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2024 Post-Election Tax Policy Update

ACEs & the TRUTH about “Pennies on the Dollar” IRS Offer in Compromise (OIC) Promises.

Frank's Views:- Taxpayer Advocate's REAL Agenda. Is the Taxpayer Advocate's Office able to sustain taxpayers in maintaining reasonableness in our Tax Law Application?

Is the KENNY POA Case meant to send a message to us?

In these difficult economic times, can the Taxpayer Advocate still effectively aid TP's who believe they are being unjustly

treated ?

#A : In January 2012, The I.R.S. published the Highlights Of The TIGTA’s [Treasury Inspector General for Tax Administration] Report

On The Overall Independents Of Appeals, which said that one of his concerns was “The shifting of work from field operations to

[IRS] campus operations appears to affect the quality of appeals decisions due to the reduced number of face-to-face conferences,

a [IRS] campus environment is less conducive to a careful, candid assessment of the case, and taxpayers assigned to Appeals

campus sites might perceive they are receiving second-class treatment“.

Not surprisingly, the IRS' Findings were that the Appeals Employees "at both locations received similar training, and historical data establishes that more and more taxpayers/represent is prefer telephone conferences over the traditional face-to-face conferences due to the time saved … However, Appeals will continue to monitor…“

FRANK’s (& Apparently The National Taxpayer Advocate's) VIEW: In my considerable experience, I have always found that a

properly documented face-to-face meeting was infinitely more factually productive than a potentially quickly disposed of telephone

conference (even when I was the IRS Appeals Officer). WHAT HAS YOUR EXPERIENCE SHOWN ???

#B: July 19, 2012 in Kenny v. U.S., 2012 PTC 205 (3d Cir. 7/19/2012) District Court found: From 2004 to 2007, Robert Kenny, a Tax Attorney [POA] authorized to practice before the IRS, filed three administrative complaints with the Treasury Inspector General for Tax Administration (TIGTA) against IRS Collection Officer (R/O) Steven Wald, alleging interference with taxpayers' representation.

The TIGTA sent them to the R/O's Supervisor, who dismissed them, and per the POA recommended that the R/O file a practitioner misconduct complaint against the POA, which he did.The Office of Professional Responsibility (OPR) then opened an investigation into the POA's potential misconduct, and found the POA had filed late twice, without an extension. In May 2008, it sent POA a letter alleging he committed misconductunder Circular 230, Section 10.51(a) by

failing to file timely returns, and
by giving false information and attempting to coerce an IRS officer through false accusations in connection with his complaints against The R/O.

In August 2008, POA filed suit in a District Court seeking monetary and injunctive relief, alleging

(1) retaliation in violation of Code Sec. 7804,

(2) an unauthorized collection action in violation of Code Sec. 7433,

(3) unauthorized inspections of return information in violation of Code Sec. 7431, and

(4) violation of his First and Fourth Amendment rights.

The District Court dismissed all counts. After numerous procedural filings and hearing, POA appealed to the Third Circuit, citing Code Sec. 7431, and asked for damages under Bivens v. Six Unknown Named Agents of Fed. Bureau of Narcotics, 403 U.S. 388 (1971) (i.e., Bivens).

Under Code Sec. 7431, a taxpayer can sue for damages for unauthorized access to tax return information. To establish a claim, a taxpayer must demonstrate

(1) a violation of Code Sec. 6103 which specifies that tax returns and return information are confidential and bars disclosure by U.S. employees, but provides a number of exceptions. One permits inspection by, or disclosure of returns to, officers and employees of the Treasury Department

whose official duties require such inspection or disclosure for tax administration purposes, another,
For use in any action or proceeding relating to legal practice before the Department is permitted to the extent necessary to advance or protect the interests of the United Statesand

(2) that the violation resulted from knowing or negligent conduct.

The Third Circuit affirmed the District Court because

the OPR is responsible for matters related to POA conduct and discipline, including disciplinary proceedings and sanctions under Section 10.1(a)(1) of Circular 230, and
because POA's failure to comply with federal tax law, including late filing, could constitute disreputable conduct subject to sanction and disbarment under Section 10.51(a)(6) of Circular 230,

the investigation of POA's returns by OPR employees fell within their official tax administration duties under Code Sec. 6103(h).

The Court stated, the investigation was permitted under Code Sec. 6103(l)(4)(B) because OPR employees investigated POA's returns in preparation for a proceeding under 31 U.S.C. Section 330(b) to suspend disbar . . . or censure a representative who . . . is disreputable.

The Court noted that POA suggested that because the OPR employees acted with a retaliatory motive, they could not have acted within the scope of their official duties. However, the Court observed, the plain text of Code Sec. 6103 does not provide such a limitation. It also noted that, in CCM 201001019, the IRS Chief Counsel has suggested that compliance checks on practitioners by IRS Collection employees may exceed their official duties.

With respect to POA's Bivens claim, the Court noted that the provisions governing potential disbarment or suspension before the IRS create a comprehensive remedial scheme for addressing allegations of practitioner misconduct, including any constitutional concerns raised by practitioners.

Since Congress and the Treasury Department elected to provide this manner to regulate the relationship between IRS and POAs, the Court declined to infer a Bivens remedy in this instance.

The Fact that OPR Employees Acted with a Retaliatory Motive Didn't Mean They Weren't Acting Within Scope of Official Duties. Thus, the investigation of a tax attorney's returns after he filed complaints against an IRS Revenue Officer did not violate Code Sec. 6103 thus were not unconstitutional.

EMAIL US YOUR VIEWS OF THE PROFESSIONALISM (OR LACK THEREOF) OF THE PARTIES INVOLVED.

#C: On January 11, 2012 the IRS issued IR-2012-6 entitled “National Taxpayer Advocate Delivers Annual Report to Congress; Focuses on

IRS Taxpayer Rights” in which she predicted certain concerns, including her continuing concern that the

IRS’s expanding use of automated processes to adjust tax liabilities is causing harm to taxpayers”…

“TAXPAYER BILL OF RIGHTS The report urges Congress to codify a Taxpayer Bill of Rights that would clearly list the major rights and responsibilities of taxpayers. ‘The U.S. tax system is based on a social contract between the government and its taxpayers,’ [She] wrote. “Taxpayers agree to report and pay the taxes they owe and the government agrees to provide the service and oversight necessary to ensure that taxpayers can and will do so.”

It also states: “The IRS’s current examination strategy that discusses the IRS’s increasing use of automated

procedures not technically classified as audits to adjust tax liabilities. The report argues that these

procedures deprive taxpayers of traditional audit rights and make it difficult for taxpayers to

discuss their cases directly with an IRS examiner”.

YOUR VIEW?:

When I was assigned to Miami, decades ago several times I met Nancy Olson, in passing. This

was before she founded the Taxpayer Advocates' Office. While I am not in the habit of touting

services the IRS may (rightfully) provide, recognizing that the excessiveuse of power, per some

complicated, irrational perversion of Tax Law can convert compliant taxpayers into protesters,

I was impressed, even then, by Nancy’s intense motivation, and fighting spirit. Through the

years she has waged an uphill battle FOR our Clients, despite conversion of line authority to staff

authority, decreasing her budget, and every other conceivable obstacle set in her way, She still

has the courage to face-down the IRS, and report to Congress "Telling It like it is". Thus I

believe her Taxpayers Advocates Office is the best (& perhaps smartest) thing for public

relations the I.R.S. has ever done, to assure Taxpayers that some degree of reasonableness may

still sometimes be heard, despite the limitless power the IRS wields.

Much More importantly, however, are your views!

How do you, as reputable tax preparers & representatives feel about the above items ?

Now that Government is energetically seeking funds, is the Kenny case meant to modify your

representation zeal, or just Coincidencidental? Will it affect your Client Representation efforts?

Share your thoughts at Frank@CPA–xIRS.com; & we will publish some of the more interesting

comments, anonymously.

Your viewpoint is sought!

Supreme Court Rules Tax Court Lacks Jurisdiction Where IRS Withdraws Levy (Commissioner v. Zuch, SCt.)

The U.S. Tax Court lacks jurisdiction over a taxpayer’s appeal of a levy in a collection due process hearing when the IRS abandoned its levy because it applied the taxpayer’s later year overpayments to her earlier tax liability, eliminating the underpayment on which the levy was based. The 8-1 ruling by the Court resolves a split between the Third Circuit and the Fourth and D.C. Circuit.

The IRS determined that taxpayer had a tax liability for 2010 and began a levy procedure. The taxpayer appealed the levy in a collection due process hearing, and then appealed that adverse result in the Tax Court. The taxpayer asserted that she did not have an underpayment in 2010 because her then-husband had made $50,000 of estimated tax payments for 2010 with instructions that the amounts be applied to the taxpayer’s separate 2010 return. The IRS instead applied the payments to the husband’s separate account. While the agency and Tax Court proceedings were pending, the taxpayer filed several tax returns reflecting overpayments, which she wanted refunded to her. The IRS instead applied the taxpayer’s 2013-2016 and 2019 tax overpayments to her 2010 tax debt.

When the IRS had applied enough of the taxpayer’s later overpayments to extinguish her 2010 liability, the IRS moved to dismiss the Tax Court proceeding as moot, asserting that the Tax Court lacked jurisdiction because the IRS no longer had a basis to levy. The Tax Court agreed. The taxpayer appealed to the Third Circuit, which held for the taxpayer that the IRS’s abandonment of the levy did not moot the Tax Court proceedings. The IRS appealed to the Supreme Court, which reversed the Third Circuit.

The Court, in an opinion written by Justice Barrett in which seven other justices joined, held that the Tax Court, as a court of limited jurisdiction, only has jurisdiction under Code Sec. 6330(d)(1) to review a determination of an appeals officer in a collection due process hearing when the IRS is pursuing a levy. Once the IRS applied later overpayments to zero out the taxpayer’s liability and abandoned the levy process, the Tax Court no longer had jurisdiction over the case. Justice Gorsuch dissented, pointing out that the Court’s decision leaves the taxpayer without any resolution of the merits of her 2010 tax liability, and “hands the IRS a powerful new tool to avoid accountability for its mistakes in future cases like this one.”

Zuch, SCt

IRS Collects More Than $5 Trillion In 2024 (IR 2025-63)

The Internal Revenue Service collected more than $5.1 trillion in gross receipts in fiscal year 2024. It is the first time the agency broke the $5 trillion mark, according to the 2024 Data Book, an annual publication that reviews IRS activities for the given fiscal year.

The Internal Revenue Service collected more than $5.1 trillion in gross receipts in fiscal year 2024.

It is the first time the agency broke the $5 trillion mark, according to the 2024 Data Book, an annual publication that reviews IRS activities for the given fiscal year. It was an increase over the $4.7 trillion collected in the previous fiscal year.

Individual tax, employment taxes, and real estate and trust income taxes accounted for $4.4 trillion of the fiscal 2024 gross collections, with the balance of $565 billion coming from businesses. The agency issued $120.1 billion in refunds, including $117.6 billion in individual income tax refunds and $428.4 billion in refunds to businesses.

The 2024 Data Book broke out statistics from the pilot year of the Direct File program, noting that 423,450 taxpayers logged into Direct File, with 140,803 using the program, which allows users to prepare and file their tax returns through the IRS website, to have their tax returns filed and accepted by the agency. Of the returns filed, 72 percent received a refund, with approximately $90 million in refunds issued to Direct File users. The IRS had gross collections of nearly $35.3 million (24 percent of filers using Direct File). The rest had a return with a $0 balance due.

Among the data highlighted in this year’s publication were service level improvements.

"The past two filing seasons saw continued improvement in IRS levels of service—one the phone, in person, and online—thanks to the efforts of our workforce and our use of long-term resources provided by Congress," IRS Acting Commissioner Michael Faulkender wrote. "In FY 2024, our customer service representatives answered approximately 20 million live phone calls. At our Taxpayer Assistance Centers around the country, we had more than 2 million contacts, increasing the in-person help we provided to taxpayers nearly 26 percent compared to FY 2023."

On the compliance side, the IRS reported in the 2024 Data Book that for all returns filed for Tax Years 2014 through 2022, the agency "has examined 0.40 percent of individual returns filed and 0.66 percent of corporation returns filed, as of the end of fiscal year 2024."

This includes examination of 7.9 percent of taxpayers filing individual returns reporting total positive incomes of $10 million or more. The IRS collected $29.0 billion from the 505,514 audits that were closed in FY 2024.

By Gregory Twachtman, Washington News Editor

IR-2025-63

Change of Accounting Method Procedures Updated (Rev. Proc. 2025-23)

The IRS has released guidance listing the specific changes in accounting method to which the automatic change procedures set forth in Rev. Proc. 2015-13, I.R.B. 2015- 5, 419, apply. The latest guidance updates and supersedes the current list of automatic changes found in Rev. Proc. 2024-23, I.R.B. 2024-23.

Significant changes to the list of automatic changes made by this revenue procedure to Rev. Proc. 2024-23 include:

(1) Section 6.22, relating to late elections under § 168(j)(8), § 168(l)(3)(D), and § 181(a)(1), is removed because the section is obsolete;
(2) The following paragraphs, relating to the § 481(a) adjustment, are clarified by adding the phrase “for any taxable year in which the election was made” to the second sentence: (a) Paragraph (2) of section 3.07, relating to wireline network asset maintenance allowance and units of property methods of accounting under Rev. Proc. 2011-27; (b) Paragraph (2) of section 3.08, relating to wireless network asset maintenance allowance and units of property methods of accounting under Rev. Proc. 2011-28; and (c) Paragraph (3)(a) of section 3.11, relating to cable network asset capitalization methods of accounting under Rev. Proc. 2015-12;
(3) Section 6.04, relating to a change in general asset account treatment due to a change in the use of MACRS property, is modified to remove section 6.04(2)(b), providing a temporary waiver of the eligibility rule in section 5.01(1)(f) of Rev. Proc. 2015-13, because the provision is obsolete;
(4) Section 6.05, relating to changes in method of accounting for depreciation due to a change in the use of MACRS property, is modified to remove section 6.05(2) (b), providing a temporary waiver of the eligibility rule in section 5.01(1)(f) of Rev. Proc. 2015-13, because the provision is obsolete;
(5) Section 6.13, relating to the disposition of a building or structural component (§ 168; § 1.168(i)-8), is clarified by adding the parenthetical “including the taxable year immediately preceding the year of change” to sections 6.13(3)(b), (c), (d), and (e), regarding certain covered changes under section 6.13;
(6) Section 6.14, relating to dispositions of tangible depreciable assets (other than a building or its structural components) (§ 168; § 1.168(i)-8), is clarified by adding the parenthetical “including the taxable year immediately preceding the year of change” to sections 6.14(3)(b), (c), (d), and (e), regarding certain covered changes under section 6.14; June 9, 2025 1594 Bulletin No. 2025–24;
(7) Section 7.01, relating to changes in method of accounting for SRE expenditures, is modified as follows. First, to remove section 7.01(3)(a), relating to changes in method of accounting for SRE expenditures for a year of change that is the taxpayer’s first taxable year beginning after December 31, 2021, because the provision is obsolete. Second, newly redesignated section 7.01(3)(a) (formerly section 7.01(3)(b)) is modified to remove the references to a year of change later than the first taxable year beginning after December 31, 2021, because the language is obsolete;
(8) Section 12.14, relating to interest capitalization, is modified to provide under section 12.14(1)(b) that the change under section 12.14 does not apply to a taxpayer that wants to change its method of accounting for interest to apply either: (1) current §§ 1.263A-11(e)(1)(ii) and (iii); or (2) proposed §§ 1.263A-8(d)(3) and 1.263A-11(e) and (f) (REG-133850-13), as published on May 15, 2024 (89 FR 42404) and corrected on July 24, 2024 (89 FR 59864);
(9) Section 15.01, relating to a change in overall method to an accrual method from the cash method or from an accrual method with regard to purchases and sales of inventories and the cash method for all other items, is modified by removing the first sentence of section 15.01(5), disregarding any prior overall accounting method change to the cash method implemented using the provisions of Rev. Proc. 2001-10, as modified by Rev. Proc. 2011- 14, or Rev. Proc. 2002-28, as modified by Rev. Proc. 2011-14, for purposes of the eligibility rule in section 5.01(e) of Rev. Proc. 2015-13, because the language is obsolete;
(10) Section 15.08, relating to changes from the cash method to an accrual method for specific items, is modified to add new section 15.08(1)(b)(ix) to provide that the change under section 15.08 does not apply to a change in the method of accounting for any foreign income tax as defined in § 1.901-2(a);
(11) Section 15.12, relating to farmers changing to the cash method, is clarified to provide that the change under section 15.12 is only applicable to a taxpayer’s trade or business of farming and not applicable to a non-farming trade or business the taxpayer might be engaged in;
(11) Section 12.01, relating to certain uniform capitalization (UNICAP) methods used by resellers and reseller-producers, is modified as follows. First, to provide that section 12.01 applies to a taxpayer that uses a historic absorption ratio election with the simplified production method, the modified simplified production method, or the simplified resale method and wants to change to a different method for determining the additional Code Sec. 263A costs that must be capitalized to ending inventories or other eligible property on hand at the end of the taxable year (that is, to a different simplified method or a facts-and-circumstances method). Second, to remove the transition rule in section 12.01(1)(b)(ii)(B) because this language is obsolete;
(12) Section 15.13, relating to nonshareholder contributions to capital under § 118, is modified to require changes under section 15.13(1)(a)(ii), relating to a regulated public utility under § 118(c) (as in effect on the day before the date of enactment of Public Law 115-97, 131 Stat. 2054 (Dec. 22, 2017)) (“former § 118(c)”) that wants to change its method of accounting to exclude from gross income payments or the fair market value of property received that are contributions in aid of construction under former § 118(c), to be requested under the non-automatic change procedures provided in Rev. Proc. 2015- 13. Specifically, section 15.13(1)(a)(i), relating to a regulated public utility under former § 118(c) that wants to change its method of accounting to include in gross income payments received from customers as connection fees that are not contributions to the capital of the taxpayer under former § 118(c), is removed. Section 15.13(1)(a)(ii), relating to a regulated public utility under former § 118(c) that wants to change its method of accounting to exclude from gross income payments or the fair market value of property received that are contributions in aid of construction under former § 118(c), is removed. Section 15.13(2), relating to the inapplicability of the change under section 15.13(1) (a)(ii), is removed. Section 15.13(1)(b), relating to a taxpayer that wants to change its method of accounting to include in gross income payments or the fair market value of property received that do not constitute contributions to the capital of the taxpayer within the meaning of § 118 and the regulations thereunder, is modified by removing “(other than the payments received by a public utility described in former § 118(c) that are addressed in section 15.13(1)(a)(i) of this revenue procedure)” because a change under section 15.13(1)(a)(i) may now be made under newly redesignated section 15.13(1) of this revenue procedure;
(13) Section 16.08, relating to changes in the timing of income recognition under § 451(b) and (c), is modified as follows. First, section 16.08 is modified to remove section 16.08(5)(a), relating to the temporary waiver of the eligibility rule in section 5.01(1)(f) of Rev. Proc. 2015-13 for certain changes under section 16.08, because the provision is obsolete. Second, section 16.08 is modified to remove section 16.08(4)(a)(iv), relating to special § 481(a) adjustment rules when the temporary eligibility waiver applies, because the provision is obsolete. Third, section 16.08 is modified to remove sections 16.08(4)(a) (v)(C) and 16.08(4)(a)(v)(D), providing examples to illustrate the special § 481(a) adjustment rules under section 16.08(4)(a) (iv), because the examples are obsolete;
(14) Section 19.01, relating to changes in method of accounting for certain exempt long-term construction contracts from the percentage-of-completion method of accounting to an exempt contract method described in § 1.460-4(c), or to stop capitalizing costs under § 263A for certain home construction contracts, is modified by removing the references to “proposed § 1.460-3(b)(1)(ii)” in section 19.01(1), relating to the inapplicability of the change under section 19.01, because the references are obsolete;
(15) Section 19.02, relating to changes in method of accounting under § 460 to rely on the interim guidance provided in section 8 of Notice 2023-63, 2023-39 I.R.B. 919, is modified to remove section 19.02(3)(a), relating to a change in the treatment of SRE expenditures under § 460 for the taxpayer’s first taxable year beginning after December 31, 2021, because the provision is obsolete;
(16) Section 20.07, relating to changes in method of accounting for liabilities for rebates and allowances to the recurring item exception under § 461(h)(3), is clarified by adding new section 20.07(1)(b) (ii), providing that a change under section 20.07 does not apply to liabilities arising from reward programs;
(17) The following sections, relating to the inapplicability of the relevant change, are modified to remove the reference to “proposed § 1.471-1(b)” because this reference is obsolete: (a) Section 22.01(2), relating to cash discounts; (b) Section 22.02(2), relating to estimating inventory “shrinkage”; (c) Section 22.03(2), relating to qualifying volume-related trade discounts; (d) Section 22.04(1)(b)(iii), relating to impermissible methods of identification and valuation of inventories; (e) Section 22.05(1)(b)(ii), relating to the core alternative valuation method; Bulletin No. 2025–24 1595 June 9, 2025 (f) Section 22.06(2), relating to replacement cost for automobile dealers’ parts inventory; (g) Section 22.07(2), relating to replacement cost for heavy equipment dealers’ parts inventory; (h) Section 22.08(2), relating to rotable spare parts; (i) Section 22.09(3), relating to the advanced trade discount method; (j) Section 22.10(1)(b)(iii), relating to permissible methods of identification and valuation of inventories; (k) Section 22.11(2), relating to a change in the official used vehicle guide utilized in valuing used vehicles; (l) Section 22.12(2), relating to invoiced advertising association costs for new vehicle retail dealerships; (m) Section 22.13(2), relating to the rolling-average method of accounting for inventories; (n) Section 22.14(2), relating to sales-based vendor chargebacks; (o) Section 22.15(2), relating to certain changes to the cost complement of the retail inventory method; (p) Section 22.16(2), relating to certain changes within the retail inventory method; and (q) Section 22.17(1)(b)(iii), relating to changes from currently deducting inventories to permissible methods of identification and valuation of inventories; and
(18) Section 22.10, relating to permissible methods of identification and valuation of inventories, is modified to remove section 22.10(1)(d).

Subject to a transition rule, this revenue procedure is effective for a Form 3115 filed on or after June 9, 2025, for a year of change ending on or after October 31, 2024, that is filed under the automatic change procedures of Rev. Proc. 2015-13, 2015-5 I.R.B. 419, as clarified and modified by Rev. Proc. 2015-33, 2015-24 I.R.B. 1067, and as modified by Rev. Proc. 2021-34, 2021-35 I.R.B. 337, Rev. Proc. 2021-26, 2021-22 I.R.B. 1163, Rev. Proc. 2017-59, 2017-48 I.R.B. 543, and section 17.02(b) and (c) of Rev. Proc. 2016-1, 2016-1 I.R.B. 1 .

Rev. Proc. 2025-23

Additional Transition Relief Provided for Brokers Required to File Form 1099-DA (Notice-2025-33; IR-2025-67)

The Treasury Department and IRS have issued Notice 2025-33, extending and modifying transition relief for brokers required to report digital asset transactions using Form 1099-DA, Digital Asset Proceeds From Broker Transactions. The notice builds upon the temporary relief previously provided in Notice 2024-56 and allows additional time for brokers to comply with reporting requirements.

Reporting Requirements and Transitional Relief

In 2024, final regulations were issued requiring brokers to report digital asset sale and exchange transactions on Form 1099-DA, furnish payee statements, and backup withhold on certain transactions beginning January 1, 2025. Notice 2024-56 provided general transitional relief, including limited relief from backup withholding for certain sales of digital assets during 2026 for brokers using the IRS’s TIN-matching system in place of certified TINs.

Additional Transition Relief from Backup Withholding, Customers Not Previously Classified as U.S. Persons

Under Notice 2025-33, transition relief from backup withholding tax liability and associated penalties is extended for any broker that fails to withhold and pay the backup withholding tax for any digital asset sale or exchange transaction effected during calendar year 2026.

Brokers will not be required to backup withhold for any digital asset sale or exchange transactions effected in 2027 when they verify customer information through the IRS Tax Information Number (TIN) Matching Program. To qualify, brokers must submit a customer's name and tax identification number to the matching service and receive confirmation that the information corresponds with IRS records.

Additionally, penalties that apply to brokers that fail to withhold and pay the full backup withholding due are limited with respect to any decrease in the value of received digital assets between the time of the transaction giving rise to the backup withholding obligation and the time the broker liquidates 24 percent of a customer’s received digital assets.

Finally, the notice also provides additional transition relief for brokers for sales of digital assets effected during calendar year 2027 for certain preexisting customers. This relief applies when brokers have not previously classified these customers as U.S. persons and the customer files contain only non-U.S. residence addresses.

Notice 2025-33

IR-2025-67

Tax Court Lacked Jurisdiction as IRS Failed to Establish Valid Notice of Deficiency (Cano, TCM)

The IRS failed to establish that it issued a valid notice of deficiency to an individual under Code Sec. 6212(b). Thus, the Tax Court dismissed the case due to lack of jurisdiction.

TEFRA Partnership not Entitled to Exclude Partners’ Distributive Shares from Self-Employment Income (Soroban Capital Partners LP, TCM)

A limited partnership classified as a TEFRA partnership was not entitled to exclude its limited partners’ distributive shares from net earnings from self-employment under Code Sec. 1402(a)(13). The Tax Court found that the individuals materially participated in the partnership’s investment management business and were not acting as limited partners “as such.”