IRS practice & procedure

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.

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.

The IRS proposed regulations that would limit Trump account investments to low-fee stock index funds and ETFs during the growth period.

The agency said it has ended its latest conservation easement settlement initiative and is creating a new office to coordinate strategy for such cases.

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.

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.

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.

Eligible businesses and organizations can now view more digital notices, make payments on installment agreements, and obtain EIN verification documents online.

The guidance explains how employers can claim the expanded credit for paid family and medical leave beginning in 2026 using a premium-based method.

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.

The Senate Finance Committee approved the Taxpayer Assistance and Service Act, legislation backed by the AICPA that would modernize IRS operations, expand taxpayer services, and give the IRS authority to deny, revoke, or suspend preparer tax identification numbers.

The midyear change follows an increase in gasoline prices, according to the IRS. It is the first such midyear adjustment since 2022.

The final regulations target arrangements that the IRS says improperly use charitable remainder annuity trusts and annuities to eliminate ordinary income and capital gain on the sale of property.

Under the new system, eligible taxpayers will no longer have to request penalty relief that the IRS says is routinely granted.

Certain taxpayers with IRS online accounts can file a Kwong-related refund claim on Form 843 through a new secure application before a Friday deadline.