On May 5, 2026, the Internal Revenue Service (“IRS”) released Revenue Procedure 2026-21 (the “Rev. Proc.”), which reinstates a program under which taxpayers may request private letter rulings (“PLRs”) on “significant issues” arising in certain corporate transactions[1] without asking the IRS to rule on the entire integrated transaction.[2]
In Liberty Global, the Tenth Circuit Leaves Taxpayers with an Opinion with Unresolved Questions
On April 21, 2026, in Liberty Global, Inc. v. United States, the Tenth Circuit held that the economic substance doctrine was “relevant” and applied to deny Liberty Global, Inc. a $2.4 billion deduction and imposed a 40% penalty with respect to a transaction known as “Project Soy”. The Tenth
Update: Federal Rulings Ease COVID‑Era Interest, Penalty and Filing Burdens
Update: The National Taxpayer Advocate has published a blog post urging taxpayers to evaluate whether they have claims for refund based on the recent Abdo and Kwong decisions. Importantly, the Taxpayer Advocate suggests that the argument for penalty and interest relief based on the COVID pandemic disaster declarations is
When a Misdirected Partnership Notice isn’t Fatal under the BBA: Mammoth Cave Property
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 the BBA, the IRS proposes partnership-level adjustments in a Notice of Proposed Partnership Adjustment (“NOPPA”) and later finalizes them in a Notice of Final Partnership Adjustment (“FPA”). If the IRS issues the FPA after the statute of limitations expires, the partnership can seek to invalidate it as untimely.
A reviewed Tax Court opinion filed March 9, 2026—Mammoth Cave Property, LLC v. Commissioner, No. 5401-24, 166 T.C. No. 4—shows the limits of “defective notice” arguments when the partnership actually received the NOPPA and participated in the process.
Federal Rulings Ease COVID‑Era Interest, Penalty and Filing Burdens
Relief from underpayment interest, failure-to-file penalties, and failure-to-pay penalties—as well as relief from IRS filing deadlines that arose during the COVID-19 pandemic—may be possible under two recent federal cases from the US Tax Court and the US Court of Federal Claims. Specifically, the recent Kwong decision indicates that the period of the COVID-19 federally declared disaster extended from January 20, 2020 to July 10, 2023. Filing deadlines that would have normally occurred and interest and penalties that would have normally accrued during this period may have been suspended under the reasoning articulated in Kwong. Taxpayer deadlines for seeking relief are fast approaching, and the time to review pandemic-era tax filings and tax accounts is now.
Recent Federal Privilege Ruling Related to AI Tools Has Implications for Routine Tax Advisor Arrangements
On February 10, 2026, Judge Jed Rakoff of the Southern District of New York ruled in United States v. Heppner that documents generated through a consumer version of Anthropic’s Claude AI were not protected by the attorney-client privilege or the work-product doctrine under the circumstances presented. The decision appears to be the first to squarely address privilege and work product claims arising from a non-lawyer’s use of a consumer-grade insecure, non-enterprise AI tool for “legal research,” as well as the potential consequences of inputting privileged information (provided to an individual by counsel) into an AI tool. However, putting the novelty of the AI context aside, Judge Rakoff grounded his analysis in traditional privilege principles: that disclosure of privileged communications to a third party in circumstances that undermine confidentiality (here, the corporation operating the AI tool) may result in waiver. And that an AI tool is just that – a tool, not an attorney. Accordingly, this decision reinforces the importance of only using properly secured AI tools with confidential or privileged information and for decisions about using AI in the privileged context to be made by those who best appreciate the risks involved: i.e., lawyers.
Fifth Circuit in Sirius Solutions Reverses Tax Court and Exempts Limited Partners from Self-Employment Tax
On January 16, 2026, in Sirius Solutions, L.L.L.P. v. Commissioner,[1] No. 24-60240 (5th Cir. Jan. 16, 2026), the U.S. Court of Appeals for the Fifth Circuit reversed the Tax Court and held that, for self-employment tax purposes, a “limited partner” means “a partner in a limited partnership that
How Relevant Is It? The Economic Substance Doctrine According to Liberty Global and Patel
I. Introduction
Should courts respect a transaction for tax purposes, when it otherwise complies with the technical requirements of the Internal Revenue Code and regulations? When should a court take the next step and consider the economic substance of a transaction and its motivations?
In two highly-awaited court decisions
Unsuccessful Taxpayer Change in Domicile from New York to Florida Shows that Courts will Follow the Money
Snowbirds, take notice. In October 2025, the New York State Tax Appeals Tribunal issued a decision regarding a couple’s claimed change in domicile from New York to Florida for the 2018 and 2019 tax years. Matter of Hoff and Ocorr-Hoff, DTA No. 850209 (N.Y.S. Tax Appeals Trib. Oct. 9, 2025)