IRB 2026-29 (Announcement 2026-11) set the business standard mileage rate for the second half of 2026 at 76 cents per mile.

Rev. Proc. 2026-25 provides a gift tax reporting safe harbor for certain Trump Account contributions.

Eiler v. Comm., 167 T.C. No. 3 T(2026)

Comm. v. Banks, 543 U.S. 426 (2005)

Treasury Press Release sb0563: Treasury Announces Frank Bisignano to Lead Next Phase of Trump Accounts Expansion

Piton Holdings LLC v. Comm., 167 T.C. No. 4 (2026)

AEP Replaces First Time Abate: IR-2026-83

Tax in Action 21: “You Can’t Delegate Filing Deadlines”

Hough Beck & Baird, Inc. v. Comm., 167 T.C. 2

Opportunity zone transitional guidance: Notice 2026-40

IRS Security Summit

Trump Accounts app launch

First-year Working Families Tax Cuts data

Trump Accounts philanthropic stock contributions

Trump Account Investment lineup

John R. Dee v. Comm., 167 T.C. No. 1

Ways & Means Chair’s statement

REG-113229-25 hearing notice

OPR Alert 2026-19 Introductory Guidelines for Responsible AI Use in Federal Tax Practice

Tom Gorczynski, EA, USTCP and John Youngblood, EA, “OPR Issues Guidance on Practitioner Use of AI”

IRB 2026-26, containing Notice 2026-36: Notice of Intent to Issue Regulations Under Section 4960

Sundancer Pools v. United States (No. 25-1291T)

• CourtListener

• Tax in Action #2 Cracking the R&D Tax Credit Code: Section 41 Explained

Branch v. Commissioner, T.C. Memo. 2026-51

• CourtListener

ETAAC 2026 Annual Report

• IR-2026-77

2027 HSA Limits (Rev. Proc. 2026-24)

• IRB 2026-25

• IR-2026-76

Schumacher v. Comm., T.C. Memo. 2026-47

• CourtListener

Wells v. Comm., T.C. Memo. 2026-49

• CourtListener

House Ways & Means Crypto Tax Hearing

• Crypto Briefing overview

• CoinDesk hearing recap

Kwong July 10 Deadline

• National Taxpayer Advocate Blog

Business Use of Automobiles

NAEA Solutions Room, delivered June 4

This one’s done, but if you missed it, the recording is available on demand through NAEA. As the title implies, this 1 CE course covered a lot, including deductible and nondeductible trips, actual expense vs. standard mileage rates, §179 and bonus depreciation, substantiation requirements, and how different entity types can affect the deduction. (I’m told this course may have set a record for the number of registrants.)

NAEA Tax Summit

New Orleans, LA, July 27–29

I’m doing three sessions at Tax Summit this year (which either means I’m in demand or bad at saying no; probably both).

QBID: What Practitioners Need to Know

This one goes deep on §199A — qualified business income, the W-2 wage and capital limitations, specified service trades or businesses, and the aggregation rules that most preparers either ignore or over-apply. Expect a faster pace and more case-study-heavy content than you’d find in a typical survey course.

Operating Agreements and S Corporations

LLC operating agreements contain a lot of important tax-relevant provisions. Tax professionals should be comfortable reading, reviewing, and discussing these provisions with their clients. Also, a poorly-written operating agreement and an S election can be a surprisingly dangerous combination. This course covers the opportunities and traps, including distribution regimes, election mechanics, and multi-member issues that tend to surface at the worst possible moment.

Practice Management Panel

I’m also participating in a practice management panel. Details to come, but if you’re at the conference, come by. The conversation should be more candid than the typical CE format.

Understanding the §199A Deduction: A Practitioner’s Guide to Reviewing Form 8995

NAEA Solutions Room (webinar), September 24

This webinar will help you confidently review a completed Form 8995. Starting with what the deduction is and how it’s calculated, we’ll work through Form 8995 line by line so you know what each number represents, where it came from, and what should make you stop and ask questions. By the end, you should be able to review any client’s §199A calculation with confidence. Click here to register.

Building an S Corporation Step by Step: From Election to the 1040

NYSSEA Annual Conference, October 24

I’m thrilled to be teaching this year’s pre-conference workshop for NYSSEA! This is a full-day workshop (3 CE hours) that follows a single business from sole proprietorship through S election, first Form 1120-S, K-1, and all the way onto the 1040, in sequence, with every step connected to the one before it.

We’ll use a flipped classroom format: pre-conference online modules will cover the foundational material, so we can spend the live session entirely on application. Think less lecture, more “here’s a fact pattern, what do you do?”

I’m also delivering a two-hour follow-on course: Avoiding Costly S Corporation Issues, which picks up exactly where the workshop leaves off. We’ll discuss reasonable compensation, distributions in excess of basis, late elections, operating agreement traps, revocations, and terminations. If the workshop is “here’s how the system works when you do everything right,” the course is “here’s what to do when something goes wrong.”

Click here to register.

I have a couple of additional in-person teaching dates taking shape in late October and early November. Details aren’t final yet, but I’ll update this post when they are.

I’ll keep this updated as registration links and additional dates are confirmed. If you’re attending any of these and want to connect, reach out!

Want me to teach for your organization?

I’m still accepting engagements for 2026. If you’re with an association, state chapter, or firm looking for CE-eligible instruction on tax topics, reach out at jwells@jwells.tax. You can find a list of prospective courses and topics on my Education page.

Three key amounts—retained earnings, the accumulated adjustments account, and shareholder stock basis—have distinct meanings but similar calculations. This can cause confusion among shareholders and their tax advisors on their importance for understanding the tax implications of S corporation transactions.

In this article, I provide working definitions for these three key amounts and offer a simplified comparison of their calculations to demonstrate the subtle yet critical distinctions among them. I close with a case study that demonstrates how these measures relate yet differ.

In general, these three measures answer three different questions: retained earnings shows what happened, AAA determines what kind, and basis determines how much.

Retained earnings shows accumulated profits over time

At the end of each accounting period—usually the calendar year for most taxpayers—net income from the profit and loss statement closes, or transfers and zeroes out, into retained earnings. Distributions also close to RE at the end of each period. So, RE represents the cumulative net income a company holds rather than distributes to shareholders.

RE can take any value, positive or negative. A company may distribute cash or property in excess of accumulated profit, for example, by funding expenses with debt.1 Negative RE might represent already-distributed future profits.

Positive RE may indicate a business that has been relatively profitable at a given point in time and could distribute those profits to shareholders, whereas negative RE could indicate a history of losses or debt in excess of profits. Like any balance sheet account, the best way to analyze RE is by its change over time and in context with other amounts, such as total liabilities.

The accumulated adjustments account displays undistributed passthrough profits

The accumulated adjustments account reflects the cumulative, undistributed passthrough income of an S corporation.2 An S corporation may have existed as a C corporation prior to making the S election. This means retained earnings includes both C corporation earnings and passthrough S corporation profits. AAA ensures that S corporation earnings are distributed before any C corporation earnings and profits are treated as dividends.

Although it seems similar to RE, AAA differs in two important ways: first, distributions do not reduce AAA below zero;3 second, tax-exempt income increases RE, but it does not increase AAA.4

Like positive RE, positive AAA indicates earnings that could be distributed tax-free from the corporation. If an entity has no history as a C corporation, then AAA may seem unimportant; however, it still provides a useful account of undistributed profits. Even in these cases, AAA reminds us of the original purpose of Subchapter S: to prevent corporate earnings from being taxed twice via passthrough treatment.

Stock basis tracks shareholders’ limitations on deductions and nontaxable distributions

Stock basis (and then debt basis) limits the aggregate amount of losses and deductions a shareholder can deduct5 and the amount of nontaxable distributions a shareholder can take.6

Contributions, income (including tax-exempt income), and gains increase stock basis; and distributions, losses, and nondeductible expenses decrease basis, but not below zero.7 Since tax year 2021, S corporation shareholders calculate and report basis using Form 7203, S Corporation Shareholder Stock and Debt Basis Limitations.

Note that contributions increase basis but not RE or AAA. Include contributions in Capital stock (Line 22) or Additional paid-in capital (Line 23) on Schedule L, Balance Sheets per Books.

Example distinguishing RE, AAA, and basis

Jessica registers Lighthouse LLC by filing articles of organization, with herself as the sole member, on January 2, 20X1. On that date, she opens a checking account in the name of Lighthouse LLC and funds it with $1,000 of her savings. She also timely and correctly files Form 2553, Election by a Small Business Corporation, effective January 2, 20X1.

At the end of December 31, 20X1, Lighthouse LLC has nonseparately computed income of $84,000, municipal bond interest income of $500, and nondeductible meals and entertainment expense totaling $4,000. Jessica also received cash distributions totaling $35,000.

The calculations for RE, AAA, and basis at the end of 20X1 are as follows:

• RE $84,000 + 500 – 4,000 – 35,000 = $45,500

• AAA $84,000 – 4,000 – 35,000 = $45,000

• Basis $1,000 + 84,000 + 500 – 35,000 – 4,000 = $46,500

NB The $500 of nontaxable interest does not increase AAA, but it would increase the Other Adjustments Account.

The following year, Lighthouse LLC makes significant investments in operations, mostly funded through debt. At the end of December 31, 20X2, Lighthouse LLC reports the following for the year: nonseparately computed loss of $17,000, municipal bond interest income of $500, and nondeductible meals and entertainment expense totaling $4,000. Jessica also received cash distributions totaling $35,000.

The calculations for RE, AAA, and basis at the end of 20X2 are as follows:

• RE $45,500 – 17,000 + 500 – 4,000 – 35,000 = –$10,000

• AAA $45,000 – 17,000 – 4,000 – 35,000 = $0

• Basis $46,500 + 500 – 35,000 – 4,000 – 17,000 = $0

NB AAA is $24,000 before subtracting distributions; however, distributions cannot reduce AAA below zero. Basis is $8,000 before subtracting the loss; however, basis cannot go below zero, so $9,000 of the loss would be suspended and carried over in the next year. Both AAA and basis are zero, but Jessica still has suspended losses, highlighting that AAA and basis track different limitations.

In the next year, Lighthouse LLC returns to profitability despite significantly increased operating costs. At the end of December 31, 20X3, Lighthouse LLC reports the following for the year: nonseparately computed income of $10,500, municipal bond interest income of $500, and nondeductible meals and entertainment expense totaling $4,000. Jessica also received cash distributions totaling $15,000, a lesser amount due to reduced profits and a shortage of funds.

• RE –$10,000 + 10,500 + 500 – 4,000 – 15,000 = –$18,000

• AAA $0 + 10,500 – 4,000 – 15,000 = $0

• Basis $0 + 10,500 + 500 – 15,000 – 4,000 – 9,000 = $0

NB Basis is $11,000 before subtracting distributions, resulting in $4,000 of capital gain income. The carried over loss from the prior year carries over into the subsequent year. The nondeductible expenses do not carry over unless Jessica makes an election under Reg. § 1.1367-1(g).

Conclusion

Although similarly computed, S corporation RE, AAA, and stock basis have important differences in their calculations and interpretations. Shareholders and their advisors should be familiar with the concept of basis, track it annually, and take it into consideration whenever running tax projections or considering distributions.

Put your car in your business so you can deduct it.

Fraudulent reporting of excess business usage of a vehicle aside, does it ever make sense to own and operate a vehicle in a business, and if so, when?

In general, I usually recommend against this approach, unless there is some compelling reason to follow it. In many small business situations I see—especially with S corporations—the shareholder owning the vehicle personally and being reimbursed by the business is often the cleaner and more defensible structure.

But, as with all things tax, the answer depends on the specific facts and circumstances of the situation. So, when I’m advising a client about the business use of a vehicle, I use a simple framework that helps me sort through these questions quickly.

The framework boils down to three questions:

• Who owns the vehicle?

• Who uses the vehicle and how?

• What percentage of use is for business, and how will that change over time?

These three variables determine almost every tax consequence involving business vehicles: deductions, depreciation, income inclusion, and sometimes recapture.

I’ll unpack this framework in more detail in an upcoming episode of Tax in Action. I’m also teaching a webinar for NAEA on the topic in June. But I’m curious how other practitioners think about these situations. So, if you have a way of handling clients who insist on treating their grocery haulers as if they’re company cars, I’d love to hear it!

Let’s look at a few real situations to see how the framework clarifies how I think about the tax treatment of a vehicle.

Occasional business use of a personally-owned vehicle

A typical situation for my practice looks like this: A service-based S corporation with a sole shareholder-employee who occasionally drives her personally-owned vehicle for business purposes, such as meeting clients.

Let’s break this down:

• The shareholder-employee owns the vehicle.

• She also exclusively uses the vehicle for both business and personal purposes.

• Business use percentage is relatively low and will likely remain low for the foreseeable future.

I generally recommend using an accountable plan in situations like this.1 The plan allows the business to provide a tax-free, deductible reimbursement to the shareholder-employee for the business use of her personal vehicle. I typically recommend reimbursing at the IRS standard mileage rate.

Occasional personal use of a company-owned vehicle

A less common, but still plausible, situation involves some personal use of a company-owned car. This can make sense under the right conditions, as long as the business diligently tracks and correctly reports personal use.

What happens when the business owner-employee primarily uses the vehicle for business, but also drives it on weekends and vacations? Let’s take a look:

• The business owns the vehicle.

• The owner primarily uses the vehicle for business, with some limited personal use.

• Business use percentage is relatively high and will likely remain high for the foreseeable future.

The business use of the company provided-vehicle is a working condition fringe benefit.2 The owner must substantiate the use of the vehicle, such as with a mileage log.3

Any personal use of the vehicle results in the inclusion of the value of that usage in the owner’s taxable wages. This means coordinating the owner’s mileage log with payroll, introducing additional complexity.

Variable business use over time

Now consider a vehicle initially treated as a company-owned vehicle. The business claimed accelerated depreciation because business use exceeded 50 percent.

Two years later, both the business and the owner’s personal life have changed, and business use falls below 50 percent.

This can trigger recapture of the “excess depreciation” claimed in prior years, which could have significant tax and financial consequences.4

Exceptions to the general recommendation

To be clear, I’m not saying the business should never own the vehicle. There are situations where corporate ownership may make sense.

But, in my experience, too many vehicle structures are chosen without thinking through the interaction between ownership, use, and business-use percentage.

I want to know how you think about these situations.

When a client asks about a “business vehicle,” what factors do you look at first?

What mistakes have you seen recently?

What’s the strangest vehicle deduction you’ve seen recently?

What’s the best—or worst—business vehicle story from your practice?

Section 199A allows a deduction for taxpayers of up to 20% of qualified business income (QBI) from passthrough entities. The Petitioners co-owned three cannabis businesses taxed as S corporations. This case involves two of them and hinges on whether a cannabis business subject to § 280E can use the total W-2 wages paid, or only the deductible portion of those wages paid, for the calculation of the § 199A qualified business income deduction (QBID).

In calculating their § 199A deductions, the Petitioners used total W-2 wages paid by the two businesses to determine their QBID. The IRS disagreed, arguing that W-2 wages nondeductible under § 280E cannot be considered under § 199A.

In the majority opinion, agreeing with the IRS, Judge Toro writes that Congress provides an exception to the general rule that a taxpayer uses total W-2 wages paid for the calculation. Section 199A(b)(4)(B) states that, for purposes of the section, the “term [W-2 wages] shall not include any amount which is not properly allocable to qualified business income…” (emphasis added).

The Court then examines the meaning of “properly allocable,” connecting it to the statutory definition of QBI in § 199A(c). Section 199A(c)(3)(A)(ii) limits the definition of QBI to items “included or allowed in determining taxable income for the taxable year.” The Court works backward to decide that, because § 280E makes a portion of the W-2 wages nondeductible, then that portion does not qualify for inclusion in the definition of QBI and therefore cannot be used in the calculation of the deduction.

In a dissent, Judge Jenkins considers the policy intent of § 199A, which was to encourage the creation of jobs for Americans. Also, Congress did not include drug trafficking businesses in its list of ineligible trades or businesses in § 199A(d).

It’s an interesting case for a few reasons: first, it shows how different sections of the IRC can interact in unexpected ways; second, Jenkins’ dissent highlights the contention between desired policy outcomes and strict interpretations of the law; and third, it is the sole significant discussion of § 199A I can find in a court case.

NB The Petitioners have filed an appeal in the 9th Circuit.

I’m recording an upcoming episode of Tax in Action on QBID. I’m also teaching a 2 CE course on QBID at the National Association of Enrolled Agents 2026 Tax Summit. (Let me know if you’re attending!)

If you have questions about QBID, let me know by posting a comment here!

Do you agree with Toro’s opinion? Or does Jenkins’ dissent make more sense? Let me know!

I’ll also discuss QBID in my three-hour practical, hands-on workshop on S corporations at the New York State Society of Enrolled Agents Annual Conference in October.

He set up his firm’s calendar for 2026, marked deadlines, and blocked off unavailable days. This resulted in a maximum capacity of about 66 returns. Initially, he said, that number seemed low; however, he then compared it to this year’s production of about 90 returns, with several of them amended or prior year returns.

He realized the calendar wasn’t wrong. It was honest.

And that is the main benefit of intentionally managing your firm’s workflow and capacity. A calendar-based capacity plan doesn’t tell you what you wish you could do. It tells you what you can actually deliver without overworking yourself and your staff.

The reader then asked a series of follow-up questions that I’ll summarize as follows:

Once you start giving clients structured dates instead of loose promises, how do you manage what happens next?

This question deserves more than a quick email reply, so let’s go deeper.

The two-way bargain of calendar-based capacity

Scheduling your tax return workflow is really an agreement between two parties:

You agree to reserve time for the client, and the client agrees to provide you with everything necessary to complete the job.

That’s the bargain. But if you’re used to a reactive, “send it when you send it” model, shifting toward structure is a culture change for you and for your clients.

The reader’s estimate of 66 returns seems perfectly reasonable for a solo preparer who wants a humane tax season. Could he squeeze in 10–15 more? Sure. But capacity isn’t just about how many 1040s you can grind through. It’s about the combination of that with amended returns, notices, prior-year cleanup, advisory work, and the inevitable handful of “life happened, help me” moments that march in unannounced.

Scheduling protects the space for all of it.

Anticipating schedule-based workflow issues

The reader asked about three scenarios and how my firm approaches them: missed review deadlines, early submitters, and new clients admitted during tax season.

Let’s take a look at each of the three scenarios in turn.

1. A client fails to submit information and documents on time

Every firm that implements a scheduling workflow hits this wall, and the solution is painfully simple:

That is the rule at Steadfast. There are occasional exceptions—life is weird, and tax practice is even weirder—but the baseline expectation is this: Your date on the calendar is contingent on your documents being ready.

But the key is not enforcement. It is communication. Steadfast has client success managers (CSMs) who send reminders, complete initial document review, and compare uploaded documents to the prior year. We try to use review weeks to help (as much as possible) clients meet their obligations.

You may not have a CSM role in your firm yet, but you can still follow our procedures to help clients avoid an automatic rescheduling:

• Tell clients upfront that their scheduled date assumes timely documents.

• Remind them a week before.

• Make the reschedule a neutral, automatic outcome, not a judgment.

Good clients do not push back when they know the rules clearly and ahead of time.

2. A client submits everything early

This is the delightful opposite problem. And the answer is equally simple:

At Steadfast, we also move clients up on the calendar for a real need, such as a mortgage application, FAFSA request, offboarding, or other similar reasons to expedite. But this only works if the schedule has intentional slack. If you plan yourself to the minute, you remove your ability to respond to reality without significant stress.

3. A client onboards during tax season

Here is my honest advice: Avoid onboarding new clients during tax season unless there’s no alternative.

Onboarding is slow. Tax season is fast. The two do not mix well.

But if you choose to accept new clients during the season, set realistic expectations, not aspirational ones. Avoid overpromising during discovery and onboarding, and then having to choose between fulfilling your promise to this new client or your responsibilities to your existing clients.

Always build in at least a month for proper onboarding. Then, make it clear that the filing turnaround is typically 6–8 weeks from signup, assuming their documents are complete.

If a prospective client says, “I’ll go somewhere else if it takes that long,” that is not a scheduling problem. That is a differentiation problem. Your messaging, value proposition, and intake process should make it evident that your firm is not interchangeable with the one-hour pop-up booth in the strip mall.

When prospects see the firm as a commodity, any delay feels like friction. When they see you as a specialist, delay feels like quality control.

A front-of-the-line fee is also a legitimate option. Concierge service is a service.

Introducing multiple changes at once

The reader also admitted his firm is in early-stage growth mode and expressed nervousness about rolling out upfront pricing, scheduled slots, onboarding structure, and deadlines all at the same time.

Here’s some encouragement for him and you, especally if you’re in a similar position:

Good clients handle change extremely well when the benefits are clear and the communication is confident.

You do not need lengthy explanations of your business model. You need a short, simple message, such as the following:

We’re making a few improvements this year to streamline your experience. Here’s what will be different and how it benefits you:…

Clients do not care about features. They care about reducing friction and maximizing peace of mind.

The irony is that earlier in a firm’s life is often the best time to set expectations. Later on, when your roster is full and your processes are cemented, clients will resist change more than they do now.

Scheduling is business design

The reader’s questions show what happens when you move from a reactive approach to a designed workflow: everything becomes a system problem instead of a willpower problem.

Scheduling forces clarity on multiple critical aspects of your business:

• Capacity

• Boundaries

• Pricing logic

• Workflow steps

• Client expectations

• Communication rhythms

Most firms do not have performance issues. They have design issues.

And scheduling—done honestly—reveals the truth of your practice’s economics. You can only do what you can do. And that is not a defect. It is the first step toward building a firm that supports your life instead of consuming it.

A final note to the reader

If you’re reading this, know that your instinct was right. The calendar did not expose your weakness. It exposed your reality.

And you can build a beautiful tax season on reality.

This is exactly how you grow from “I hope this works out” into “I know exactly what I can promise, and I know exactly how to deliver it.”

Thanks for reading!

Giving property to nonprofit organizations provides a great example of the potential complexity and pitfalls of tax-deductible charity. A recent U.S. Tax Court case demonstrates how a seemingly minor technicality can negate a deduction—meaning a good deed is only as good as the documentation substantiating it.

Background of Besaw v. Commissioner

In Besaw v. Commissioner, T.C. Summ. 2025-7, the taxpayers—John Henry Besaw and his spouse—claimed a deduction for noncash charitable contributions totaling $6,760 on their timely filed 2019 joint federal income tax return. They included Form 8283, Noncash Charitable Contributions, along with worksheets identifying the names and addresses of the donee organizations and short descriptions of the donated property.

However, the return lacked two key pieces of information regarding the contributions: the dates of the donations and the values of the donated items. The IRS examined the return. In response, Besaw reconstructed the information from Form 8283 and submitted it to the IRS in 2022.

The IRS issued a Notice of Deficiency on August 10, 2022. The Notice explained that Besaw failed to substantiate the contributions adequately. Importantly, the government did not challenge the generosity; instead, it challenged the substantiation, and that proved fatal for the taxpayer.

Valuing and substantiating noncash charitable contributions

The amount of a noncash charitable contribution is generally the fair market value of the property at the time of the contribution, reduced as determined under IRC §170(e).1 This generally limits the potentially deductible value of the contribution to the lower of FMV or the taxpayer’s basis in the property.

Any noncash contribution over $250 requires a contemporaneous written acknowledgment from the donee organization, which must include a description (but not the value) of the property.2 Contemporaneous means the taxpayer obtains the acknowledgment on or before the earlier of the date the taxpayer files a return for the tax year of the contribution or the due date (including extensions) of that return.3

Treas. Reg. §1.170A-13 provides recordkeeping and return requirements for deductions for charitable contributions. Specifically for noncash donations under $5,000, a taxpayer must keep a receipt (or letter) from the donee organization showing the following information:

• The name of the organization;

• The date and location of the contribution; and

• A description of the property in reasonably sufficient detail.4

If it is impractical to obtain a receipt—such as at a remote drop-off location—the taxpayer must maintain a reliable written record that includes the following information for each item donated:

• The name and address of the organization;

• The date and location of the contribution;

• A description of the property in reasonably sufficient detail;

• The FMV of the property at the time of the contribution; and

• The cost or other basis of the property.5

For property valued over $500, the taxpayer also must record the date and manner of acquisition of the property.6

Besaw’s failure to substantiate adequately

Despite reporting noncash contributions on Form 8283 and attached statements, Besaw failed to substantiate the contributions adequately on several points:

• First, the return did not include values or dates of the donations.7

• Next, the receipts Besaw provided during examination, although containing dates and signatures, did not identify the property donated.

• Finally, the reconstructed documents submitted in 2022 were not contemporaneous.

Given these failures, the Court held that Besaw did not adequately satisfy the substantiation requirements of IRC §170(e)(1) and Treas. Reg. §1.170A-13. The primary issue was the lack of property descriptions on the donation receipts.

Lessons learned from Besaw

The key takeaway from the Besaw case is the necessity of adequate documentation for noncash charitable contributions. That means obtaining receipts that include dates, locations, and descriptions of the donated property.

Taxpayers often rely on donee organizations to provide proper documentation; however, many preparers sort through (mostly blank) Goodwill receipts each year. Proactively communicating the requirements can help clients understand what they need to record their donations sufficiently. Here’s a helpful checklist:

1. Get a contemporaneous receipt that includes the organization’s name and address, the date and location of the donation, and a reasonably detailed description of each item donated. “Household goods” may not suffice if the taxpayer claims a significant deduction.

2. Maintain a separate list of the items donated, including acquisition date (or a reasonable estimate), cost, condition, and value. Photos can help.

3. Be careful as the claimed value of the donation approaches $5,000. Crossing this threshold requires a qualified appraisal.

4. Prepare Form 8283 when total noncash contributions exceed $500. Make sure the appraiser and donee organization sign it, if necessary.

Charitable contributions are a great way to support organizations and communities in need. They can also provide a benefit for taxpayers, but only if they follow the rules.

Thanks for reading! This post is part of a Giving Tuesday collaboration with other great tax experts writing on Substack. Please check out their publications if you haven’t already:

• Tom Talks Taxes by Thomas Gorczynski, EA, USTCP

• Josh & Taxes by Josh Youngblood, EA

• Matt’s Tax Firm Insights by Matt Gaylor, EA

• Financial Guardians by Brad Messner, EA

• The Buzz about Taxes by Manasa Nadig, EA

• Tiffany Huntington, EA

1. Clarify the question

2. Consult appropriate sources

3. Confirm the findings

4. Conclude with confidence

As promised at the end of that article, I recorded an application of that framework, showing how I find an answer to what I think is a good tax research question (with an interesting answer, to me, at least) using Parker Tax Pro Library:

If you’re interested, here’s the text I use in my notes in Markdown format:

Tax research project 2025-11-21 16:37

## Clarify the question

### Client’s question

### Legal question

## Consult

### IRC

§{}

### Regulation

### Court case(s)

### IRS guidance

### Secondary sources

## Confirm

- Do the facts in the authority align with the client’s facts?

- Does the controlling authority actually support the interpretation?

- Is the source still current? Has any new law, guidance, or court opinion superseded it?

## Conclude

### Legal position

### Client response

## Contribute

Can I write off the cost of repainting my rental property?

Twenty minutes later, you have twelve browser tabs open, posts in a few tax professional Facebook groups with contradictory comments (and a few insults), you’re halfway through a podcast episode, and something about a 2010 Tax Court memo…

Federal tax law is complex and complicated, even for tax professionals. And clients always find ways to bring questions we’ve never quite dealt with, leading us to question what we think we know.

Today’s technology—search engines, social media, online communities, continuing education webinars, and, of course, artificial intelligence—provides more opportunities to get responses to questions. Replies can range from one-word answers to long treatises full of citations, with a few snide remarks about how basic your question is and unhelpful suggestions to “do your own research.”

Whether a reply is a comment in an online forum for practitioners or an AI-generated answer, quality is always a concern. Sometimes a response is excellent, others it’s half-true, and many times it’s a confident, well-formatted sentence that somehow manages to be wrong in three different ways.

None of this is meant as an insult to anyone. I’ve been both the provider and recipient of a lot of responses of varying quality and helpfulness. Federal tax law is enormous, scattered across statutes, regulations, case law, rulings, notices, procedures, and form instructions. No one knows everything. But we all have the same duty:

Don’t rely on an answer until you’ve verified it.

It’s critical for every tax professional—regardless of the credentials you have, role in your firm, or kind of client you serve—to understand how to handle tax questions and find answers to them. Our professional status requires us to develop the ability to conduct independent research. Circular 230 §10.33 includes in its Best practices for tax advisors the following:

Establishing the facts, determining which facts are relevant, evaluating the reasonableness of any assumptions or representations, relating the applicable law (including potentially applicable judicial doctrines) to the relevant facts, and arriving at a conclusion supported by the law and the facts.

I was a teacher and researcher in academia before working in accounting. Planning, conducting, and publishing research was part of my core responsibilities. As a tax practitioner, I use a similar process, albeit with different topics and goals.

Over time, I’ve settled into a simple, repeatable structure that I use for every question, whether it comes from a client message, someone in my firm’s staff, or a colleague. I call it the Four Cs:

1. Clarify the question

2. Consult appropriate sources

3. Confirm the findings

4. Conclude with confidence

This process helps ensure I determine the real issue at stake, focus only on relevant material, and provide a helpful answer supported by authoritative tax law.

Depending on the question and how close it is to my typical client work, going through this process can take anywhere from a few minutes to a few hours. But even for more complicated questions with lengthier research sessions, the process keeps me focused on the specific question, avoiding time wasted going down rabbit holes or confusion generated by conflicting responses.

Let’s walk through the Four Cs and see how they work:

Clarify the question

Before diving into my research tools, I have to know what the issue is, from both the perspectives of the person asking (usually a client or a colleague’s client) and the law itself. So, I start by writing the question in two forms:

1. Plain English What is the client asking? What happened that led to asking this question? When did it happen? Who else was involved? How much money1 was involved?

2. Legal What is the specific transaction? What Code section most closely covers this topic?

Note that these two versions of the question usually do not match. When a client asks, “Can I deduct the cost of repainting my rental property?” (Plain), your research question might be “Is repainting part of routine maintenance (deductible under §162) or is it an improvement (capitalized under §263)?”

Clarifying the real research question as early as possible prevents wasting time searching for the wrong things. It also helps other practitioners know precisely what you’re asking, avoiding nonsensical replies and harsh rebukes.

Consult appropriate sources

Once I’ve clarified the research question, then—and only then—do I consult sources. There are two kinds of research sources: primary, secondary, and tertiary:

1. Primary sources The first primary source for any tax research question is the relevant section of the Internal Revenue Code. But for a lot of questions, the Code merely provides the general rule, so I also look at the related Treasury Regulations for that Code section.2 Then, the IRS may provide additional authoritative guidance in Revenue Rulings or Revenue Procedures.3 Finally, federal courts interpret the law, including the Code, Regulations, and other courts’ opinions.4

2. Secondary sources Explanations, essays, and other non-legal sources can provide excellent starting points for research on unfamiliar topics. In these cases, I often start with a *Treatise* from my research service.5 A treatise is a summary in essay format, organized by subject. I also search for recent articles published in professional journals, such as the AICPA’s The Tax Adviser, which offers many of its articles for free. These articles go through an editorial process to ensure quality and usually feature rich citations to authoritative sources. Regardless of how you conduct your secondary research, always look for citations to authoritative primary sources to indicate the quality of the source.

3. Tertiary sources Sources that rely on and convey a blend of primary and secondary sources can be helpful, but they also require corroboration. Typical examples include dictionaries, encyclopedias, and textbooks, but in this context, I also include continuing education6 and tradition. I’m a lifelong learner, so I love good CE. But there’s a lot of bad or hastily written education out there, too.7 I avoid any CE that does not provide citations to authoritative primary sources or that includes a sales pitch for a product or service. As for tradition, “That’s how we’ve always done it” or SALY8 are red flags for me, especially when they contradict established guidance or best practices.

Whether you start with primary sources or with secondary sources, the key point remains: Understand what the law says, not what someone remembers it saying.

Confirm the findings

Once you have concluded your research, you need to do extra work to confirm your findings. I often see practitioners skip this confirmation step. I’m a bit ashamed to admit that I’ve missed it too many times myself, and when I have, I’ve always regretted it.

Finding a plausible answer, especially for a complex question or a drawn-out research project, can cause a rush. It’s essential to stop and evaluate the answer to ensure it actually fits all the facts and circumstances of your case.

Like all tax work, tax research requires due diligence. Finding an answer is one thing, but confirming it is another. Here are a few questions to ask yourself:

• Do the facts in the source align with your client’s facts?

• Does the controlling authority actually support your interpretation?

• Is the source still current? Has any new law, guidance, or court opinion superseded it?

This is the verify part of trust, but verify.

Online groups are great for getting feedback or confirmation from colleagues, who can often point me to an authoritative source or a rephrasing of the initial research question I hadn’t considered.

This step helps prevent embarrassing (and potentially costly!) errors and increases your confidence when reaching your conclusion.

Conclude with confidence

Once I’ve clearly phrased the research question, found an answer based on my reading of actual law, and confirmed my findings, the final step comes full circle: I summarize the result in two parts:

1. Plain English I explain the conclusion in layperson terms, using as much of the client’s original phrasing as possible. Then I transmit the message to the client (or colleague, with the caveat that the colleague should independently verify my conclusion).

2. Legal I also document my research in my private files, along with citations and direct quotations from authoritative sources. This gives me a quick reference if I come across a similar question again later.

The goal is a clear, defensible position well-supported by relevant authority.

A position is not “my opinion.” It is never “Here’s what I’d do if I wrote the law…” or “Here’s how I’ve done it, and it survived an audit.” Too often, I see statements like these as the totality of support for an otherwise indefensible position. This, to me, is malpractice.

The fifth C: Contribute your newfound knowledge

Those four steps—Clarify, Consult, Confirm, and Conclude—are sufficient to keep your clients satisfied and stay in business. However, as professionals, we have a higher duty, not just to our own firms and careers, but to our colleagues and our posterity.

So the Fifth C is to contribute your newfound knowledge to your community. That may look like sharing your findings with the junior tax staff in your office. It could look like a post to your firm’s website, your independent blog, or your YouTube channel. Maybe you discuss the case (anonymously, of course) as a guest on a podcast. Or you write up a summary of the law, your interpretation, and your application for publication in a professional journal.9

Regardless of how you share your learning, you should share it with at least one other person who can use it to help others. Keeping that learning private hinders the profession, potentially robbing colleagues and young professionals of potentially invaluable insight. Sharing is how we advance collectively, making us all better off.

A note about getting answers in groups

I spend a lot of time in online groups for tax professionals. When I meet other practitioners in real life for the first time, they usually recognize me from these online groups.

I’ve gotten a lot of great help from these groups. I’ve also met some great colleagues, friends, and mentors in them.

But we have to be honest, the quality of advice varies dramatically:

• Some people cite authority.

• Some cite what they remember from five years ago.

• Some cite something their software used to do.

• Some cite something their software still does (incorrectly).

• Some cite something a marketing influencer told them.

That all creates noise. Your due diligence cuts through the noise to get to the signal.

The best approach is simple:

Trust, but verify.

If someone posts a good answer, thank them, and then check the Code section, the Regulation section, the court opinion, or the ruling yourself. If someone gives a confident but unsupported answer, treat it as a starting point, not an end point.

Up next

In my next post, I’m going to show you exactly how I use Parker Tax Research to work through a question in real time: scrolling, clicking, searching, cross-referencing, and taking notes. It’ll be messy, honest, and practical.

Let me know if you have something specific you’d like me to demonstrate or look up.

We accomplished this with our existing software (no need for any separate apps!), and with a few refinements, we’re looking forward to implementing this approach again next year.

Why We Tried Scheduling This Year

The start of tax season can feel like a floodgate: once returns start coming in, it’s hard to manage priorities, staff capacity, and client expectations. Clients understandably want to know when their returns will be completed, but when everything comes in at once, the only honest answer is “as soon as possible.”

It’s also tricky to know when to start working on a return. For the first couple of months of the year, documents and information can trickle in. Missing forms suddenly appear, along with corrected forms and revelations of new investments, businesses, even marriages and recently born children! Rechecking files and revising returns and estimates can deplete capacity and ratchet up stress.

And what if the client submits the questionnaire, uploads a few documents, and immediately requests updates? What if she has a mortgage application that needs to be finalized, or refuses to file an extension?

Many firms, including ours, usually shift workloads, rearrange schedules, and make costly exceptions for requests like these. But this year, we wanted something different:

• A way to smooth out the workflow so our staff didn’t feel overwhelmed,

• A system that would reduce the endless stream of “What’s the status of my return?” messages, and

• Space to plan around real life—vacations, breaks, even paternity leave!—without feeling like we were letting clients down.

How Scheduling Worked for Steadfast

We asked each of our individual (1040) clients to choose a week by scheduling an “appointment.” During that week, our team committed to reviewing their documents and beginning return preparation. If we were still missing documents or information, we informed the client of what we needed and that they would need to reschedule their review.

If we determine we have what we need during the document review, we committed to a two-week turnaround, beginning with the following week. That means a client should expect to have the return ready to review and sign within three weeks of the start of their document review week.

We allowed a predetermined number of signups each week, based on the number of returns we expected to do and the number of weeks we offered. We included “blackout” periods to account for breaks and to give us opportunities to catch up.

And, of course, we filed extensions for all returns, without exception. We filed proper extensions with genuine estimates of each client’s tax liability based on our projections and information available at the time of filing.

Here’s what changed for us:

• Less stress We controlled the pace, rather than letting the season control us.

• Better planning We had visibility into workload weeks in advance and could block off periods for deadlines, vacations, and family time.

• Fewer status requests Clients knew exactly when their documents were scheduled for review, if we needed more information, and an estimated timeframe for completing the return.

Clients generally found it easy to use. A few were confused because they thought they were scheduling a meeting (not just a review window), and some wondered why they couldn’t pick a week before April 15. Both were simple messaging issues we’ll refine for next year.

Implementing Scheduling in Your Firm

A simple scheduling system can yield major benefits. By adding structure, we reduced stress, gave clients clarity, and allowed our team to balance heavy workloads with real life.

Of course, you probably have questions, even doubts, about implementing a system like this in your firm. (We did too!) Thinking through your firm’s workflows and your clients' needs can help alleviate fears.

First, implementing scheduling helps maintain healthy boundaries for you and reasonable expectations for clients. Telling them to pick a review week, then making exceptions, accepting late submissions, or tolerating nonresponsiveness defeats the purpose. You have to clearly communicate the consequences of not scheduling a document review or not providing all the necessary documents and information by that date.

Next, the timeframes and number of reviews per week we used may not be appropriate for your firm. You could do more than one round per week, or even daily reviews, depending on your capacity and workflows. Just keep in mind that the more reviews you commit to doing each week, the greater the need to add in blackout periods to prevent overloading yourself and your staff.

Also, you may feel like setting this system up would be more trouble than it’s worth. However, you likely have what you need already. Our system worked well with our existing technological infrastructure. We didn’t need special software, and neither do you! You probably have someone in your firm already who could set this up for you, or if not, I’m happy to help!

💡 The rest of this post is for paid subscribers. I’ll walk through the exact setup, including the tools, calendar scheduling, and workflow details so that you can replicate this in your own practice.

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Taxpayers now have relatively short windows to either acquire or place into service certain green energy property if they want to qualify for these tax provisions before they expire within the 12 months.

Tax professionals should clearly communicate these changes to their clients as soon as possible. See below for a taxpayer-friendly message available to paid subscribers.

Clean vehicles

The credits for clean vehicles (EVs) now terminate for property acquired after September 30, 2025. This includes the following:

• §30D clean vehicle credit,

• §25E previously owned clean vehicle credit, and

• §45W qualified commercial clean vehicles credit.

A taxpayer looking to purchase an EV should so so as soon as possible to qualify for one of these credits.

Clean buildings

The following clean building provisions now terminate for property placed in service after December 31, 2025:

• §25C energy efficient home improvement, and

• §25D residential clean energy credit.

A taxpayer making energy-producing or energy-efficient home improvements should do so as soon as possible. Note that this property must be placed in service by December 31, 2025, and there is no special transition rule for binding contracts in effect prior to the above dates (hat tip to for pointing this out).

If you have questions about the §25D residential clean energy credit, listen to Episode 1 of my Tax in Action podcast. (You can also qualify for CE by completing the course on Earmark CPE.) I cover the necessary criteria to claim this credit.

Taxpayer-friendly message (for paid subscribers)

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🎙️ In this episode of Tax in Action, I break down why joint filing is not actually the default, despite how it’s treated in practice. I also walk through how to properly compare filing statuses, review the disadvantages of separate returns, and explain why some clients might still be better off filing separately, whether because of student loans, mistrust, or financial protection.

In this episode, you’ll learn the following:

1. 🏛️ Why joint filing isn’t the default status for married taxpayers under the Internal Revenue Code;

2. 🔎 How to use your tax software to compare joint vs. separate returns accurately and spot common data entry mistakes; and

3. 💸 When it makes sense for a married couple to file separately, even if it increases their overall tax liability.

Earn CPE for listening to this podcast!

Filing status can make a big difference for taxpayers, in terms of both tax and personal finance. Make sure you’re taking all of the taxpayers’ needs into account when you prepare those joint returns!

In this episode, you’ll learn the following:

• 🏠 When you can (and can’t) do a §1031 exchange;

• 🏛️ Rules and exceptions discussed in relevant Tax Court cases; and

• 📑 The necessary people and paperwork to make sure your §1031 exchange is legitimate.

Earn CPE for listening to this podcast!

§1031 exchanges provide a substantial wealth-building tax benefit for real estate investors, as long as they follow the rules. Tax advisors can help owners make sure their transactions are handled and reported properly.

In this episode, you’ll learn the following:

• 📊 How debt-heavy balance sheets can trigger taxable events during an election;

• 😱 Ensuring LLC operating agreement provisions don’t violate S corporation rules and lead to unintended terminations;

• 💼 Equity structures that don't work with single-class stock requirements; and

• 💸 State taxes that can completely wipe out tax savings.

Earn CPE for listening to this podcast!

Partnerships and sole proprietorships often serve business owners better than the hyped S corporation structure. Before you recommend that next S-election, make sure you're considering the full picture, not just the self-employment tax savings.

In this episode, you’ll learn the following:

• ☑ The four-part test for qualified research activities;

• 💸 Identifying eligible expenses, including wages, supplies, and contract research;

• 🧮 Calculating the credit using the Regular and Alternative Simplified Credit methods;

• 💻 Special considerations for internal-use software and the “High Threshold of Innovation” test;

• 📈 How startups can apply the credit against payroll taxes; and

• 🛑 Common myths and pitfalls to avoid.

Earn CPE for listening to this podcast!

Whether you’re advising startups, tech firms, or traditional businesses exploring innovation, this episode provides practical insights to navigate the R&D credit landscape effectively.

🎧 Check out the episode now!