The year 2024 produced an extraordinary volume of significant tax and legal developments. From landmark Supreme Court decisions reshaping administrative law to the ongoing saga of the Corporate Transparency Act, business owners, estate planners, and tax professionals navigated a landscape of rapid change and persistent uncertainty. As we close out the year, a comprehensive review of the most impactful developments provides both a record of what changed and a foundation for planning in 2025.

Connelly v. United States: Life Insurance and Estate Tax Valuation

In June 2024, the Supreme Court decided Connelly v. United States, holding unanimously that life insurance proceeds payable to a corporation to fund a stock redemption agreement must be included in the value of the decedent's shares for federal estate tax purposes. The decision resolved a longstanding split among courts and tax practitioners regarding the proper valuation of closely held business interests when the entity holds life insurance for buy-sell purposes. The practical impact is significant: families using corporate-owned life insurance to fund succession plans must now account for the insurance proceeds in the estate tax value of the business, potentially creating a larger estate tax liability than anticipated.^[1]

Moore v. United States: The Mandatory Repatriation Tax Survives

Also in June, the Supreme Court decided Moore v. United States, upholding the constitutionality of the mandatory repatriation tax enacted as part of the TCJA. The Moores had argued that the one-time tax on accumulated but undistributed earnings of controlled foreign corporations violated the Sixteenth Amendment because it was imposed on unrealized income. The Court rejected this argument by a 7-2 majority, though the justices produced multiple opinions and declined to articulate a broad rule about whether the Constitution requires realization as a prerequisite to income taxation.^[2]

Loper Bright: The End of Chevron Deference

Perhaps the most consequential decision of the year for the regulatory landscape was Loper Bright Enterprises v. Raimondo, in which the Supreme Court overruled the 1984 Chevron doctrine. Under Chevron, courts deferred to agency interpretations of ambiguous statutes as long as those interpretations were reasonable. Loper Bright held that courts must exercise independent judgment when interpreting statutes, even when an agency has offered its own interpretation. For taxpayers, this decision opens new avenues for challenging IRS regulations and guidance that may overreach the statutory text.^[3]

The Corporate Transparency Act Saga

The CTA's journey through the courts was the most dramatic legal story of the year. After taking effect on January 1, 2024, the law required millions of businesses to file beneficial ownership information reports with FinCEN. Constitutional challenges were filed in multiple courts. In December, a federal court in Texas issued a nationwide injunction blocking enforcement, followed by a series of rapid developments in the Fifth Circuit that left the injunction in place as the year ended. The constitutionality of the CTA remains unresolved, and businesses continue to face uncertainty about their filing obligations.

ERC Enforcement and the Voluntary Disclosure Program

The IRS continued its aggressive posture toward improper Employee Retention Credit claims in 2024. The moratorium on processing new ERC claims, first imposed in September 2023, remained in effect throughout the year. The IRS reopened the voluntary disclosure program, giving businesses that received improper credits another opportunity to repay at a discount. The message from the IRS was clear: businesses that come forward voluntarily will be treated more favorably than those who wait for an examination.

RMD Final Regulations

After years of proposed regulations and transitional relief, the IRS finalized the regulations governing required minimum distributions from retirement accounts under the SECURE Act and SECURE 2.0 Act. The final regulations, effective for the 2025 distribution year, confirmed the IRS's position that most non-eligible designated beneficiaries who inherit retirement accounts from owners who had already begun taking RMDs must take annual distributions during the 10-year distribution period, not merely empty the account by the end of the tenth year.

Digital Asset Reporting

Treasury and the IRS finalized the broker reporting regulations for digital asset transactions under Treasury Decision 10000. Beginning with transactions in 2025, brokers will be required to report gross proceeds on the new Form 1099-DA. Basis reporting begins in 2026. The final regulations deferred action on DeFi and self-custody wallet reporting to future rulemaking.

Basis Shifting Proposed Regulations

In a development that alarmed the partnership tax community, Treasury proposed regulations targeting certain basis-shifting transactions involving partnerships. The proposed rules would treat certain partnership distributions and related-party basis adjustments as potentially abusive, subjecting them to heightened reporting requirements and potential economic substance challenges. Final regulations have not yet been issued, but the proposed rules signal the government's intent to close perceived loopholes in the partnership tax provisions.

Looking Ahead to 2025

The developments of 2024 set the stage for an equally consequential 2025. The TCJA sunset, the CTA litigation, the new administration's tax agenda, and the continuing evolution of IRS enforcement priorities will dominate the tax landscape. Business owners who stayed current with 2024 developments will be better equipped to navigate the challenges and opportunities ahead.