As we navigate through changes brought by the new administration in 2025, there are significant developments within the Internal Revenue Service (IRS) that will impact taxpayers and tax professionals. The IRS is aiming to streamline its operations while facing the challenge of reduced staffing levels. With proposed federal workforce reductions and shifts in technology modernization efforts, understanding how these developments will affect IRS operations is crucial for maintaining compliance and efficiency in tax practices.

In this episode, Brooks Nelson, Partner and Strategic Tax Leader, and Sarah McGregor, Tax Director, are joined by Ron Wainwright, Tax Partner, and Kasey Pittman, Tax Managing Director. Together, they delve into the announced changes to the IRS workforce, discuss potential impacts on taxpayers and explore the ongoing technological transformations within the agency.

Listen to learn more about:

• 02:02 – IRS workforce reductions
• 05:02 – Changes in IRS leadership
• 08:39 – IRS Priority Guidance Plan
• 12:33 – Technology modernization
• 17:19 – Impact on taxpayers
• 19:12 – Taxpayer assistance proposal
• 22:14 – Best practices with the IRS

Related Guidance

• Article: Tracking Tax Reform: The Reconciliation Process
• Article: Recent IRS Guidance for the Definition of Employee
• Article: IRS Issues Final Regulations Impacting Micro-Captive Insurance Arrangements
• Article: IRS Guidance for Theft Losses From Online Scams
• Webinar Recording: Clean Energy Incentives, Prevailing Wage & Apprenticeship: IRS Insights

Earlier this year, final regulations were issued under Prop. Reg. Section 1.6011-10, setting forth the criteria that classify certain micro-captive insurance arrangements as listed transactions or transactions of interest. These designations require extensive tax return disclosures and impact all parties, including related entities.

As micro-captives continue to be a focal point for Internal Revenue Service (IRS) enforcement, understanding these regulations is crucial for businesses aiming to maintain compliance and avoid potential penalties. Micro-captive insurance arrangements have long been a topic of concern for the IRS due to their potential for abuse in tax planning. The recent regulations aim to address these concerns by providing clear guidance on what constitutes a reportable transaction.

In this episode, Brooks Nelson, Partner and Strategic Tax Leader, and Sarah McGregor, Tax Director, are joined by Rick Woods, Tax Partner. Together, they dive into the implications of these regulations, discuss IRS enforcement efforts and explore what constitutes a listed transaction versus a transaction of interest.

Listen to learn more about:

• 04:11 – IRS interest in micro-captives
• 06:01 – Section 831(b) in micro-captives
• 08:29 – IRS history with micro-captives
• 11:48 – Criteria for micro-captive transactions
• 17:13 – Reporting micro-captive transactions
• 19:49 – Exceptions in micro-captive coverage
• 21:24 – Exiting micro-captive arrangements
• 22:37 – Economic reasons for micro-captives
• 24:30 – Risk management in micro-captives

Related Guidance

• Article: IRS Issues Final Regulations Impacting Micro-Captive Insurance Arrangements

Navigating the complex terrain of financial statement reporting and income tax disclosures is a major challenge for companies as they face heightened regulatory scrutiny and evolving standards. The Financial Accounting Standards Board (FASB) continues to introduce significant updates, including ASU 2023-09, which requires greater transparency and more detailed reporting of tax provisions. These changes reshape how companies present their tax positions within financial statements, emphasizing the need for robust systems and strategies to manage increased disclosure requirements.

As organizations continue adapting to these standards in 2025, understanding tax provisions and their implications remains essential for maintaining compliance and demonstrating financial integrity.

In this episode, Brooks Nelson, Partner and Strategic Tax Leader and Sarah McGregor, Tax Director, are joined by William Billips, Tax Partner, and Lisa Macri, Tax Director. Together, they explore key tax legislation updates from 2024 and strategies for navigating the road ahead. This discussion is crucial for finance professionals seeking to build on last year’s adjustments and ensure their organizations remain prepared for the evolving landscape of tax reporting.

Listen to learn more about:

• 03:30 – Understanding ASC 740
• 04:25 – Common challenges with ASC 740
• 05:44 – Upcoming changes with ASU 2023-09
• 07:21 – Rate reconciliation and disaggregation requirements
• 08:33 – Preparing for ASU 2023-09 implementation
• 09:32 – Transferability of energy credits
• 10:45 – Acquisitions and dispositions key considerations
• 11:50 – Pass-through entities and tax reporting
• 14:20 – Anticipating future tax law changes
• 16:37 – Planning for legislative changes

Related Guidance

• Newsletter: The Rundown: Fourth Quarter 2024 Guide
• Article: Unlocking Opportunities: The Evolving Market for Clean Energy Tax Credits

In 2024, a year marked by numerous natural disasters, the IRS has stepped up to provide taxpayers with crucial relief measures. More than 60 disaster relief notices have been issued, offering postponement of tax return filing and tax payment due dates for individuals and businesses across various U.S. counties. This relief is vital as individuals and businesses begin the challenging recovery process, which often involves navigating insurance claims and understanding loss deductions for the first time.

The federal tax law provides rules for those claiming losses as a result of damages to business, investment and personal use property. Federal tax rules also benefit those who might realize a casualty gain when insurance proceeds exceed the cost or basis of damaged property.

In this episode, Tax Services Partner Brooks Nelson, Tax Director Sarah McGregor, and Tax Services Partner Mark Giallonardo join together to discuss IRS disaster filing relief, tax gains and losses resulting from property damage in federally declared disasters, and the impact of the TCJA on these claims.

Listen to learn more about:

• 03:47 – How the TCJA Affects Casualty Loss Deductions
• 05:32 – Methods for Assessing Fair Market Value
• 07:20 – Individual Loss Claims: TCJA Limitations Explained
• 08:40 – Business Loss Claims: Navigating TCJA Restrictions
• 09:55 – Understanding Timing Rules for Casualty Losses
• 12:45 – Strategies to Prevent Tax Gains When Claiming Losses
• 14:12 – Navigating the IRS Disaster Relief Funding Process

Related Insights

• Article: Navigating Hurricanes and Tax Relief: Guidance from the IRS and State Tax Authorities
• Article: The Trump-Era Tax Cuts Expiring in 2025

The employee retention credit (ERC) remains a hot topic as the Internal Revenue Service (IRS) has opened a new window for its voluntary disclosure program, allowing employers to withdraw their claims. While the IRS is processing and paying out refunds for the ERC, it has also introduced new conditions that seem to disqualify certain wages from eligibility. In response, some eligible employers are beginning to take legal action to compel the IRS to address their pending refund claims.

In this episode, Tax Services Partner Brooks Nelson and Tax Director Sarah McGregor are joined by Partner and Tax Credits & Incentives Advisory Practice Leader Martin Karamon. Together, they discuss the complexities of the ERC and the IRS's actions to address both legitimate and dubious claims.

Listen to learn more about:

• 02:23 – ERC overview
• 04:34 – IRS moratorium updates
• 06:32 – IRS timeline for resuming new claims
• 09:06 – 8/15 ERC voluntary disclosure program
• 10:58 – Sources for employer VDP info
• 12:48 – IRS 12 signs of incorrect ERC claims
• 14:56 – ERC claim payment status amid IRS audits
• 15:58 – Trends in employer lawsuits for refunds

Related Insights

• Article: Avoiding the Risk of Incorrect Employee Retention Credit Claims
• Webinar: The Employee Retention Credit: 2024 Updates
• Article: 2024 Most Frequently Asked Questions about the Employee Retention Credit (ERC)
• Article: Understanding IRS’ Voluntary Disclosures Program for Employee Retention Credit (ERC) Claims

The Section 179D Energy Efficient Commercial Building Deduction (Section 179D) and cost segregation studies can help commercial building owners save significantly on taxes. Section 179D provides a tax deduction for new construction and renovations to the HVAC, interior lighting and building envelope, while cost segregation studies help identify assets with shorter depreciable lives. When paired together, they create the best opportunity for building owners to maximize tax savings and increase cash flow by identifying and accelerating depreciation on energy-efficient assets.

The expansion of the Section 179D deduction through the Inflation Reduction Act (IRA) offers even more incentives for building owners, architects, engineers and design-build contractors who create technical specifications before and during the construction process. Utilizing these options can significantly reduce a building owner's tax liability and improve cash flow. Cost segregation studies analyze the parts of a commercial building to identify assets with shorter depreciable lives allowing owners to accelerate their depreciation deductions and reduce taxable income.

In this episode, Brooks Nelson, Tax Partner and Sarah McGregor, Tax Director, are joined by Glenn LeMieux, Tax Credits & Incentives Advisory Director, and Andre Kohn, Tax Credits & Incentives Advisory Senior Associate. Together, they discuss federal tax credits and incentives related to clean energy, energy-efficient buildings and cost segregation opportunities.

Listen to learn more about:

• 03:28 – Cost segregation study background
• 07:02 – Applications of cost segregation
• 08:52 – Cost segregation study process
• 10:42 – Section 179D background
• 14:57 – Qualifying for Section 179D
• 17:01 – Energy-efficient improvements
• 18:58 – Prevailing wage updates
• 23:51 – Strong candidates for these incentives
• 27:20 – Combining Section 179D and cost segregation

Related Guidance

• Article | Designing for Efficiency: How the 179D Tax Deduction Benefits A&E Firms and the Environment
• Podcast | 179D Energy-Efficient Commercial Buildings Deduction for Not-for-Profits
• Webinar | Maximize Tax Savings Through Cost Segregation, Section 179D, and Section 45L Approach and Client Success Stories
• Article | Factors to Consider When Seeking Cost Segregation and Section 179D Study Service Providers

For fast-growing companies, becoming a C corporation for income tax purposes can offer significant tax savings for their shareholders. Section 1202 of the Internal Revenue Code (IRC) is a powerful tool for attracting investors with funds to fuel a company's growth.

To qualify for these tax benefits, both the company and shareholder must meet specific requirements, and non-compliance can result in missed opportunities for savings. It is crucial for businesses to have a comprehensive understanding of the qualifications and technical aspects of Section 1202 to make the most of this tax law.

In this episode, Brooks Nelson, Tax Partner and Sarah McGregor, Tax Director, are joined by Barry Weins, Tax Director and Molly Gill, Transaction Tax Senior Associate. Together they discuss how qualified business stock offers a valuable opportunity to exclude capital gains from taxation, making it a powerful tool for attracting investors and fueling the growth of small to mid-sized businesses.

Listen to learn more about:

• 02:11 – Section 1202 background
• 04:57 – Businesses that qualify for Section 1202
• 05:47 – Beneficial transaction examples
• 06:42 – Recurring questions regarding Section 1202
• 10:37 – Difficulties of collecting client information
• 13:31 – Factors investors should consider
• 18:02 – How to become eligible for Section 1202
• 20:03 – How state provisions vary

Related Guidance

• Article: LLC vs. S Corp: Which Offers Better Tax Savings?
• Webinar: Maximize Tax Savings Through Cost Segregation, Section 179D, and Section 45L Approach and Client Success Stories

Public Law 86-272 (PL 86-272) offers limited protection to out-of-state companies that solely solicit sales for tangible personal property within a state. Small and medium-sized businesses in the manufacturing, distribution and retail sectors have heavily relied upon this state protection since it was enacted in 1959 to decrease overall tax liability.

In 2021, the Multistate Tax Commission (MTC) released a controversial reinterpretation of what activities may be considered more than mere sales solicitation. The MTC guidance suggests that some internet-based activities such as post purchase chats, online tutorials and cookies used for data mining may cause a business to no longer qualify for the protection of PL 86-272.

In this episode, Brooks Nelson, Partner and Strategic Tax Leader, and Sarah McGregor, Tax Director, are joined by Louis Cole, Partner and State & Local Tax Services Leader, and Cathie Shaw, National Tax Partner. Together they discuss the current challenges surrounding PL 86-272 and the increasing pressure stemming from the evolution of modern-day business practices.

Listen to learn more about:

• 04:07 – PL 86-272 background
• 05:25 – MTC authority
• 06:45 – Businesses that have adopted MTC interpretations
• 10:07 – MTC impact on small businesses
• 12:45 – Determining nexus without the sale of tangible goods
• 14:59 – Relevance of nexus studies
• 16:59 – Record keeping and internet activity analyses
• 19:43 – Mitigating compliance burden

Related Guidance

• The Income Tax Nexus Battle and Federal Public Law 86-272