Key Takeaways
- Tax Law Messaging
- Trump IRS Suit
- Federal Funds Stuck in Court
- IRS Leadership
- Tax Pro Accounts
- Tariffs and the Like
- Umbrellas
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Tax Law Messaging
House GOP Turns to Business Allies to Sell Tax Bill to Voters – Kate Ackley, Bloomberg ($):
McClain is stepping up outreach to business lobbies and conservative groups as part of an effort to sell Republicans’ signature tax law to voters in the midterm messaging contest. She and her team assembled what they dubbed “coalitions row” on Feb. 6 in the Capitol Hill room to connect House Republicans with outside groups supporting the mega tax-and-spending law.
Both parties will spotlight the legislation on the campaign trail — and the one successful in selling or bashing it could gain advantage in the tight battle for control of the House.
Trump IRS Suit
Trump’s $10B IRS Suit Over Tax Data Leaks Raises Legal Issues – Tim Shaw, Checkpoint News:
The January 29 complaint comes in the wake of the criminal conviction of former IRS contractor Charles Littlejohn, who is serving a five-year prison sentence for leaking the tax data of thousands of Americans to news organizations.
Federal Funds Stuck in Court
Trump’s Grip on Billions of Taxpayer Dollars Loosened by Courts – Zoe Tillman, Bloomberg ($):
By the start of 2026, US judges had halted his funding cuts and limits, or the government took steps to resolve issues after being sued, in more than half of 167 spending fights reviewed by Bloomberg News as of Jan. 16. The Justice Department is pressing dozens of appeals, including over a judge’s order unfreezing funds for the $16 billion Gateway rail tunnel between Democrat-led New York and New Jersey.
The rulings against the government underscore how the legal system has persisted as a road block — or at the very least a speed bump — to Trump’s second-term agenda. The administration has faced more than 700 lawsuits so far, according to Bloomberg’s review. The grind of court process has at times slowed officials’ pace and pried loose information. Some judicial blocks have been temporary or narrow, while others are sweeping in scope.
IRS Leadership
Meet the New IRS Executives in a Shrunken Leadership Circle – Erin Schilling & Erin Slowey, Bloomberg ($):
The overhaul outlined last month by IRS CEO Frank Bisignano fills many vacant and acting positions and comes at the start of tax filing season, which will serve as an important test for the agency shrunken by the Trump administration and implementing the massive GOP tax law.
In the most critical and outward-facing parts of the IRS, the roster is deep. Seasoned officials—including National Taxpayer Advocate Erin Collins, Chief of Taxpayer Services Ken Corbin, and Chief Information Officer Kaschit Pandya—remain.
Tax Pro Accounts
IRS broadens Tax Pro Account for accounting firms and others – Martha Waggoner, The Tax Adviser:
The enhancements give tax professional businesses that serve larger numbers of taxpayers more control over their centralized authorization file (CAF) relationship. With the new features, the IRS said, firms can set employee access levels, review client information tied to active authorizations, and withdraw authorizations directly through the platform.
Tariffs and the Like
Trump Threatens to Block Detroit-Canada Bridge in New Row – Thomas Seal & Jennifer A. Dlouhy, Bloomberg ($):
…
It’s due to be the largest Canadian port on the US-Canada border, according to the US Department of Transportation. It was fully financed by the Canadian government at an estimated cost of C$6.4 billion ($4.7 billion). Those costs are to be repaid over time with tolls.
Air Canada Halts Service to Cuba After US Pressure Cuts Off Fuel – Stephen Wicary & Mathieu Dion, Bloomberg ($):
The communist government warned international airlines they can no longer refuel at its main airport in Havana for the next month after Donald Trump threatened tariffs on any nation that supplies Cuba with oil. A-1 jet fuel won’t be available at Jose Marti International Airport beginning Tuesday through March 11, the Federal Aviation Administration said in a notice Sunday.
Tax Filing Woes
How to Handle Missing Forms W-2 and Forms 1099 – Parker Tax Pro Library:
The due date for employers to submit Forms W-2 to the Social Security Administration (SSA) and to employees is February 2, 2026, and the date for payors to submit Forms 1099 to payees is also February 2, 2026. Penalties are stiff for employers and payors who don't provide these forms on time and grow stiffer as time goes on.
In the Courts
9th Circ. Backs Comerica's Escape From Investor Suit – Sydney Price, Law 360 ($):
According to the opinion issued by the three-judge panel Friday, none of the alleged corrective disclosures identified by Nova Scotia Health Employees' Pension Plan establish loss causation.
The pension plan sued in 2023 after American Banker, a financial services industry trade publication, reported issues with two vendors handling Direct Express operations and the company stock price fell, costing the pension approximately $300,000, according to the suit. The pension sought to represent a proposed class of investors.
Ruling That Separated Wife Didn’t Abandon S Corp Interest Upheld – Trevor Sikes, Tax Notes ($). “The Tax Court properly held that a separated spouse didn’t abandon her co-ownership interest in an S corporation because she actively pursued her interest during her husband’s bankruptcy proceedings, according to a federal appellate court.”
Suspected AI-Hallucinated Case Cites Doom Tax Court Argument – Kristen A. Parillo, Tax Notes ($). “A California restaurant owner’s argument that IRS deficiency notices must be manually signed collapsed “like an overmixed souffle” when the Tax Court discovered that his attorney apparently used fabricated case cites to prop it up.”
Tax Court Upholds IRS Deficiency Over Restaurant Receipts – Anna Scott Farrell, Law 360 ($). “A deceased attorney and his wife underreported income from a family restaurant business and failed to back up depreciation deductions they claimed for two rental properties, the U.S. Tax Court ruled Monday, sustaining most of the findings of the Internal Revenue Service.”
Calif. Woman Owes Refund For Health Credits, Tax Court Says – Kat Lucero, Law 360 ($). “A California woman was well above the income threshold to be a recipient of more than $11,000 in tax credits intended to be used for low-income individuals to purchase healthcare through the federal marketplace, a special U.S. Tax Court trial judge said Monday.”
Seventh Circuit Dismisses IRS’s $1.6B Merger Break Fee Appeal – Amanda Athanasiou, Tax Notes ($). “After numerous delays to the start of Seventh Circuit litigation concerning the tax treatment of the headline-making, $1.6 billion merger termination fee AbbVie paid in 2014, the IRS agreed to abandon the action.”
Tax Court Says Rancher Isn't Hobbyist, Can Deduct Expenses – Kevin Pinner, Law 360 ($). “A Texas rancher can deduct more than $205,000 in farm expenses the IRS said were not linked to a for-profit activity after the U.S. Tax Court ruled Monday that he was trying to run a bona fide ranching business even though it wasn't profitable.”
Cattle Biz on Generational Ranch Had Profit Motive, Court Finds – Nathan J. Richman, Tax Notes ($). “A taxpayer developing a beef cattle herd on land that had been in his family for over 100 years was serious about ranching and so could fully deduct his related expenses, the Tax Court concluded.”
What Day is it?
It’s National Umbrella Day! What better day for a gratuitous photograph of my dog in a raincoat. Enjoy, and stay dry out there!
Make a habit of sustained success.
