We reported on the taxpayer’s victory in Sirius Solutions LLLP v. Commissioner, No. 24-60240 (5th Cir. Jan. 16, 2026), the first business day after its release. Since then, the rhetoric has not ceased, with dozens (if not hundreds) of professional service firms reporting on the case and its implications to taxpayers. We are not going to rehash the decision, but, suffice it to say, that any limited partners who reported their income as SE income now have some thinking to do about amending previously filed income tax returns or filing protective claims for refund (on Form 843 – ).

Most (virtually all?) professional service firms are recommending amending applicable income tax returns in the 5th Circuit, which covers Texas, Louisiana and Mississippi. However, what about taxpayers in other Circuits? As we sit here today, the Tax Court decisions in Soroban Capital Partners, TC Memo 2025-52 (on appeal to the 2nd Circuit, Dkt. 25-1349), and Denham Capital, TC Memo 2024-114 (on appeal to the 1st Circuit, Dkt. 25-1349), are still precedential. There certainly is no doubt that the IRS will continue the fight. In this regard, immediately after Sirius was released, counsel for Denham advised the 1st Circuit of the result and implored the court to follow Sirius, while the IRS responded that Sirius was wrongly decided. Some pundits predict that one of those cases on appeal will go the opposite direction of Sirius, creating a split among the Circuits and an appeal to the US Supreme Court. With that in mind, many tax professionals are advising taxpayers outside the 5th Circuit to take a wait-and-see approach.

However, we would query whether “affected” taxpayers outside the 5th Circuit should file amended returns or protective claims for refund? In this regard, it appears unlikely that we will see a decision in Soroban or Denham this year based on the current status of those cases. (Note that oral arguments were heard in Denham last week.) That means another year for a statute of limitations to pass, if action is not taken. In fact, we have spoken to one professional at a national CPA firm who has asked the firm’s risk management department to consider whether the firm has an obligation to recommend, or at least discuss, with clients whether action should be taken. This certainly is a controversial issue and one that will be discussed at this year’s spring Fundamentals of Flow-Through® programs, as well at our fall Forum@reg; and Fundamentals programs.

2026 Programs Now Open for Registration
This year marks our 40th anniversary of presenting our Tax Forum programs, and we hope you can join us for what already chalks up to be a provocative year in the flow-through arena. Registration is now open for two virtual spring sessions of our newly enhanced Fundamentals program (perfect timing ahead of the fall filing season), along with our full 2026 schedule for both Fundamentals and Tax Planning Forum® programs. We encourage you to get a head start on registering, especially if you’re planning to attend one of our in-person programs in Las Vegas or Orlando.