In the blogs: Risk nobody is watching right now

Compliance drift; adoption tax credit; distort the P&L statement; and other highlights from our favorite tax bloggers.

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Risk nobody is watching right now

• Sikich: Annual affirmation means a SPRS score is a claim that is made every day of the year, not just the day it is signed. Continuous compliance, ongoing control monitoring, evidence collection and quarterly reporting, is how contractors keep that claim true without living in fire drill mode. This blog shows what it looks like in practice, and why compliance drift is the risk nobody is watching right now.
• Trout CPA: One of the most common surprises in real estate syndications is also one of the most important: the amount of cash an investor receives is not necessarily the amount of income the investor pays tax on. An investor may receive a healthy cash distribution and report little or no current taxable income. Another investor may receive no cash at all and still owe tax because the partnership allocated taxable income on Schedule K-1. This blog explains why cash distributions and taxable income don’t always align in real estate syndications, how partnership tax rules affect investors and what questions to ask before investing.
• Withum: On Sept. 28, the Treasury Department and the IRS issued Revenue Ruling 2026-20 and Notice 2026-62. Together, the guidance targets selected exchange-traded fund redemption structures and tax-aware investment strategies that the government believes use nonrecognition, timing or character rules to obtain tax results consistent with the purpose and proper application of those rules. The guidance does not challenge ordinary ETF operations or tax-aware investing generally. Its focus is on transactions that rely on the technical form of separate steps, instruments or elections to produce a result that Treasury and the IRS view as inconsistent with the purpose of the applicable rules.
• CBIZ: On Oct. 1, the SEC’s Division of Examinations released The SEC Exam Handbook: A Practical Guide on Process and Engagement, replacing its prior examination brochure and providing registrants with a more detailed explanation of the examination process. While the handbook does not create new legal obligations for SEC RIAs, it offers meaningful insight into how examinations are selected, conducted and concluded.

Appropriate safeguards in place

• Dean Dorton: Artificial intelligence is transforming how organizations operate. From customer service and financial reporting to marketing, cybersecurity and decision-making, AI is creating new opportunities to improve efficiency and drive growth. However, many organizations are adopting AI faster than they are managing the risks. The question is no longer whether an organization is using AI. The question is whether they understand where AI is being used, the risks it creates and whether appropriate safeguards are in place.
• Eide Bailly: As technology evolves rapidly, state sales tax laws often struggle to keep up. Software-as-a-service has become increasingly common, and yet, state sales tax rules governing SaaS are still evolving. A growing trend among states is the expansion of the tax base into the digital economy, creating new taxability and compliance challenges for SaaS businesses.
• Don’t Mess With Taxes: The tax reform provisions in OBBBA enhanced financial help for families who choose to grow by adopting. It made up to $5,000 of the adoption tax credit refundable. The change was made effective for the 2025 tax year. But it was unclear what that meant for prior, nonrefundable excess adoption credit amounts that were carried forward. The IRS has now cleared up the credit confusion, and is automatically sending 50,000+ affected adoptive parents credit-related refunds.
• Current Federal Tax Developments: The IRS has announced a significant administrative shift regarding the treatment of the adoption tax credit carryforward. This development follows a clarification from the Treasury Department regarding the interpretation of the Working Families Tax Cuts and its specific impact on the adoption tax credit. For tax professionals managing client files for the 2025 tax year, this represents a critical departure from standard carryforward mechanics, specifically regarding the availability of refundable credits.

Uncategorized expenses

• Financial Cents: Resolving uncategorized expenses can be tedious for bookkeepers. They have to review each transaction, determine what it was for, follow up with clients for missing details and assign it to the correct account. The more clients and uncategorized expenses that are managed, the longer this takes. They need to be resolved  before the books can be closed. 
• Taxjar: This blog helps in collecting, reporting and filing sales tax. Locate a state to see the November 2026 sales tax due dates. 
• National Association of Tax Professionals: Enrolled agent renewal season is a good time to review more than continuing education and enrollment requirements. It’s also the right time to confirm that a PTIN is active for the upcoming filing season. The EA renewal window from Oct. 1, 2026, through Jan. 31, 2027, applies to EAs whose Social Security numbers end in 7, 8 or 9 and EAs without a Social Security number.

An unwelcome double whammy

• TaxProf Blog: As the Mamdani administration looks to levy the new tax and increases scrutiny of where the city’s elite reside, some face an unwelcome double whammy as they also stand to lose an abatement that shaves thousands of dollars off their annual tax bills, premised on the idea that their New York City apartments were primary residences. Others are in a similar pickle. According to a Journal analysis of public records in New York and Florida, which has seen an influx of wealthy New Yorkers in recent years, some Sunshine State residents have been receiving the city’s abatement for years despite being ineligible for it. 
• CLA: Newly released proposed regulations explain how certain expenses are treated under the 2025 tax law when companies calculate the foreign-derived deduction-eligible income deduction and the foreign tax credit limitation for net CFC tested income, formerly known as global intangible low-taxed income. For many multinational companies, the changes may produce a larger FDDEI deduction and more capacity to use foreign tax credits. 
• The Sales Tax People: The 200-transaction economic nexus test is disappearing, one state at a time. Illinois dropped it on Jan. 1, Kentucky dropped it on Aug. 1. In both states, small remote sellers now only have to register if they hit $100,000 in sales. The number of orders no longer counts.
• Tax Vox: High gas prices have elected leaders looking for ways to cut fuel taxes. The Highway Trust Fund has the opposite problem: It needs more revenue. Fuel taxes are a primary source of revenue for the HTF, which helps support the nation’s highways and public transportation. The fund also relies on other transportation-related taxes and transfers from the General Fund to fill its coffers. But Congress hasn’t increased the per-gallon federal fuel tax rates since 1993, even to adjust for inflation. Without additional funding, the HTF faces a projected $318 billion shortfall by 2036.