The IRS announced inflation-adjusted limits on benefits and contributions for various retirement accounts on Thursday, including maximum contribution amounts for 401(k) plans and traditional and Roth IRAs.
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TOPICS / TAX
IRS practice & procedure
Almost 1,400 IRS employees receive layoff notices, adding to staff losses
In court documents filed in a lawsuit, officials said 1,446 Treasury employees received reduction-in-force notices, including 1,399 at the IRS.
IRS ends Direct File, shifts focus to Free File upgrades and private sector
The IRS cited low usage and high costs as reasons for shuttering the program, which began during the previous administration.
Real estate tax changes that advisers need to understand
A firm partner and AICPA conference speaker breaks down rule changes related to bonus depreciation and opportunity zone investment. Listen to the podcast episode or read the Q&A.
Employers get reporting relief on tips, overtime; won’t face penalties for tax year 2025
An IRS notice says employers won’t face penalties if they don’t provide a separate accounting of cash tips and overtime compensation for tax year 2025 under H.R. 1.
Tax Court allows ordinary deduction of termination fees
Rights and obligations of an agreement pursuant to which the taxpayer paid a “break fee” terminating a proposed merger were in the nature of services, the court held, denying the IRS’s recharacterization of the fee under Sec. 1234A as a capital loss.
Sixth Circuit affirms application of split-dollar regulation
A life insurance policy’s premiums were held nondeductible by a dentist’s practice, and its increase in cash value was taxable income to the dentist.
Frivolous arguments rejected by Tax Court
Cut-and-paste “gibberish” from tax-protester websites does not produce winning arguments.
Congress passes bill requiring IRS to clarify math error notices
The AICPA praised the Senate passage of the bill, saying it will enhance IRS operations and improve the taxpayer experience.
AICPA seeks IRS guidance on tip, overtime tax deductions for 2025
The AICPA said taxpayers and tax professionals need certainty about how to claim the deductions for 2025. The IRS has said it will not update its forms until 2026.
IRS offers relief on car loan interest reporting under H.R. 1
The agency said it is providing the relief because both lenders and the IRS need more time to comply with the new car loan interest reporting requirements added by H.R. 1.
IRS furloughs nearly half its workers, closes most operations
Under an updated contingency plan, nearly 40,000 of the approximately 74,000 IRS workers will stay on the job, including more than 24,000 in Taxpayer Services. In response to the plan, the AICPA recommended “fair, reasonable, and practical relief measures to mitigate the negative impact of the shutdown” on taxpayers and practitioners.
Annual inflation adjustments announced for tax year 2026
The IRS published annual inflation adjustments for more than 60 tax provisions for tax year 2026, in addition to changes to the standard deduction for tax year 2025.
Shutdown concerns, the quest for tax guidance, the future of IRS service
An AICPA tax leader provides context on IRS operations during a shutdown, why guidance is needed in particular this year for tax practitioners, and why the definition of filing season is “a point of contention.” Listen to the podcast episode or read the Q&A.
Social Security Administration head to also serve in new IRS role
Treasury Secretary Scott Bessent said Monday that Frank Bisignano, the commissioner of the Social Security Administration, will serve in the newly created role of CEO of the IRS.
AICPA calls for fully staffed IRS regardless of shutdown length
With an Oct. 15 tax deadline looming for many and guidance needed on H.R. 1, the AICPA says it’s imperative that the IRS keep all employees on the job.
Job cuts mean strong 2025 tax season may be hard to repeat, IRS watchdog warns
Critical staff stayed on the job for this year’s tax season, but that won’t be the case in 2026, the Treasury Inspector General for Tax Administration said in a new report.
IRS removes associated property rule in final interest capitalization regulations
The final regulations make minor clarifying changes to proposed regulations issued last year.
Spouse is not entitled to sales proceeds in a judicial sale of taxpayer’s home
A taxpayer’s spouse lacked an interest in the home under state law, the Eighth Circuit held.
IRS fails to meet its burden that a valid notice of deficiency was mailed timely
The IRS was not entitled to a presumption of proper mailing for a notice with an erroneous address that it contended the taxpayer nonetheless received timely, the Tax Court held.
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From The Tax Adviser
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