July 2026 Tax News Roundup — Key Updates for NYC Businesses & High-Net-Worth Individuals
July 2026 Tax News: The Courts Did the Talking
If June was the month the new tax law turned into rules, July was the month the courts priced what happens when a position doesn’t hold. A conservation easement valued at $41.6 million came out the other side worth $800,000, with a 40% penalty and no reasonable-cause escape. Two children who signed away a marital trust learned the gift was worth $35 million each. And two separate ERC cases went the government’s way, one on interest and one on what a business actually has to plead.
The administrative news mattered too, and some of it is genuinely good: the IRS will start waiving first-time penalties automatically, without a phone call. State and local items clustered around Texas and Illinois, where flood relief, a proposed Austin rate at its legal ceiling, and the Cook County appeal season all landed in the same three weeks.
Key takeaway. The mileage change is the one that touches nearly every return. Because it took effect July 1, 2026 is a split year: 72.5 cents a mile through June 30, then 76 cents from July 1 forward. Do not restate the whole year at either rate. If you deduct vehicle miles or reimburse employees who drive, your log has to break at midyear, and a reimbursement policy still paying 72.5 cents is now under-reimbursing.
New Jersey Capped Corporate Loss Deductions at $1 Million
New Jersey pushed its $60.75 billion FY2027 budget through in a Sunday night session, and the companion bills carry a provision the property-tax-relief headlines walked past: for tax years 2026 through 2028, the Corporation Business Tax allows no more than $1 million of net operating loss deduction a year. A profitable company sitting on old losses can no longer use them to zero out a good year. If you file a New Jersey return, this changes the cash forecast, not just the return.
A Judge Kept the Travis County Disaster-Tax Challenge Alive
A Travis County judge refused to dismiss the challenge to the county’s 9.12% “disaster” property tax increase, sending to discovery the question of whether commissioners can use a flood to skip a tax election. For anyone holding Austin-area real estate, this is the case that decides whether that line on the bill survives.
The IRS Made a Charitable-Trust Shelter a Listed Transaction
As of July 9, certain charitable remainder annuity trust arrangements are a listed transaction. The pitch was that a CRAT could erase the tax on selling an appreciated business. Anyone who used one now has a disclosure obligation, and the penalties for staying quiet can dwarf the tax the structure was meant to avoid. If a promoter sold you one of these, the conversation to have this month is with your own advisor, not theirs.
First-Time Penalty Relief Becomes Automatic
The IRS has forgiven certain penalties for taxpayers with a clean compliance history for years, but only for those who knew to ask. Starting this summer it applies the waiver automatically for filers with a record of filing and paying on time, with no call and no form. It’s a quiet administrative change that hands back money people were previously leaving on the table out of ignorance.
The Mileage Rate Changed Mid-Year, and 2026 Now Has Two of Them
The IRS sets the standard mileage rate each December and then leaves it alone. Not this year. Effective July 1, the business rate went from 72.5 cents to 76 cents a mile, with the medical and moving rate at 23.5 cents. The trap is in the bookkeeping: 2026 has to be split at June 30 and computed at both rates. Employers reimbursing at the old figure should update the policy now, because the gap is real money over a year of driving.
Austin Proposed the Highest Rate It Can Set Without a Vote
Austin proposed lifting its property tax rate from 52.4 to 57.953 cents per $100, the ceiling the city can reach without asking voters. The rate rose more than five cents even though the city expects taxable values to fall, and that combination is the whole story for an owner reading the bill. The adoption hearings, not the proposal, are where it gets settled.
Twenty-Three Minutes Cost an Investor a $416,350 Deduction
A partnership recorded a conservation easement at 3:03 p.m. on December 27, 2018. One investor wired in at 3:26 p.m.; the other paid the next afternoon. The Tax Court held neither was a partner when the deduction arose, cut the easement’s value from $41.6 million to $800,000, and left a 40% penalty standing with no reasonable-cause path out. Timing was not a technicality here. It was the case.
NYC’s Pied-à-Terre Rules Are Final, and the Lien Follows the Apartment
The Department of Finance adopted final rules for the pied-à-terre surcharge, settling when the notice arrives, how long you have to contest it, and what happens if a primary-residence certification proves wrong. The detail buried in the comment responses deserves the attention: the surcharge is a lien on the apartment, not a bill to the owner. DOF was asked to shield future buyers from it and declined. That makes it a diligence item on any NYC purchase.
Three New Information Returns Appeared on the 2026 List
The Internal Revenue Bulletin set the printing and substitute-form rules for next January’s 1099s, and the form table picked up three entries absent from the 2025 version: a vehicle loan interest statement, a long-term care premiums statement, and a contribution statement for Trump Accounts. None has been released for filing yet, which is the part worth watching if you build or buy payroll and reporting software.
Florida’s Impact-Window Break Is a Refund, and It Stops at $500
Florida published rules on July 16 for its sales tax break on impact-resistant windows, doors, and garage doors. Read the mechanics before you budget around it: you cannot take it at the register. It is a refund claimed months after you pay, only on a homesteaded site-built house with a just value of $700,000 or less, capped at $500 for one property per owner. Useful, but far smaller than the headline suggests.
Travis County Made the Disaster List, and a 105-Day Clock Started
The governor declared a state disaster covering Travis County on July 14, and the Texas Comptroller posted the matching relief on July 17. Two clocks now run for Austin property owners: a hard October 27 deadline to apply for the temporary property tax exemption, and a state filing extension that exists only if you write and request it. The extension is not automatic, which is exactly how people miss it.
ERC Interest Ran From 2021, Not From the Day the Money Arrived
A dental practice claimed the Employee Retention Credit, amended its corporate returns to cut the wage deduction, and left the owners owing $37,546 more on their 2020 personal return. The IRS billed $5,438 of interest running back to May 2021, and on July 21 the Tax Court sustained it on summary judgment. If you took the ERC and haven’t yet amended, the interest exposure is older than the refund check.
Ending a QTIP Trust Early Cost Two Children $35 Million Each
Two adult children signed an agreement letting their father take a $117.6 million trust outright. The Tax Court priced what they gave away at $35,141,321 apiece. Beyond the number, the opinion settles that state law, not the Section 7520 tables, governs property entitlements when a marital trust terminates. Any family considering unwinding a QTIP should read this before anyone signs.
Cook County Opened the 2026 Appeal Season on July 27
The Cook County Board of Review began accepting 2026 assessment appeals on July 27. Filing is free and a representative can file for you, but the window closes township by township rather than on one countywide date. That detail is what catches owners who live somewhere else and assume a single deadline.
Staying Open at Reduced Capacity Is Not a Partial Suspension
A California insurance agency kept its call centers running through the pandemic, claimed the ERC, and sued for a $50,000 refund. On July 23 the Court of Federal Claims held that a partial-suspension claim has to plead that a discrete, more-than-nominal part of the business actually stopped under a government order. The court gave the company until August 6 to amend rather than dismissing, but the line it drew is one a lot of pending ERC claims will hit.
Travis County Turned On the Tool That Shows Your Proposed Bill
The Travis Central Appraisal District brought its truth-in-taxation database live on July 24, letting every county property owner see what each local government would charge if it adopts its proposed rate. This is the one annual window to see the number before it locks in, and it opened the same week Austin proposed a rate that would raise a typical homeowner’s city bill by roughly 8%.
What to Watch in August 2026
Several July items carry August dates. The ERC plaintiff in the Court of Federal Claims has until August 6 to replead. Austin and Travis County move from proposed rates to adoption hearings through August and September, which is when the truth-in-taxation numbers stop being hypothetical. Cook County’s township appeal windows keep closing on their own schedule, so check yours rather than a countywide date.
Further out, the Travis County disaster exemption closes October 27, and third-quarter estimated payments are due September 15. If you drive for work, rebuild the mileage log now while the midyear split is fresh, rather than reconstructing it next April. More on all of it at Helpful Guides. August is usually the quietest month on the tax calendar, which makes it the cheapest month to fix something.
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