion in JM Assets, LP v. Commissioner, 165 T.C. 1. It held that the Service did not timely issue a final partnership adjustment (FPA) to JM Assets, LP (JM...more

Proskauer - Tax Talks

Tax Court Breaks New Ground on the Deductibility of Termination Fees with AbbVie Ruling

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On June 17, 2025, the Tax Court opinion in AbbVie Inc. and Subsidiaries v. Commissioner of Internal Revenue was issued, holding that the approximately $1.6 billion termination fee AbbVie (a Delaware corporation) paid to its...more

Proskauer Rose LLP

Wealth Management Update - July 2025

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The July 2025 Section 7520 rate for use with estate planning techniques such as CRTs, CLTs, QPRTs and GRATs is 5.00%, which is the same as the June 2025 Section 7520 rate...more

Bilzin Sumberg

Playing Battleship with the IRS: Did They Sink Our Battleship?

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In prior posts, I discussed the dangers of playingBattleship with the IRS and how taxpayers scored “a hit”.  Recently, taxpayers took another turn in the game and scored another hit with the District Court’s recently issued...more

Freeman Law

Tax Cout in Brief | Christiansen v. Commissioner

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The Tax Court in Brief - Freeman Law’s “The Tax Court in Brief” covers substantive Tax Court opinion, providing a brief of its decisions in clear, concise prose....more

Holland & Knight LLP

The High Stakes of Section 501(c)(3) Tax-Exempt Status Revocation: Declaratory Judgment Actions

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Discussions of the tax-exempt status of universities, nonprofit advocacy groups and other Section 501(c)(3) organizations frequently have been in the news lately. The IRS revocation of a Section 501(c)(3) organization's...more

Cadwalader, Wickersham & Taft LLP

Tax Court Denies SECA Exception to Soroban

The Tax Court recently ruled for the IRS in another case involving the “limited partner exception” under the Self Employment Contributions Act (SECA). Code Section 1402(a)(13) generally exempts the distributive share of...more

Cadwalader, Wickersham & Taft LLP

AbbVie Catches a Break in Termination Fee Tax Court Case

On June 17, the U.S. Tax Court ruled that AbbVie, Inc. could deduct the fee it paid to terminate its 2014 combination agreement with Shire plc.  This decision represents a significant win for AbbVie, and it represents a...more

Lippes Mathias LLP

Supreme Court Undermines Taxpayers’ Due Process Rights

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On June 12, 2025, the U.S. Supreme Court issued a significant decision in Commissioner of Internal Revenue v. Zuch, clarifying the jurisdictional boundaries of the U.S. Tax Court in Collection Due Process (CDP) appeals....more

Holland & Knight LLP

AbbVie's Tax Triumph: Breaking Free from Capital Loss Limitations

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In a significant win for taxpayers, the U.S. Tax Court recently ruled in AbbVie Inc. v. Commissioner, Docket No. 2597-23, that a $1.6 billion "Break Fee" paid by AbbVie qualifies as an ordinary and necessary business expense...more

Hone Maxwell

Supreme Court Gives IRS Ability to Levy Taxpayers Without Tax Court Challenge

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In a pivotal ruling, the U.S. Supreme Court on June 12, 2025, held that the U.S. Tax Court lacks jurisdiction to hear a taxpayer’s Collection Due Process appeal under IRC § 6330 once the IRS can no longer pursue a levy,...more

Pullman & Comley - For What It May Be Worth

Solar Property Tax Exemptions Granted by Connecticut Tax Court

In two recent decisions, Connecticut Tax Court Presiding Judge Matthew Budzik found that three facilities consisting of solar panels and related equipment were entitled to property tax exemptions pursuant to Connecticut...more

Frost Brown Todd

Substantiating the Right to Claim QSBS Tax Benefits | Part 1

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Section 1202 provides an exclusion from capital gains when a stockholder sells qualified small business stock (QSBS), assuming all eligibility requirements are satisfied. Section 1045 provides for the tax-free rollover of...more

Rivkin Radler LLP

Writing Off A Loan – Simultaneous COD Income and Bad Debt Deduction? Not Necessarily

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If you’ve been around closely held businesses long enough, you know that a transfer of money between a business and its owner, or between two related businesses, is sometimes characterized by the parties as a loan (“related...more

Freeman Law

Tax Court Has De Novo Review Over Tax-Related Passport Denial/Revocation Cases

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In a recent case of first impression, the U.S. Tax Court has held that it does not have to rely solely upon the administrative record in determining whether the IRS erroneously certified a taxpayer as having a seriously...more

Fenwick & West LLP

Tax Court Says AbbVie's $1.6B Break Fee Payment to Shire Properly Deducted as Ordinary Expense

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A break fee in a merger-gone-south can be deducted as an ordinary expense, the U.S. Tax Court held today, finding for biopharmaceutical giant AbbVie and rejecting the IRS’s argument that AbbVie must treat the fee as a capital...more

Proskauer - Tax Talks

The Tax Court in Soroban Holds that Limited Partners Were Too Active To Be Treated As “Limited Partners” and are Subject to...

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On May 28, 2025, in Soroban Capital Partners LP v. Commissioner (T.C. Memo 2025-52) (“Soroban II”), the Tax Court held the active role of limited partners in a fund manager caused them to fail to qualify as “limited partners”...more

Dorsey & Whitney LLP

The Supreme Court Update - June 12, 2025

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The Supreme Court of the United States issued six decisions today: Parrish v. United States, No. 24-275: This case addresses the procedural requirements for filing a notice of appeal after the original deadline to appeal...more

Stinson LLP

U.S. Tax Court Issues Ruling on Self-Employment Tax Exception for Limited Partners

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On Wednesday, May 28, the U.S. Tax Court ruled in Soroban Capital Partners LP v. Commissioner that a "functional analysis" test applies when determining whether a limited partner who contributes services to a partnership may...more

Freeman Law

Housing Allowance – What is a “Minister of the Gospel”?

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This Freeman Law Insights blog dives into what is a minister of the gospel for housing allowance and federal income tax purposes. Housing Allowances, Generally. Compensation for services rendered is generally...more

Morrison & Foerster LLP

Tax Court’s Decision in Soroban—Potential SECA Tax Implications for Management Fee Income

On May 28, 2025, the U.S. Tax Court issued its decision in Soroban Capital Partners LP v. Commissioner (T.C. Memo 2025-52) (“Soroban”), holding that “limited partners” of a management company organized as a Delaware limited...more

Hogan Lovells

The limited partner exception from self-employment taxes: Soroban II

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The latest chapter in the IRS attack on the use of a self-employment tax exception by fund managers came in the form of another Tax Court opinion last month in Soroban Capital Partners LP v. Commissioner (“Soroban II”) The...more

Rivkin Radler LLP

The Limited Partner Exclusion From Self-Employment Tax – But Who Is A Limited Partner?

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An Agency Under Siege - The mission statement of the IRS reminds taxpayers that it is their responsibility to understand and meet their tax obligations, while it is the role of the IRS to “enforce the [tax] law with...more

Husch Blackwell LLP

U.S. Tax Court Rules That Limited Partners of an Investment Manager Are Subject to Self-Employment Tax

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On May 28, 2025, the United States Tax Court held that the limited partners of a limited partnership providing investment management services to various investment funds were not limited partners within the meaning of...more

McDermott Will & Emery

IRS Roundup May 15 – June 2, 2025

Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for May 15, 2025 – June 2, 2025....more

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