Tax Coda Weekly Digest — November 30, 2025
This short week made one thing obvious. Tax rules hold just long enough for everyone to pretend they are stable, then they shift underfoot.
Incentives created a reliance that they were never built to support. Procedures carried more weight than outcomes. Courts stepped in where agencies pushed too far.
The entire landscape felt steady only because everyone pretended it was.
1. The Fragile Certainty of Bonus Depreciation
We explored why bonus depreciation feels dependable only until it isn’t. The Code offers acceleration, not a promise. Businesses treated it like a permanent fixture and shaped their planning around it. That gap between policy and expectation is where the real fragility sits.
Why It Matters:
Acceleration rules change how companies invest.
Expectations solidify faster than congressional intent.
Treating temporary incentives as guarantees invites future shock.
Takeaway:
Reliance on bonus depreciation is the risk, not the reward.
2. When Investigations Become the Punishment
We wrote about how investigations drain people long before any conclusion appears. The process becomes the penalty: the calls, the requests, the timeline that never ends. By the time a result surfaces, the damage has already happened in all the small ways.
Why It Matters:
Administrative weight shapes decisions by itself.
Delays and pressure compound over time.
Oversight without balance warps behavior more than findings do.
Takeaway:
The process hits harder and sooner than the official outcome.
3. Center for Taxpayer Rights v. IRS
A federal court blocked an IRS policy that shared taxpayer addresses with ICE. The judge found the policy likely violated §6103 and failed the procedural requirements of the APA. The ruling limits the IRS from sending address data for civil immigration use while the case continues.
Why It Matters:
Confidentiality rules remain strict and enforceable.
Agencies must build a defensible administrative record.
Courts continue to draw a hard line on using tax data for noncriminal purposes.
Takeaway:
When the IRS stretches §6103, courts push back.
4. United States v. Tuncay Saydam
A federal court rejected an Eighth Amendment challenge to a $437,564 willful FBAR penalty. The judge said the penalty counted as a fine but was still proportional to the conduct, the number of accounts, and the willfulness findings. The government’s assessment stands.
Why It Matters:
FBAR penalties face narrow constitutional protection.
Courts rely heavily on proportionality and willfulness evidence.
Significant civil penalties survive when the record is clear.
Takeaway:
Willful FBAR penalties are rarely overturned through constitutional challenges.
Overall Takeaway
The story this week was expectation vs. reality. Incentives inspired confidence that they were never designed to support. Investigations carried more force than outcomes. And courts reminded agencies that statutory limits still matter. The rules held, but trust in them stayed as fragile as ever.