Overtime pay for IRS employees rose by an estimated $27 million last year after federal cost-saving efforts triggered the departure of one-fourth of the agency’s workforce, according to a watchdog. Read more: https://taxnotes.co/4tEKsm5

JUST IN: President Trump has dropped his $10 billion lawsuit against the IRS over the leak of his tax return information, for which a federal judge was set to hold a hearing on regarding whether a valid controversy existed. Read more: https://taxnotes.co/4dgXilF

"Under the old model, scandal brought reform, not punishment," @joethorndike.bsky.social writes. "The lesson of the 1950s reforms was not that the IRS automatically deserved trust. It was that trust had to be rebuilt through a cleaner, stronger, more disciplined, and adequately funded agency."

The IRS has begun hiring Appeals officers to work complex cases and mediate alternative dispute resolution (ADR) programs a year after the office lost nearly 30 percent of its staff. Read more: https://taxnotes.co/4uhMtpE

The IRS’s sharing of taxpayer data with Immigration and Customs Enforcement might have constituted final agency action, running afoul of statutory provisions, questioning from a panel of three D.C. Circuit judges indicated. Read more: https://taxnotes.co/4fj27w0

Enacting a federal gas tax holiday in response to rising prices is picking up steam in Congress after President Trump said he supports the idea. Read more: https://taxnotes.co/3Phtwnu

The IRS is on the cusp of launching a program to automatically abate penalties for taxpayers who have a clean compliance record, according to the national taxpayer advocate. Read more: https://taxnotes.co/4tnxtoJ

Oil and gas giant Shell PLC reported a $163 million income tax charge related to the global minimum tax in the first quarter of 2026, as other companies logged increased tax rates from pillar 2. Read more: https://taxnotes.co/4dfeIhk

Tax professionals said they found it difficult to deal with untrained IRS staff during a filing season characterized by new tax provisions, and some are wondering how data will be captured by the agency’s new service metrics.

IRS CEO Frank Bisignano brushed off worries about agency staffing levels voiced by enrolled agents, who said they noticed some employees lacked proper training this filing season. Read more: https://taxnotes.co/4wbvW7M

The Tenth Circuit’s opinion in Liberty Global Inc. v. United States will likely create more uncertainty on where to draw the line between legitimate and abusive tax planning under the codified economic substance doctrine, according to tax professionals. Read more: https://taxnotes.co/49pMyPk

The IRS under the Biden administration selectively enforced the Johnson Amendment against churches and tax-exempt organizations with “traditional Christian views,” according to a new report.

A New York hedge fund is disputing the Justice Department’s claim to the Second Circuit that the Tax Court had jurisdiction to decide a dispute over the limited partner exception in a partnership proceeding. Read more: https://taxnotes.co/4t6IURK

A proposed one-time wealth tax on billionaires is likely headed to the November ballot in California after backers submitted more than 1.5 million signatures in support of the initiative.

Tax Analysts Chief Economist Martin A. Sullivan has announced his retirement. This week in the pages of Tax Notes, we're honoring Marty's career with a small sampling of his work, reflections from his colleagues, and a note from Tax Analysts President and CEO Cara Griffith. 👇

The Justice Department is doubling down on its argument to the First Circuit that the Tax Court had jurisdiction to decide a dispute over the limited partner exception in a partnership proceeding. Read more: https://taxnotes.co/4cLSnro

HM Revenue & Customs has reported that the U.K. digital services tax raised more revenue in 2025-2026 than ever, prompting a tech lobby group to warn about possible U.S. retaliation. Read more: https://taxnotes.co/4e6tRnh

The IRS has begun the process of firing a special agent leading investigations into abuse of Malta pension plans and Puerto Rico’s Act 60 tax incentives, raising questions about the future of those enforcement efforts. Read more: https://taxnotes.co/4sRJEKi

"When the Court strikes down a tariff, who should get their money back? The importer who submitted the duties to the government? Or people further down the line who may have borne the true economic burden of the tariffs?" @joethorndike.bsky.social asks.

IRS CEO Frank Bisignano assured lawmakers that the agency continues to pursue audits of high-wealth taxpayers despite deep cuts to enforcement staff and an increased reliance on artificial intelligence. Read more: https://taxnotes.co/4vyya0F

Several tax attorneys who spoke with Tax Notes are troubled by changes in the IRS Independent Office of Appeals’ practices they have experienced recently after the office’s staff was reduced by approximately 28 percent amid workforce reductions implemented by the Trump administration.

A former IRS employee was sentenced to a year and a half in prison on March 4 for filing false tax returns to fraudulently obtain tax refunds and stealing Social Security benefits. Read more: https://taxnotes.co/3Q8eLnb

The IRS Criminal Investigation division is in the process of ending the detail assignments that had its special agents working immigration cases and policing in two cities, according to the soon-to-be-former chief of the division. Read more: https://taxnotes.co/4t4piyf

"You need [housing] to survive, and it shouldn't be dependent on whether the developer used all their tax credits and now has the opportunity to make a huge profit," Gina Chiala said. Check out the full discussion. 👇

The Justice Department created a new National Fraud Enforcement Division that will house the criminal tax section from the Tax Division disbanded last year. Read more: https://taxnotes.co/4tyQJQB

The White House is threatening deep budget cuts to the IRS’s watchdog, which has already scrapped several audits because of staff reductions.

The Trump administration requested a $1.4 billion cut to the IRS’s annual funding for fiscal 2027, foreshadowing efforts by Republicans to slash the agency’s operating resources for a second consecutive year. Read more: https://taxnotes.co/4vdMSKu

The richest 0.1 percent of earners worldwide hold around 80 percent of the $3.55 trillion held offshore, more than the entire wealth of the poorest half of the world, according to a new Oxfam analysis. Read more: https://taxnotes.co/47IIb17

As NASA plans its return to the moon and billionaires dream of colonies on Mars, there's a lot of opportunities in outer space. And as these plans come into focus, so too does the need to determine taxing rights. Check out the full discussion with Erika Isabella Scuderi: https://taxnotes.co/3OkY07H

The manufacturing industry is urging Treasury to reform the research credit by reducing compliance burdens and allowing factory-floor research to qualify for the credit. Read more: https://taxnotes.co/4bIwFFw

"How will U.S. Customs and Border Protection return approximately $175 billion in ill-gotten tariff receipts to legions of anxious importers? There’s good reason for the government not to drag its feet," Robert Goulder argues.

The IRS’s sharing of taxpayer data with U.S. Immigration and Customs Enforcement violates the law and contravenes Congress’s authority, according to an amici brief filed by lawmakers. Read more: https://taxnotes.co/4dcnvSO

Who gets to see your taxes? Robert Goulder and @joethorndike.bsky.social discuss how public opinion has shaped taxpayer privacy laws from the early days of the income tax to immigration enforcement today.

Opinion: @joethorndike.bsky.social argues that the movement of both the Republican and the Democratic parties toward implementing an income tax paid by fewer Americans is a bad idea.

🎙️ NEW: Erika Isabella Scuderi, visiting assistant professor of tax law at the University of Florida’s Levin College of Law, discusses her proposal for establishing taxing rights in outer space.

Uber filed fraudulent tax forms after its lax screening process permitted applicants to use other people’s personal information to become drivers for the service, according to a newly filed class action lawsuit.

Sen. Rick Scott, R-Fla., is seeking compensatory damages from a former government contractor after his tax information was illegally disclosed by a former employee to several media outlets. Read more: https://taxnotes.co/4lW7BhQ

A recent IRS motion that included citations “hallucinated” by artificial intelligence could be a harbinger of more AI use — and misuse — by government attorneys, paralegals, and administrative staff in Tax Court cases, tax professionals say. Read more: https://taxnotes.co/4bYL4xk

"You may find that these high tariffs that you like so much prove to be enormously unpopular, like most regressive taxes are unpopular," @joethorndike.bsky.social said. "And so at the end of the day, it can revive interest in progressive alternatives."

Some criminal tax defense lawyers fret that the IRS’s proposal reinforcing the full payment condition of its voluntary disclosure program could create inequity by allowing the well-off to pay their way out of tax charges.

Americans don’t love taxes (does anyone?) but they have an even bigger issue with tax collectors.

Perspective: Nana Ama Sarfo discusses the upcoming potential renewal of the WTO e-commerce moratorium, and how the debate has expanded as some countries call for increased research into the moratorium's effects on the digital economy.

In the latest episode of "History Is Taxing," Robert Goulder and @joethorndike.bsky.social explore tax collection throughout U.S. history, from tariffs to tax returns, and how the past has shaped Americans’ perception of tax. 🎧 Listen wherever you get your podcasts.

Treasury Secretary Scott Bessent is no longer serving as acting IRS commissioner but will continue performing duties of the vacant role, according to the IRS.

Where did the SALT deduction come from? Watch Robert Goulder and Joseph Thorndike trace the origins of the state and local tax deduction from its early role in defining state sovereignty to the politics that led to today’s cap. 👇

Convicted sex offender Jeffrey Epstein established tax-advantaged trusts that could help shield his assets after he was indicted in 2006 for soliciting prostitution in Florida, according to documents released by the Justice Department.

New fees will be added to advertisers’ bills for Meta platform ads shown in jurisdictions that enforce location-specific taxes, including digital services taxes in EU countries, Turkey, and the United Kingdom. Read more: https://taxnotes.co/4dlSzPQ

What is the story behind the SALT deduction? This week, Robert Goulder and Joseph Thorndike trace the origins of the state and local tax deduction from its early role in defining state sovereignty to the politics that led to today’s cap. Listen now 👇

How revolutionary are Trump accounts? Carrie Brandon Elliot compares section 530A child savings accounts with similar accounts in other countries in her latest perspective piece. 👇

"It's kind of ironic that pillar 2 was supposed to set a floor on tax competition, and yet the side-by-side system may end up fueling more tax competition." Check out Stephanie Soong's discussion about the OECD’s recent pillar 2 side-by-side package deal and how countries are adapting. 👇