Tax Coda Weekly Digest — January 11, 2026
This week centered on enforcement, turning concrete. Courts authorized asset sales, narrowed charitable deductions, upheld criminal convictions, and treated practical control as legal authority.
The IRS clarified technical tests that only matter once money is already moving. The common thread was consequence. Positions stopped being abstract and started being collected, reduced, or enforced.
1. Court Orders Sale of Kentucky Home to Satisfy $4.2 Million Federal Tax Lien
United States v. Joel
A federal court ordered the sale of a Kentucky residence to satisfy more than $4.2 million in federal tax liabilities. The court found the government met the requirements under §7403 to foreclose its tax liens. The proceeds will be applied to the outstanding assessments.
Why It Matters:
Confirms the government’s ability to force the sale of primary residences.
Shows courts continue approving lien foreclosure when balances remain unpaid.
Reinforces that equitable considerations rarely block §7403 actions.
Takeaway:
Federal tax liens can result in a forced sale when liabilities remain unresolved.
2. IRS Excludes REIT Hedge and Offsetting Hedge Income From Gross Income Tests
PLR 202601013
The IRS ruled that certain hedge and offsetting hedge income earned by a REIT could be excluded from the gross income tests under §856. The ruling focused on risk management activities tied to qualifying assets. The income did not jeopardize REIT status.
Why It Matters:
Clarifies treatment of hedging activity in REIT income tests.
Guides structuring risk management strategies.
Reduces uncertainty around qualifying income calculations.
Takeaway:
Properly structured hedges can stay outside the REIT gross income tests.
3. Sixth Circuit Upholds Convictions in Black Lives Matter Fundraiser Fraud Case
United States v. Sir Maejor Page
The Sixth Circuit affirmed convictions related to a fraudulent fundraiser that falsely claimed to support Black Lives Matter causes. The court rejected challenges to the sufficiency of the evidence and sentencing issues. The criminal judgments remain intact.
Why It Matters:
Confirms the durability of fraud convictions on appeal.
Reinforces scrutiny of charitable fundraising representations.
Signals continued enforcement focus on misuse of donation platforms.
Takeaway:
Fraud tied to charitable causes faces little sympathy on appeal.
4. Court Trims Claimed $132 Million Charitable Deduction
Barney v. Commissioner
The Tax Court reduced a claimed $132 million charitable deduction after rejecting the taxpayer’s valuation and supporting assumptions. The court found the appraisal unreliable and unsupported by the record; only a substantially lower amount qualified.
Why It Matters:
Reinforces valuation discipline for large charitable deductions.
Continues the court’s skepticism of aggressive appraisal positions.
Highlights the evidentiary burden for high-dollar gifts.
Takeaway:
Large charitable deductions rise or fall on the credibility of appraisals.
5. Court Treats Surviving Spouse as De Facto Estate Representative
United States v. Estate of Whittemore
A federal court treated a surviving spouse as the functional representative of an estate for tax liability purposes. The court focused on control over assets and dealings with the IRS rather than on a formal appointment. The government’s collection action moved forward.
Why It Matters:
Shows courts prioritize substance over probate formality.
Expands exposure for spouses who manage estate affairs informally.
Clarifies who can be bound in estate tax disputes.
Takeaway:
Acting like an estate representative can create estate-level liability.
Overall Takeaway
This week stripped away the distance between liability and outcome. Homes were ordered to be sold. Deductions shrank to match evidence. Criminal convictions held. Control mattered more than titles. And technical guidance clarified rules that only protect taxpayers who structure early.