Tax Oddities of 2025: A Year of Surprising Tax Rules

In 2025, the tax world saw some unusual developments that left many scratching their heads. One of the most talked-about topics was the debate around tips and pornography. The IRS proposed regulations that excluded tips from illegal activities, including prostitution and pornographic activities, from a new tax deduction. This sparked a lot of controversy, as many questioned how the IRS would define and enforce these restrictions. The lack of a clear definition for "pornographic activity" added to the confusion. Critics argued that this was a legal profession and raised First Amendment concerns. The debate intensified as digital content creators, especially those on platforms like OnlyFans, rely heavily on tips. With over 4. 6 million content creators and 377 million subscribers, the impact of this disallowance could be significant.Another interesting case involved Ian Freeman, who appealed his criminal tax conviction. Freeman, an early cryptocurrency enthusiast, was charged with money laundering, running an unlicensed money service business, and tax evasion. He argued that regulating cryptocurrency should fall under the major questions doctrine, but the appeals court was not convinced. The court found sufficient evidence of willfulness, including his use of entities like the Crypto Church of New Hampshire to hide his activities. In a different case, Salam Mahmood tried to convince the court that he hid his foreign account from his wife, not the IRS. However, the government argued that hiding money from a spouse still constitutes willfulness. The court has yet to rule on this case, but it highlights the growing trend of taxpayers using marital discord as a defense. Lastly, Hasbro's move from Rhode Island to Massachusetts brought attention to tax incentives. Massachusetts approved $14 million in tax credits for Hasbro, which plans to move 700 full-time employees to its new headquarters in Boston. While tax credits were not the only factor, they played a significant role in the decision. Rhode Island officials downplayed the impact, pointing to other job creations in the state.