United States: Income Tax

The Fifth Circuit Court of Appeals has modified its stance on self-employment taxes for pass-through entity owners, moving from a simple liability-based test to a more nuanced "significance" test that examines an owner's involvement in business operations. This shift creates uncertainty for LLC and partnership owners who must now evaluate whether their management role is "significant" enough to trigger self-employment tax obligations, while traditional limited partners may still find safe harbor from these

The IRS has fundamentally transformed how it administers penalty relief for compliant taxpayers, replacing the decades-old First Time Abate program with an automatic system that eliminates the need for taxpayers to request relief they're entitled to receive.

The Treasury Department and IRS have issued Notice 2026-50, expanding the safe harbor for section 45Q carbon capture tax credits by extending Subpart RR reporting requirements to enhanced oil recovery projects and establishing a transition period tied to future guidance. This interim relief addresses critical gaps in the carbon capture regulatory framework while Treasury seeks public comment on permanent alternatives to EPA's Greenhouse Gas Reporting Program requirements.

The North Carolina Department of Revenue has issued guidance on three significant tax changes affecting individual and corporate income tax returns. These changes include new rules for domestic research and experimental expenditures, a special deduction for timber casualty losses from Hurricane Helene, and expanded gambling loss deductions. Understanding how these legislative updates impact your tax filing obligations and whether amended returns are necessary is crucial for compliance.

On June 16, 2026, Governor Pritzker signed Public Act 104-0468 into law. The Illinois Act makes two significant income tax changes: it decouples Illinois from the federal qualified small business stock (“QSBS”) gain exclusion under Code Section 1202 and further restricts the use of corporate net operating loss (“NOL”) carryover deductions.

The Treasury Department and IRS have released proposed regulations governing employer contributions to Trump accounts and employee pre-tax contributions through Trump Account Contribution Programs (TACPs). These regulations establish nondiscrimination requirements, contribution limits, and operational guidelines that employers must follow when implementing these tax-advantaged savings programs.

The IRS and Treasury Department have issued new guidance addressing how contributions to Trump Accounts are treated for federal gift tax purposes, creating a safe harbor for qualifying donors. Revenue Procedure 2026-25 establishes specific requirements that allow certain contributions to be treated as completed gifts of a present interest, eligible for the annual gift tax exclusion without requiring Form 709 filing. Understanding these requirements is critical for donors to ensure compliance and avoid unnec

The IRS has issued Notice 2026-40 to address the transition from the expiring Qualified Opportunity Zone program under the Tax Cuts and Jobs Act to the new framework established by the One Big Beautiful Bill Act of 2025. This guidance provides critical safe harbors and compliance pathways for investors and qualified opportunity zone businesses navigating the shift from QOZ 1.0 to QOZ 2.0, including specific relief for projects that began before 2026 but will continue development beyond the original program'

The One Big Beautiful Bill Act transformed Opportunity Zones into a permanent QOZ 2.0 planning tool with profound implications for entertainment industry professionals who generate irregular capital gains from catalog sales, business exits, and asset dispositions. This analysis examines the post-2026 mechanics, depreciation stacks, and California tax considerations that make QOZ 2.0 particularly relevant for talent, athletes, production companies, and catalog sellers navigating complex federal benefits alon