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Regulatory and tax developments across IRS, state and local tax, DCAA and government contracting, offshore reporting and audit standards, with a link to our guidance on each.

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Feb 20, 2026State & local tax

Virginia moves to fixed-date IRC conformity and makes its PTET permanent

HB 29 conforms Virginia to the Internal Revenue Code as of December 31, 2025, adopts most 2025 federal changes, and removes the sunset on the elective pass-through entity tax. Virginia decouples from Section 174A R&E expensing, the Section 168(n) allowance, increased Section 179 limits and bonus depreciation.

Source: EY Tax News

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U.S. Tax Court

Latest Tax Court opinions, summarized

Every new T.C., memorandum and summary opinion, with the issue, the holding and why it matters.

2025–2026 lessonsAll case summaries
Charitable donations · Valuation

Murphy Hollow, LLC and Hales Gap, LLC v. Commissioner

T.C. Memo. 2026-115Nov 5, 2026MemorandumChief Judge UrdaDocket 9620-21
Issue
Two LLCs bought adjacent Tennessee tracts for roughly $1,350 an acre and, a year later, donated them and claimed deductions of $26.7 million and $19.4 million.
Holding
Both deductions were denied in full because neither entity obtained a qualified appraisal; the managers knew the appraiser would overstate value. The 40% gross valuation misstatement penalty applies, plus the 20% penalty on the remainder for Murphy Hollow.
Why it matters
A deduction can be lost entirely, not just reduced, when the people running the deal knew the appraisal was inflated.
Filing status · Child credits

Butler v. Commissioner

T.C. Memo. 2026-116Nov 5, 2026MemorandumJudge MarshallDocket 6448-24
Issue
A father claimed head of household status, the child tax credit and the earned income tax credit for two sons who were also claimed by their mother.
Holding
The court sustained the IRS: he did not show the children lived with him for more than half the year, so he could not claim them or head of household status. The IRS conceded the accuracy-related penalty.
Why it matters
Separated parents claiming the same children need records of where the children slept, night by night.
Unreported income · Schedule C

Pinckney v. Commissioner

T.C. Memo. 2026-113Nov 4, 2026MemorandumJudge MorrisonDocket 5050-19
Issue
A tax-preparation business owner's 2008 and 2009 returns were examined; the civil exam was suspended during criminal proceedings and later resumed.
Holding
The court sustained nearly all adjustments, including gross receipts of about $377,000 and $341,000 versus roughly $200,000 and $143,000 reported, disallowed cost of goods sold, and treated the business as a disregarded entity subject to self-employment tax. His procedural objections were rejected.
Why it matters
Bank deposits drive gross receipts; a civil case can resume years later after a criminal case.
Whistleblower awards

Bialer v. Commissioner

T.C. Memo. 2026-110Nov 4, 2026MemorandumJudge GustafsonDocket 6983-19W
Issue
A whistleblower challenged the IRS Whistleblower Office's denial of his award claim relating to dividend-withholding schemes.
Holding
The court denied his motions to add documents to the administrative record and granted summary judgment to the IRS, finding no abuse of discretion in the denial.
Why it matters
Whistleblower cases are reviewed on the administrative record, so the claim file has to be complete when it is submitted.

Official sources

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