Tax Coda Weekly Digest — November 23, 2025
Each development this week circled the same theme. The system only works when records, procedures, and intent hold up under scrutiny.
Courts focused on proof. The IRS faced questions about the process. Policy debates circled back to whether subsidies solve anything or mask deeper structural issues.
It was a week defined by gaps between what the rules expect and how they play out in practice.
1. Graham v. Commissioner, T.C. Memo. 2025-116
The Tax Court denied a sister-in-law's earned income tax credit claim because the taxpayers failed to prove the age and residency requirements. The court found the record lacked documentation showing the child lived with them for more than half the year. The IRS's efficiency determination stood.
Why It Matters:
Reinforces strict substantiation rules for qualifying children under §32.
Highlights the need for residency records, such as school or medical documents.
Demonstrates that family relationships alone do not meet statutory tests.
Takeaway:
EITC claims fa…
