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AICPA tax policy and advocacy successes: 2025 highlights

By Eileen Reichenberg Sherr, CPA, CGMA

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As we look back on 2025, the AICPA Tax Division’s Tax Executive Committee, along with its 14 committees and technical resource panels and various task forces, had over 40 tax advocacy successes. Combined, we produced over 68 comments this past year.

Some of our tax advocacy successes include:

  • Eight tax legislative successes, including enactment of seven AICPA-supported bills and the elimination of a proposed provision that would have prohibited the use of state passthrough entity tax (PTET) regimes by taxpayers affected by the federal cap on the state and local tax (SALT) deduction;
  • 12 items of Treasury and IRS guidance that followed AICPA recommendations;
  • Six IRS modifications and withdrawals of regulations about which the AICPA had concerns;
  • Six IRS provisions of relief that the AICPA requested;
  • Inclusion in the IRS national taxpayer advocate’s annual report of the AICPA’s recommendation of reallocating or providing additional funding for taxpayer service and modernization and reference to, and agreement with, an AICPA report on civil penalties;
  • Correction of accounts that received erroneous IRS notices of estimated payments on Form 1041, U.S. Income Tax Return for Estates and Trusts, when the 100% of prior-year safe-harbor applied, as the AICPA advocated; and
  • Three states’ enactment of AICPA- and state CPA society-supported legislation or regulations. One state did not enact AICPA- and state CPA society-opposed legislation. 

While 2026 will likely be a busy year in federal tax policy with continued implementation of 2025 enacted legislation, below is a closer look at some of the AICPA’s 2025 tax advocacy successes.

AICPA advocacy affects federal tax legislation

First, the AICPA (along with efforts from the state CPA societies) was effective in advocating the elimination of a proposed federal legislative provision that would have prohibited the use of PTET regimes in states with taxpayers affected by the cap on the SALT deduction. Additional tax reconciliation advocacy successes are noted below.

The AICPA endorsed 19 bills in the 119th and 118th Congresses, and seven AICPA-supported bills were enacted.

Four of the enacted AICPA-supported bills were in the July 4, 2025–enacted tax reconciliation legislation (H.R. 1, P.L. 119-21, commonly known as the One Big Beautiful Bill Act (OBBBA)):

  • Extending Sec. 174 research-and-experimentation (R&E) expensing (S. 1639/H.R. 1990, American Innovation and Jobs Act);
  • Increasing the reporting threshold for Form 1099-K, Payment Card and Third Party Network Transactions, from $600 to $20,000 (S. 1425, Red Tape Reduction Act, and to $10,000 in S. 1761 in the 118th Congress);
  • Extending the paid family and medical leave tax credit (S. 400/H.R. 996, the Paid Family and Medical Leave Tax Credit Extension and Enhancement Act); and
  • Allowing Sec. 529 plan expenses for post-secondary credentials, including the CPA Exam (S. 756/H.R. 1151, Freedom to Invest in Tomorrow’s Workforce Act).

The other three enacted AICPA-supported bills were in separately enacted legislation:

  • Providing the IRS the authority to extend federal tax filing deadlines following a state-declared disaster instead of waiting for a federally declared disaster and expanding the mandatory federal filing extension from 60 days to 120 days (H.R. 517/S. 132, the Filing Relief for Natural Disasters Act, which was enacted on July 24, 2025, as P.L. 119-29), which the AICPA and many state CPA societies have long supported;
  • Extending the amount of time disaster victims have to file a tax refund or credit claim to include the disaster postponement rather than the original filing deadline (H.R. 1491, Disaster Related Extensions of Deadlines Act), which was enacted on Dec. 26, 2025, as P.L. 119-64; and
  • Requiring that additional, clearer information be included on math and clerical error IRS notices (H.R. 998, the Internal Revenue Service Math and Taxpayer Help Act, also supported by the IRS national taxpayer advocate and included in the bipartisan Senate Finance Committee Taxpayer Assistance and Service Act discussion draft), which was enacted on Nov. 25, 2025, as P.L. 119-39.

In addition to the above four bills that the AICPA had supported for several years, seven other AICPA-supported provisions (11 AICPA-supported provisions in total) were enacted in the H.R. 1 tax reconciliation legislation (OBBBA):

  • Increasing the filing threshold for Forms 1099-NEC, Nonemployee Compensation, and Forms 1099-MISC, Miscellaneous Information, from $600 to $2,000, adjusted for inflation;
  • Restoring and making permanent Sec. 163(j)(8)(A)(v), which reinstates earnings before interest, taxes, depreciation, and amortization in determining adjusted taxable income for the limitation on deductible interest expense;
  • Making permanent 100% bonus depreciation;
  • Making permanent the Sec. 199A qualified business income deduction and expanding its limitation phase-in range for specified service trades or businesses;
  • Permanently extending the Sec. 954(c)(6) lookthrough rule for controlled foreign corporations;
  • Restoring the limitation on downward attribution of stock ownership in applying constructive ownership rules under Sec. 958(b); and
  • Permanently extending the individual alternative minimum tax exemption and phaseouts at 2018 levels.

We also were pleased that several other of the AICPA’s long-supported tax legislative efforts were introduced and started to be considered in 2025 and hopefully will move forward in 2026, including:

  • AICPA-supported S. 1443, the Mobile Workforce State Income Tax Simplification Act, which was introduced by Senate Majority Leader John Thune, R-S.D., and Sen. Catherine Cortez Masto, D-Nev., and would provide uniformity for nonresident state and local income tax withholding and a reasonable de minimis exception (working in a nonresident state more than 30 days) from the assessment of state and local income tax in a jurisdiction in which an employee does not reside.
  • AICPA-supported bipartisan Senate Finance Committee Taxpayer Assistance and Service (TAS) Act discussion draft (and section-by-section summary) that contains 13 AICPA-supported provisions (three of which were enacted in 2025), including Sections 101, 102, 103, 104, 105 (enacted), 108, 112 (enacted), 116 (enacted), 405, 504, 903, 904, and 905.
  • AICPA-supported H.R. 1152, the Electronic Filing and Payment Fairness Act, unanimously passed the House on March 31, 2025, which would apply the “mailbox rule” to electronic submissions.

We are hopeful that this year these bills will move forward and that as Congress considers some of the remaining provisions of the Tax Cuts and Jobs Act (TCJA), P.L. 115-97, that expired at the end of 2025, many of our other endorsed bills will also be included in 2026 tax legislation. To assist with educating Congress on the many issues for future consideration, the AICPA provided 69 tax legislative proposals that are noncontroversial simplifications and technical changes to provisions in the Internal Revenue Code that need attention and perhaps can be readily addressed.

The AICPA Tax Division submitted over 68 comments to the government

The AICPA Tax Division continued to be busy this past year, providing much input and feedback through over 68 comment submissions and many discussions with Treasury and IRS officials on needed and proposed tax guidance and with congressional staffers on tax legislative proposals.

One of the more substantial efforts involved all the Tax Division tax advocacy committees and technical resource panels, which developed, updated, and sent to Treasury and the IRS AICPA comments on the 2025–2026 Priority Guidance Plan. This submission identified 183 issues needing IRS guidance that the AICPA suggested Treasury and the IRS consider addressing during the upcoming year.

AICPA advocacy affected tax regulatory guidance

As mentioned above, the AICPA provided significant input and comments to the IRS and on needed guidance. We were pleased that in 2025, Treasury and IRS guidance continued to consider and include AICPA recommendations. For example:

IRS reports mentioned AICPA recommendations:

The IRS corrected accounts for erroneous notices as the AICPA requested:

  • In May 2025, the AICPA was the first to point out and provide redacted and unredacted information to the IRS to investigate and address erroneous notices CP 161 (and then later CP 504B intent to levy) for trust and estate 2024 Form 1041 estimated payments when the taxpayer paid 100% of the prior-year liability.
    • The IRS acknowledged the error, and its IT group corrected the programming error to stop future accounts from being affected and issued an internal Servicewide Electronic Research Program (SERP) alert, which eventually was SERP Alert 25A0208, dated Sept. 19, 2025 (revised Nov. 14, 2025), stating that the affected accounts have had a revision that indicates adjustments were made with Transaction Code 171 “reason code 045 during cycles 38 through 42 (September 12 through October 16, 2025).”
    • The Sept. 19, 2025, alert indicated that taxpayers should receive a notice after Oct. 13, 2025, showing the amount of the adjustment.
    • On Nov. 17, 2025, the IRS confirmed to the AICPA that it has now adjusted the accounts of affected Form 1041 taxpayers who correctly paid 100% of prior-year estimated taxes and had previously received erroneous notices CP 161 and CP 504B. Practitioners have also said affected accounts have now been corrected.

IRS modifications and withdrawal of regulations on which the AICPA had concerns:

  • As the AICPA recommended changes to the proposed regulations on partnership basis-shifting transaction reporting with related parties (REG-124593-23), the IRS final regulations (T.D. 10028) contained three AICPA recommendations:
    • The final regulations on transactions of interest (TOIs) increased the threshold from $5 million to $10 million and $25 million, respectively, for prospective and retroactive transactions;
    • The final regulations limited the lookback period to six years;
    • The final regulations apply only to nonrecognition transfers of partnership interests between related transferees and transferors, and they exclude publicly traded partnerships.
  • After the partnership basis reporting final regulations were issued, the AICPA had discussions with the IRS and provided comments with concerns about the final regulations exceeding the intended scope, asking for the final regulations to be suspended and then removed. The AICPA also asked for a delay in the July deadline and modification of the retroactive reporting requirements. This resulted in the IRS’s issuing Notice 2025-23, which announced the intended withdrawal of the final regulations under Regs. Sec. 1.6011-18 that identify certain partnership basis adjustment transactions as “transactions of interest.” Also, the IRS revoked Notice 2024-54 and Rev. Rul. 2024-14 and provided immediate relief from penalties for participants in, and material advisers to, the basis-shifting transactions identified in Regs. Sec. 1.6011-18.
  • As the AICPA noted concerns and recommended changes regarding the dual-consolidated-loss (DCL) and disregarded-payment rules proposed regulations (REG-105128-23), Treasury and the IRS noted in the preamble of the final regulations (T.D. 10026) that they agreed that additional transition relief was warranted and delayed the effective date.
  • As the AICPA recommended that Treasury and IRS withdraw part of the disregarded-payment-loss regulations for the inclusion of the stock rule, the IRS withdrew the disregarded-payment-loss regulations in Notice 2025-44.
  • As the AICPA expressed concerns related to the proposed regulations regarding Sec. 382(h) related to built-in gains and losses (REG-125710-18), Treasury and the IRS withdrew the proposed regulations and reinstated the AICPA-suggested approach of Notice 2003-65.
  • As the AICPA noted various concerns and requested in comments on the corporate alternative minimum tax (CAMT), the IRS issued Notice 2025-46, which withdrew part of the proposed regulations and included and addressed several AICPA recommendations:
    • Regarding clarification on cancellation or discharge of debt, the notice provided additional guidance on how the CAMT attribute reduction rules apply to a CAMT entity that is part of a consolidated tax group;
    • Regarding clarification of the financial statement net operating loss (FSNOL) limitation if the CAMT separate-return limitation year (SRLY) limitation is retained, the notice recommended that the IRS not require tracking to a “separately taxed business”; and
    • Regarding various AICPA-noted concerns with the CAMT proposed regulations, Notice 2025-46 provided that the IRS would partially withdraw the proposed regulations (REG-112129-23) regarding the application of the CAMT under Secs. 55, 56A, and 59.

IRS relief (penalty, filing, and reporting requirements) as the AICPA requested:

  • As the AICPA requested urgent relief and guidance for Sec. 174A R&E cost expensing for small businesses, the IRS issued Rev. Proc. 2025-8, allowing small business taxpayers to take the deduction on their 2024 tax returns with an election/deemed election. The revenue procedure also included AICPA-requested relief for taxpayers that had already filed their 2024 tax returns.
  • As the AICPA requested in comments on the Sec. 6045 digital assets proposed regulations (REG-122793-19) for a delay in the effective date, the IRS issued Notice 2025-33, extending by one year relief previously provided in Notice 2024-56, which contained transition relief from reporting penalties and backup withholding for 2025. In addition, Notice 2025-33 postponed the final regulations (T.D. 10000) on basis reporting to Jan. 1, 2026, and provided one-year transition penalty relief for brokers demonstrating a good-faith effort to file.
  • As the AICPA requested clarity and relief regarding digital asset basis tracking and requested clarity on Rev. Proc. 2024-28, the IRS issued Notice 2025-7, granting transition relief where taxpayers want to use specific identification but the broker’s software either offers only one default basis tracking method or does not offer taxpayers the option to use specific identification.
  • As the AICPA requested relief for 2025 reporting on qualified tips and qualified overtime, Notice 2025-62 provided relief and guidance for employers who paid qualified tips or qualified overtime compensation in 2025, including:
    • The AICPA requested clarification of the type of information a taxpayer can rely upon when claiming the no-tax-on-tips or no-tax-on-overtime deductions, and the notice acknowledged there would be additional forthcoming guidance for individual taxpayers addressing this concern.
    • The notice also provided examples for employers of how to make this information available, such as through an “online portal, additional written statements furnished to the employees or payees, or other secure methods.”
  • As the AICPA requested, the IRS issued Notice 2025-69 providing relief and guidance for individual taxpayers who received qualified tips or qualified overtime compensation in 2025.
    • Regarding tips, as the AICPA requested relief for individual taxpayers seeking to claim this deduction where they have not been furnished information by an employer, the notice allows the taxpayer to use the AICPA-suggested box 7 or box 14 of Form W-2, Wage and Tax Statement, or amounts reported on Form 4137, Social Security and Medicare Tax on Unreported Tip Income, to substantiate the deduction.
    • Also regarding tips, as the AICPA requested, the notice allows for self-employed persons to use a tip log to substantiate the amount of qualified tips for 2025.
    • Regarding overtime, as the AICPA requested, the notice allows taxpayers to rely on pay statements, invoices, or similar statements to support the determination if qualified overtime is not provided to the employee in box 14 of Form W-2.

IRS clarifications, updated forms, guidance, and regulations adopted AICPA recommendations:

  • The IRS’s final updated Form 6765, Credit for Increasing Research Activities, and instructions adopted four of the AICPA’s recommendations, including:
    • The instructions noted that if a taxpayer checks “yes” on line 41 for any qualified research expenses (QREs) following the Topic 730 directive (applying to taxpayers that expense research-and-development costs on their financial statements pursuant to FASB ASC Topic 730, Research and Development; see IRS Large Business and International Division memo LB&I-04-0820-0016), then the taxpayer needs only to report the amounts from the Topic 730 directive.
    • Changed “business component’s descriptive name” to “business component name.”
    • Stated in the final instructions that the IRS has limited the number of business components taxpayers must report in Section G to at least 80% of total QREs by business component but no more than 50 business components.
    • Removed questions 58–64 from Schedule G of the final Form 6765.
  • As the AICPA requested, the IRS provided a fax number (855-863-1257) to submit bulk filing relief requests for practitioners with disaster relief victims, which is much better than the prior requirement of submitting compact discs or flash drives.
  • As the AICPA requested changes and expressed concerns regarding the CAMT proposed regulations (REG-112129-23), the IRS issued Notice 2025-49, adopting several AICPA recommendations, including:
    • AICPA-requested changes to the definition of “eligible tax” for purposes of determining the CAMT foreign tax credit (FTC), and Notice 2025-49 provided a Sec. 245A(d) carve-out, which the AICPA mentioned when requesting clarification on the application of the CAMT FTC and eligible taxes.
    • Regarding adjusted financial statement income (AFSI) adjustments for accounting principle changes and restatements, as the AICPA recommended, the notice provides a simplified approach that allows CAMT entities to make an election to determine these AFSI adjustments without excluding pre-2020 amounts, allowing the full cumulative effect to be used.
    • Regarding applicability dates, as the AICPA recommended, the notice provides updated applicability dates for the CAMT proposed regulations, stating that no section of the CAMT proposed regulations or forthcoming proposed regulations will apply to any tax year beginning before the date the corresponding section of the final regulations is published in the Federal Register.
  • As the AICPA requested in comments on the CAMT proposed regulations (REG-112129-23), the IRS issued Notice 2025-27, providing the AICPA-suggested increase and expansion in the safe harbor to provide greater filing relief.
  • As the AICPA requested and recommended guidance on the CAMT’s application to partnerships, Notice 2025-28 included six AICPA recommendations:
    • Introduced a top-down elective safe harbor, which allows CAMT entity partners to use a simplified method for allocating their distributive share of a partnership’s AFSI;
    • Allowed for simplified methods and reduces reporting for immaterial partnership interests when the top-down or taxable-income election is made, which will help reduce unnecessary complexity;
    • Allowed any reasonable method for allocating modified financial statement income, provided that it uses the same method for all CAMT entity partners in the partnership;
    • Introduced a “modified-20 method,” essentially allowing partnerships to apply the regular tax rules under Secs. 752 and 707(a)(2)(B) instead of the CAMT deferred-gain rules in Prop. Regs. Sec. 1.56A-20, which essentially helps prevent CAMT gain recognition on transactions under Secs. 721 and 731;
    • Stated the election is in effect, once made, until the proposed regulations are issued; and
    • Adopted an AICPA-suggested reasonable method, such as using Sec. 704(b) income or loss to determine a CAMT entity partner’s distributive share.
  • The final regulations on Sec. 2801 (T.D. 10027), regarding the estate tax expatriation tax and the imposition of tax on certain gifts and bequests from covered expatriates, adopted three of the AICPA’s recommendations:
    • Allow a U.S. recipient to elect to treat and report a covered bequest (of a future interest not in trust) as received on the date of death to avoid a second appraisal.
    • Define the value of received property. (The regulations clarify that Chapter 14 does not apply to covered bequests.)
    • Clarify whether the Sec. 643 deemed distribution rules apply to Sec. 2801 with regard to loans and uncompensated use of foreign trust property. Regulations provide that Sec. 643(i) does not apply, but the regulations note that a loan or rent-free use of property may be reportable if it is a gift.
  • Regarding the proposed regulations on excise tax on repurchase of corporate stock (REG-115710-22), final regulations (T.D. 10037) adopted three of the AICPA’s recommendations:
    • Do not adopt the proposed funding rule.
    • Do not require a shareholder certification as sufficient evidence, and do not require shareholders to treat a repurchase as a dividend on their federal income tax return.
    • Incorporate transition relief for mandatorily redeemable stock and for stock subject by its terms to a unilateral put option of the holder, if such stock was outstanding prior to Aug. 16, 2022 (the enactment date of the Inflation Reduction Act of 2022, P.L. 117-169).
  • Regarding the proposed regulations on Roth mandated catch-up contributions resulting from SECURE 2.0, Division T of the Consolidated Appropriations Act, 2023, P.L. 117-328 (REG-101268-24), the final regulations (T.D. 10033) adopted several AICPA recommendations, including a Form W-2 safe harbor for predecessor and successor employer scenarios, guidance on common paymasters, and language addressing the AICPA’s concern on disregarded entities.
  • As the AICPA was the first organization to point out the needed guidance urgency due to possible financial statement impact, the IRS issued proposed regulations (REG-118988-22) in January 2025. The AICPA requested in comments and at meetings that Treasury and the IRS issue final regulations on Sec. 162(m) as amended by the American Rescue Plan Act of 2021, P.L. 117-2, no later than January 2025. The AICPA also requested guidance stating how an employer should determine the “additional five” highest-compensated employees for purposes of the Sec. 162(m) limitation as the changes go into effect on Jan. 1, 2027, for income tax purposes, but sooner for financial statement purposes.
  • As the AICPA advocated for over two years at various meetings and discussions with the IRS, the Service released additional employee retention credit (ERC) FAQs, including FAQ Q2, which provides a simpler method for taxpayers that claimed the ERC but did not reduce the wage expense on their federal income tax return and received an ERC refund in a subsequent year. The FAQ directs employers to include the overstated wage expense as income on the income tax return for the tax year when the ERC is received, versus filing an amended return. Also, FAQ Q3 provides that if an ERC was disallowed and the employer reduced the wage expense on an income tax return for the year the ERC was claimed, the employer may, in the year that claim disallowance is final, increase wage expense on the income tax return by the same amount by which it was reduced when the claim was amended. This treatment is preferable to amending the return.
  • As the AICPA suggested and discussed with IRS officials at a meeting, the attribution rule change to final regulations on Secs. 52 and 414 (T.D. 10018) was prospective.
  • As the AICPA requested in discussions with IRS officials at a meeting, Rev. Proc. 2025-1 included a raise in the dollar thresholds to be eligible for reduced user fees.

AICPA resources support state CPA societies’ state tax advocacy efforts

The AICPA State and Local Tax Technical Resource Panel, along with the AICPA State Advocacy and State Society Relations teams, tracks state tax policy issues and provides state tax advocacy resources for state CPA societies to leverage when advocating on behalf of the profession with state tax authorities.

Four state CPA societies were successful in advocating on important issues in 2025, including:

  • As the Alabama Society of CPAs and the AICPA advocated, the Alabama state mobile workforce bill (H.B. 379) was amended to increase the original draft’s 24-day threshold, to be in alignment with the 30-day threshold in the model legislation supported by the AICPA, the Council On State Taxation, and the Tax Executives Institute, and then was enacted.
  • As the Texas Society of CPAs and the AICPA advocated, Texas updated its date processing rule amendments to 34 Tex. Admin. Code, Part 1, Chapter 3, Subchapter O, §3.330(a)(1) (dated Aug. 30, 2024), to include and not delete the prior-rule exception for tax return preparation and financial statements preparation in the definition of data processing services.
  • As the Georgia Society of CPAs, with support from the AICPA, advocated, Georgia enacted as S.B. 141 legislation that included an increase in the appeals and protest period for tax assessments from 30 days to 45 days, which is an improvement and closer to the AICPA-suggested 90-day protest period for all states’ tax appeals process.
  • The Maryland Association of CPAs, with assistance from the AICPA, successfully advocated against proposed legislation that would have included a sales tax on professional services (including accounting services) (H.B. 1554/S.B. 1045), resulting in that legislation’s not advancing in the legislature.

AICPA tax policy and advocacy in 2026

Looking ahead into 2026, the AICPA Tax Policy and Advocacy group, working closely with AICPA Tax Division members, will continue to advocate on important tax regulatory and legislative matters. These include advocacy efforts on the continued implementation of enacted legislation, such as OBBBA provisions and the CAMT; proposed tax legislation, including the TAS Act; and proposed regulations and guidance. Our efforts will also include tax administrative issues, such as IRS service and modernization. We will continue to keep members informed of issues, developments, and our continuing tax advocacy efforts.

— Eileen Reichenberg Sherr, CPA, CGMA, MT, is director–Tax Policy & Advocacy, with the Association of International Certified Professional Accountants. To comment on this article or to suggest an idea for another article, contact Paul Bonner at Paul.Bonner@aicpa-cima.com.