IRS practice & procedure

The AICPA’s vice president–Tax Policy & Advocacy said President Donald Trump’s executive order to freeze hiring at the IRS should not affect seasonal employees, who likely are already hired and trained.

Danny Werfel, who had two years remaining on his term, said he made the decision after “significant introspection and consultation.” An AICPA statement praised Werfel for “moving the IRS in the right direction to improve taxpayer services and start instituting modern technologies.”

The final regulations, which include 24 exceptions to consideration of federal tax controversies by the Independent Office of Appeals, generally follow the proposed regulations issued in October 2022.

New pilot programs involve fast-track settlements and post-appeals mediation.

The IRS said it used feedback from tax advisers to write the proposed regulations, which include new multiyear tax reporting requirements.

The final regulations, posted by the IRS on Tuesday in the Federal Register, identify certain microcaptive transactions as reportable listed transactions or transactions of interest.

IRS Commissioner Danny Werfel said he expects the 2025 filing season to build on the success of the two previous seasons if Congress maintains funding.

The final regulations, which the IRS issued Friday, make several changes to the proposed regulations, including a higher dollar threshold for a basis increase in transactions of interest.

The national taxpayer advocate’s first report to the new Congress highlighted the need for money devoted to taxpayer services and technology.