United States: Income Tax

Artificial intelligence has moved to the center of how the Internal Revenue Service selects tax returns for audit, detects tax fraud, and administers the U.S. tax system.

Recent court decisions interpreting COVID-19 disaster period tax law may entitle tens of millions of taxpayers to refunds or abatements of federal penalties and interest assessed during 2020-2023.

The Tenth Circuit's Liberty Global decision addresses a fundamental question about when the codified economic substance doctrine applies to tax transactions.

The U.S. Treasury Department and IRS have issued new proposed regulations addressing transition relief and grandfathering provisions for foreign government investors under Section 892.

The IRS and Treasury have released new proposed regulations under Section 892, revising applicability dates for previously proposed rules from 2025 that govern debt acquisitions and the "effective control" standard for foreign government investments. These revised dates include transition rules designed to protect existing and committed investments from the more stringent 2025 standards, while the preamble signals potential substantive changes to address market concerns.

International tax reform in 2026 introduced structural changes that affect how global income is classified, included, deducted, and limited.

Taken together, these developments reinforce that tax changes are not occurring in isolation. As governments continue to revise their tax frameworks, businesses and individuals alike are seeking coordinated cross-border advice to assess both risk and opportunity.

April 2026 marks the 10th anniversary of the Panama Papers, one of the largest data leaks in history. The leak exposed how wealthy individuals and entities used offshore shell companies, trusts, and other structures for secrecy, tax planning, and potential IRS tax evasion.

Section 1202 of the Internal Revenue Code offers substantial tax benefits for qualified small business stock (QSBS) holders, allowing exclusion of gains up to $10 million or more per taxpayer. Strategic gifting of QSBS shares to family members, trusts, and other entities can multiply these exclusions, potentially sheltering tens of millions in capital gains from federal taxation while navigating complex timing, gift tax, and trust structure considerations.