Treasury and the IRS proposed regulations for the education freedom tax credit, a new federal credit under Sec. 25F for contributions to organizations that provide scholarships to eligible elementary and secondary schools.
Advertisement
TOPICS
Tax
Senate approves taxpayer-focused reforms backed by AICPA
The Senate unanimously approved the Taxpayer Assistance and Service Act, a bipartisan package of 65 tax administration reforms backed by the AICPA. The measure now moves to the House.
Line items
IRS raises standard mileage rates for remainder of 2026 … IRS designates certain CRAT arrangements as listed transactions … Eligible taxpayers to get automatic IRS penalty relief … IRS offers gift tax safe harbor for contributions to Trump accounts … IRS outlines AI risks, Circular 230 duties for tax practitioners … Advocate: IRS had strong filing season for online taxpayers, weaker one for others
TIGTA finds shortcomings in IRS’s chat service
An audit by the Treasury Inspector General for Tax Administration concluded that the IRS’s chatbot and live chat applications used by the Automated Collection System lacked performance measures, reliable data, and adequate performance.
Error in tax liability estimate does not void extension request or bar refund
The Court of Federal Claims ruled that the taxpayers’ reporting error on Form 4868 did not invalidate their automatic filing extension and that they were entitled to a refund of their 2016 tax overpayment.
Proof-of-stake rewards are gross income in year of receipt
Cryptocurrency tokens a taxpayer received as staking rewards were includable in gross income in the year of receipt despite a restriction on the tokens’ transfer to another cryptocurrency wallet.
IRS changes course to allow automatic Trump account enrollment
Treasury and the IRS issued proposed and temporary regulations providing for automatic enrollment in Trump accounts after developing a structure they said overcame barriers that previously stymied the move. Treasury estimated the approach could create more than 60 million additional accounts.
GAO tax fraud estimate puts annual losses at up to $304 billion
A first-of-its-kind GAO analysis estimates annual federal tax fraud losses at $116 billion to $304 billion. The report said that the IRS needs a coordinated antifraud strategy. The IRS partially agreed with the recommendations but disputed aspects of the report’s methodology.
IRS launches mobile app with expanded account access
After 15 years as IRS2Go, the IRS’s taxpayer app now offers expanded access to account services under a new name. The IRS said it expects to add more capabilities to the app over time.
Identity theft victims waited 20 months for IRS case resolution
A TIGTA report found that IRS delays in resolving identity theft cases cost the government $124.2 million in refund interest from fiscal years 2023 through 2025. The findings echo warnings from National Taxpayer Advocate Erin Collins, who has called the wait times “unconscionable.”
IRS finalizes increase in estate tax closing letter fee
The IRS issued final regulations increasing the cost of an estate tax closing letter to $76 from $56, adopting without change proposed regulations issued in June.
IRS raises per diem rates for business travel effective Oct. 1
In its annual update, the IRS increased the special per diem rates taxpayers may use to substantiate business travel expenses for the upcoming travel year and updated its list of high-cost localities.
AICPA, former IRS commissioner to lead initiative on AI in tax
Participants in the Council on AI Risk in Tax, led by the AICPA and former IRS commissioner Danny Werfel, include leaders from all areas of the tax world who will work together to promote the responsible use of AI in tax administration and practice.
IRS cyber weaknesses put taxpayer data at risk again, TIGTA says
For the second consecutive year, a government watchdog found the IRS’s cybersecurity program ineffective. TIGTA warned that taxpayer data could be vulnerable if security weaknesses are not addressed.
Unclear instructions, limited awareness plagued CP53E rollout, TIGTA says
Many CPAs and their clients experienced confusion over IRS CP53E notices during the 2026 filing season. A TIGTA report confirms those concerns and sheds new light on how the IRS implemented its paperless-payment initiative.
Government says Kwong court misread COVID tax relief law
In its opening brief to a federal appeals court Wednesday, the federal government said a lower court ruling in Kwong improperly turned a 60-day extension into a postponement period lasting over three years.
IRS delayed action on thousands of high-income nonfiler cases, TIGTA says
A TIGTA report found that nearly 39,000 high-priority nonfiler cases were delayed in the IRS’s high-income nonfiler initiative because of resource concerns. The IRS said it has since advanced all affected cases.
AICPA seeks IRS clarity on AI guidelines, CPA fees
The AICPA is seeking clarification from the IRS on guidelines suggesting that tax practitioners should pass AI-related cost savings on to clients. Concerns about language in the guidelines include the implication of not allowing for a value-pricing model and overlooking the costs of implementing and governing the technology.
Congress approves funding bill that maintains IRS budget
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.
A recipe for sanctions: AI-hallucinated citations in tax
AI can speed tax research, but it can also invent cases. Your firm needs guardrails to avoid potential trouble.
Features
SPONSORED REPORT
Get your clients ready for tax season
Help clients avoid surprises with year-end planning strategies for managing taxable income, maximizing deductions, and adjusting to OBBBA changes affecting individuals and businesses.
From The Tax Adviser
September 30, 2026
Navigating the QSBS rules in pass-through structures
September 30, 2026
Sec. 338(h)(10) elections in business acquisitions
August 31, 2026
