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
Treasury and the IRS Release Final and Proposed Regulations on Section 892
I. Introduction
On December 15, 2025, the U.S. Department of the Treasury (“Treasury”) and the Internal Revenue Service (the “IRS”) published final regulations (the “Final Regulations”) and proposed regulations (the “Proposed Regulations”) under section 892.[1] The Final Regulations finalize, with modifications
Proposed Regulations Remove Look-Through Rule for Domestically Controlled REITs
I. Introduction
On October 20, 2025, the U.S. Department of the Treasury (“Treasury”) and the Internal Revenue Service (the “IRS”) issued proposed regulations (the “Proposed Regulations”) that would helpfully revoke the current “look-through rule” for domestic C corporation shareholders to determine whether a “real
California’s Franchise Tax Board Adopts Final Regulations for Market-Based Sourcing
On September 10, 2025, California’s Franchise Tax Board (“FTB”) adopted final regulations (“Final Regulations”) amending the rules regarding market-based sourcing for sales other than sales of tangible personal property. This brings to an end the FTB’s long-running process toward formally adopting the amendments first approved in
President Trump Signs One Big Beautiful Bill Act into Law
I. Introduction
On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (the “Act”) into law.[1] The Act is similar to the Senate Finance Committee’s draft legislative text (the “SFC Bill”) (released on June 16, 2025), with several modifications and omissions. The Act’s key differences from
Tax Court Breaks New Ground on the Deductibility of Termination Fees with AbbVie Ruling
On June 17, 2025, the Tax Court opinion in AbbVie Inc. and Subsidiaries v. Commissioner of Internal Revenue was issued,[1] holding that the approximately $1.6 billion termination fee AbbVie (a Delaware corporation) paid to its abandoned merger partner Shire plc (an Irish company) was properly an ordinary deductible business
The Tax Court in Soroban Holds that Limited Partners Were Too Active To Be Treated As “Limited Partners” and are Subject to Self-Employment Tax
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” for purposes of section 1402(a)(13) and, therefore, the limited
California FTB Releases Updated Proposed Regulations on Market-Based Sourcing Rules
On May 20, 2025, California’s Franchise Tax Board (“FTB”) released changes to the proposed regulations (“Draft Regulations”) that would amend the rules regarding market-based sourcing for sales other than sales of tangible personal property. This is the latest step by the FTB in the long-running process toward formally adopting the amendments first approved in 2016, which we described in a September 2024 blog post when FTB released an updated draft of the amendments.
One Big Beautiful Bill Passed by the House
On Thursday May 22, the House of Representatives passed the One Big Beautiful Bill Act (H.R. 1, hereafter the “Bill”). The Bill will now be considered by the U.S. Senate.
The following is a summary of some of the key provisions that have been changed from the version
One Big Beautiful Bill: Update on Provisions for Sports Industry
Update (7/11/2025): On July 4, 2025, President Trump signed the “One Big Beautiful Bill” Act (the “OBBBA”). Consistent with the earlier draft bill released by the Senate, the OBBBA did not include either of the two proposed changes that would have been particularly relevant for the sports industry