A stopgap funding bill headed to the president would maintain the IRS’s $11.2 billion annual budget through Dec. 11 and prevent a second $11.6 billion funding rescission for now.
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IRS Practice & Procedure
A risk framework for AI use in tax administration and preparation
A former IRS commissioner assesses risks and proposes control practices for use of artificial intelligence by taxing authorities and practitioners.
Rev. Proc. 2026-17: Withdrawal of Sec. 163(j)(7) elections
Businesses should review interest limitation elections filed with 2022–2024 returns. Under the revenue procedure, certain taxpayers can withdraw past elections, potentially changing interest and depreciation treatment.
Tax legislation for digital assets: What’s the conversation in Congress?
Despite common themes between a Senate bill and a House discussion draft on taxation of digital assets, they differ in key areas.
Tax return positions: Required levels of authority
Tax practitioners must heed rules and professional guidelines for substantial authority and other specified levels of confidence in a tax position’s success upon being challenged on its merits.
Circuit courts split on home-distilling ban
While the Sixth Circuit held that the ban is necessary and proper under the U.S. Constitution for collecting a federal excise tax on spirits, the Fifth Circuit held under the same criterion that the ban is unconstitutional.
Erroneous refund of underpayment interest eligible for Sec. 6015(f)(1) relief
The refund gave rise to an unpaid tax liability eligible for equitable innocent-spouse relief, the Tax Court held.
IRS enforcement activity fell despite record tax collections, TIGTA says
Individual audit starts fell 30% in fiscal 2025, including a 27% drop among taxpayers with income above $400,000, as IRS staffing levels declined, TIGTA said.
IRS should automate name, address changes, AICPA says
A letter to the IRS says that processing times of six to eight weeks or longer for taxpayer name and address changes can create compliance risks and should be reduced through automation.
Taxpayers can now access IRS compliance report online
A new IRS Individual Online Account feature lets taxpayers download a digitally authenticated compliance report for use when applying for jobs, loans, government benefits, and other services.
Proposed rules would restrict Trump account eligible investments
The IRS proposed regulations that would limit Trump account investments to low-fee stock index funds and ETFs during the growth period.
IRS shifts approach to conservation easement disputes
The agency said it has ended its latest conservation easement settlement initiative and is creating a new office to coordinate strategy for such cases.
IRS provides guidance on rollovers between retirement plans and IRAs
Use of the sample forms and proposed rollover procedures in the guidance is optional for plan sponsors.
IRS staffing cuts delayed paper returns and refunds, report says
For most taxpayers, the 2026 filing season was normal, a government report says. Those who filed paper returns or relied on paper refund checks faced delays because of a smaller IRS workforce and technology problems.
Trump account prop. regs. clarify $2,500 limit for workers
The proposed regulations, which the IRS said would affect millions of children, families, and employers, also address self-employed owners, Sec. 125 cafeteria-plan contributions, and employer matching of the government’s $1,000 pilot-program contribution.
IRS updates overtime deduction FAQs, adds reporting details
Workers generally may claim the overtime pay deduction only for amounts reported on Form W-2, Wage and Tax Statement, beginning in tax year 2026, according to updated IRS FAQs. The IRS also clarified that the deduction does not make overtime pay exempt from gross income.
IRS adds notices, payment features to business tax accounts
Eligible businesses and organizations can now view more digital notices, make payments on installment agreements, and obtain EIN verification documents online.
IRS guidance addresses expanded paid family and medical leave credit
The guidance explains how employers can claim the expanded credit for paid family and medical leave beginning in 2026 using a premium-based method.
IRS warns crypto holders about fake compliance portal scam
The IRS said fraudsters are mailing letters that direct digital asset holders to a bogus “Digital Asset Compliance Portal” that mimics IRS.gov to collect personal information.
Taxpayers’ rights and the IRM: Part 1
Acquaintance with relevant Internal Revenue Manual provisions can aid practitioners in protecting clients’ rights in tax controversies.
INDIVIDUALS
Current Developments in Taxation of Individuals: Part 1
This update surveys recent federal tax developments involving individuals, including court cases, rulings, and guidance issued during the six months ending October 2025.
