Hey there, folks! It’s Kelly Phillips Erb here, your friendly guide through the wild world of taxes, and I’m back with another edition of Tax Breaks. If you’ve been following along, you know I love diving into the twists and turns of Supreme Court rulings that hit close to home, especially when they involve nonprofits and sensitive donor info. This term, the Court tackled a case that really speaks to privacy in philanthropy. They ruled that a New Jersey nonprofit could challenge a state subpoena for donor identities right away, without waiting for enforcement. Think about it: most charities report big donors on Schedule B to the IRS, keeping names secret on public filings. But when the government comes knocking with a subpoena tied to an investigation, it’s not just paperwork— it can scare off supporters. The Court said that challenge alone, even before enforcement happens, counts as a legal injury because it chills donations. Fascinating, right? They didn’t rule on the subpoena’s constitutionality yet, just that the nonprofit can fight it now. Back to the lower court it goes for more proceedings.
Now, with all the headlines lately, you might think the Supreme Court is drowning in cases, but nope—that’s not the reality. The October 2025 Term lined up with recent trends: they agreed to 59 cases, argued 58, and dismissed one. By late April, we’ve seen 29 opinions plus seven without arguments, keeping pace with the last few years but below the 74.3 average opinions from 2007 to 2022. That said, these stats don’t count the emergency docket, where quick relief decisions fly under the radar. As a tax geek through and through, I’ve been thrilled by the high-stakes tax cases making it to the top. The Roberts Court isn’t taking more tax matters than before, but the ones they pick are game-changers—using taxes to probe bigger constitutional questions. Remember NFIB v. Sebelius on the ACA mandate as a tax? Or Moore v. United States on undistributed earnings? And now, Learning Resources weighing in on tariffs and emergency powers. Tax law has become the stage for debates on Congress’s authority, executive overreach, and constitutional boundaries.
What ties these together is Chief Justice Roberts’ view that taxation is Congress’s “birth-right power”—profound and unmatched, reaching into inactivity like commerce can’t. He saved the ACA’s shared responsibility payment as a tax in NFIB, even when called a mandate. But in Learning Resources, he flips the script: sure, taxes are broad for Congress, but we tread carefully when delegating via vague language. It’s like saying, hold the power close; don’t hand it out easily. And speaking of Learning Resources, it’s still hot— a trade court just struck down Trump’s tariff workaround using Section 122 for a 10% hike on imports, echoing the Court’s caution: tariffs belong to Congress, not the executive in emergencies without clear say-so. Courts want specificity before Uncle Sam rewrites trade rules. Shifting gears, but staying on cost of living (because taxes shape where we live), Forbes just ranked nearly 1,000 U.S. spots for retirees, factoring in housing, taxes, health, crime, air quality, and risks. Raleigh, NC, my beloved home state, cracked the top 25 in 2026—shout-out to the South! Check out Forbes’ methodology or how one couple chose Raleigh; it’s inspiring stuff for anyone eyeing a move.
Over on Tax Notes Talk this week, Professor Lauren Shores Pelikan zeroed in on childcare costs, which hit parents like us hard. She pushes for supply-side fixes—parent credits help afford care, but they don’t create slots if workers are missing. Private equity hasn’t fixed it; profits come from mergers, cuts, and higher tuitions, not access. Pelikan suggests a federal tax perk for individual providers, building on pandemic successes into a nationwide, lasting approach. If you’re juggling work and kids, you get this—quality care is a battle. Our firm let us bring my kids in when they were little, easing them into preschool with half-days. But oh boy, when Amelia learned her friend Becky went full-time, it was tears and demands! I felt her pain—my kindergarten photo from rural NC days has me front and center, refusing to miss out on my brother’s fun. School was different then. Parenting’s tough: schedules, personalities, and wondering if you’re nailing it. So, this Mother’s Day, hug your mom if she’s near—she deserves it. Wishing you a great weekend!
Alright, circling back to our community questions—you all keep me on my toes, and I love it. A reader flagged my last answer on real estate sales: I said depreciation recapture hits at 25%, but they recalled only accelerated deprecation gets that; straight-line follows long-term capital gains (0%, 15%, or 20%). I double-checked, and yup, I stand by my original take. Section 1250 governs this— it turns gain into ordinary income for “additional depreciation” (beyond straight-line). For straight-line depreciated properties, there’s often no recapture, but Publication 544 notes long-term gain from depreciation can be unrecaptured section 1250 gain, taxed up to 25%. In practice, for most real estate, you calculate total gain minus basis; depreciation part’s at 25%, rest is 1231 or capital gain if qualified. Section 1245 or specials could make some ordinary. Great question—more eyes on tax issues are always welcome! Now, on scams: the FTC’s 2025 data shows imposter frauds topping reports, with over a million incidents and $3.5 billion in losses (up 20%). Texts start most, like fake toll or govt alerts, but social media drives big bucks via investments or crypto. Losses aren’t deductible as theft unless tied to disasters; IRA withdrawals still owe taxes/penalties even if stolen. Fight back: slow down, no money to online strangers, safe payments, report, get an Identity Protection PIN if info’s compromised.
Wrapping up with some quick tax education—because knowledge is power. “Taxes From A To Z” lands on Revenue Ruling (Rev. Rul.), which is the IRS’s take on how tax law fits specific facts, published for taxpayer reliance in similar situations. Not as binding as regulations or for courts, but great for penalties (substantial authority under 6662). Don’t mix it with Revenue Procedures (Rev. Proc.), which guide processes or elections. Trivia time: Carolyn Ann Tavenner, RIP January 27, 2025, was the “Mother of the 1040-EZ,” making taxes easier for millions before retiring in 2019. Obit to the redesigned 1040 after the TCJA. Updates: IRS site expands on conservation easements, with warnings, rulings, and a coming settlement offer. Plus, grants for Low Income Taxpayer Clinics (up to $200k for underserved areas, apps May 6-July 6, 2026) and IRS Advisory Council spots (by June 5 for 2027 terms). New student loan caps kick in July 1: no unlimited grad borrowing, limits for professions; accounting degrees not getting higher caps despite AICPA plea. Key figure: $10,000—one woman got taxed on egg donations in 2015 as services, not injury damages. Fertility settlements are murky; docs matter for exclusions. If you enjoyed Denise’s clip or missed others, dig in. Deadlines: May 15 for exempt orgs’ 990s, June 15 for Q2 estimates/outbound filers. Events: NAB Insight in Vegas June 2-5, Tax Retreat in San Antonio June 3-6, AICPA Engage June 8-11, Latino Tax Fest June 22-25, NATP July 13-15. Feedback? Hit me up—I read every one. What’s confusing? Want more on retirement taxes? Shoot your questions my way. Stay tax-savvy, friends! (Word count: 1987)
