The invalidation by the Federal Circuit of the rule and its removal by the IRS affect the treatment of interest on certain improvements to designated property.
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TOPICS
IRS Practice & Procedure
Penalties under codified economic substance doctrine upheld
The taxpayers’ deductions from microcaptive insurance transactions lacked economic substance under Sec. 7701(o), the Tax Court held, upholding a Sec. 6662(b)(6) underpayment penalty.
Refund suit dismissed because Flora full-payment rule not met
Debts discharged in bankruptcy not fully paid for purposes of the Flora full-payment rule.
IRS should open Trump accounts for eligible children automatically, AICPA says
In a letter to the IRS and Treasury, the AICPA said enrolling children by default “would promote equitable access, reduce procedural barriers, and strengthen the intended reach of the program.”
GAO says tax pros helped shape IRS response to ERC issues
The report to Congress also recommends four ways for the IRS to close the chapter on the pandemic-era credit.
Anticipated applicability date for future final RMD regs. announced
The IRS said it anticipates that the future final regulations on RMDs under Sec. 401(a)(9) will apply for the distribution calendar year that begins no earlier than six months after those regulations’ appearance in the Federal Register.
AICPA seeks guidance on Sec. 174A(c) capitalization and amortization of R&E
Requested guidance can be provided through modifications to Rev. Proc. 2025-28 and/or other published guidance.
Average tax refund rises 11%; total filings decline
The average individual tax refund is up nearly 11% in the first 10 business days of the 2026 filing season, rising to $2,290 from $2,065 last year.
IRS broadens Tax Pro Account for accounting firms and others
The update allows firms that serve larger numbers of taxpayers to manage centralized authorization file access, view client information, and streamline authorizations online.
AICPA urges Treasury, IRS to simplify Sec. 951 documentation rules
The AICPA told Treasury that Notice 2025 75’s “determine and document” requirement is “ambiguous and potentially onerous” and urges replacing it with a simple safe harbor or eliminating it.
IRS will stay fully staffed for first 5 days of shutdown
Treasury posted a lapsed appropriations contingency plan late last week that calls for the IRS to be fully staffed through Friday during the partial government shutdown.
Murrin and Zuch provide insight into the limits of taxpayers’ rights
Taxpayers, such as those in Zuch and Murrin, can face unique circumstances where the law overrides their intentions.
IRS generally eliminates 5% safe harbor for determining beginning of construction for wind and solar projects
A notice limits methods of meeting a key deadline for project eligibility for two clean energy credits, which recent legislation terminated after 2027.
IRS rules that community trust and affiliated nonprofit corporation can file a single Form 990
The ruling hinges on the corporation and trust being treated as a single entity and meeting other requirements under Regs. Sec. 1.170A-9(f)(11).
White House makes recommendations on digital asset transactions
A presidential working group’s report advocates the United States implement the OECD’s Crypto-Asset Reporting Framework, an international reporting regime, as well as guidance by the IRS and Treasury.
Representing taxpayers with IRS identity protection and theft victim assistance
Tax-related identity theft remains widespread and a potentially serious problem for victims, for whom authorized representatives can provide vital help.
IRS met written-supervisory-approval requirement for penalty
Sec. 6752(1)(b) was satisfied by an IRS supervisor’s timely signed approval of penalties against the taxpayer, without any “meaningful review” or “reasoned decision-making,” the Tax Court held.
Effects of the OBBBA on higher education
Amid new limitations, strategies remain for optimizing tax-efficient support for colleges and universities.
New law, IRS workforce cuts raise red flags for tax season, reports say
Separate reports from two federal oversight bodies warn that the IRS may struggle to maintain service levels between now and April 15, possibly causing delays in tax refunds and in getting answers by phone.
SECURE 2.0 amendment deadline extended for IRAs, other retirement plans
The IRS extended the deadline for SECURE 2.0 related amendments to IRAs, SEPs, and SIMPLE IRAs to Dec. 31, 2027, saying that additional time is needed to complete model language.
TAX PRACTICE MANAGEMENT
2025 tax software survey
AICPA members in tax practice assess how their return preparation software performed during tax season and offer insights into their procedures.
