IRS Reminder for Oct. 15 Filing Deadline (IR-2025-104)

• Date: Oct 14, 2025. Applies to tax year 2024 returns for those who filed extensions.
• Deadline: Oct 15 (midnight). IRS urges e-filing and electronic payments; paper filers can use Form 1040 and instructions for mailing addresses.
• Government shutdown note: Filing and payment obligations remain in effect; IRS will accept/process payments by mail or electronically.
• Possible extensions:

IRS Inflation Adjustments for Tax Year 2026 (IR-2025-103)

• Applies to 2026 returns filed in 2027; detailed in Revenue Procedure 2025-32.
• Standard deduction (2026): $32,200 MFJ; $16,100 Single/MFS; $24,150 HOH. Note: OBBB set 2025 SD at $31,500 MFJ; $15,750 Single/MFS; $23,625 HOH.
• Marginal brackets (Single; MFJ): 37% over $640,600; $768,700. 35% over $256,225; $512,450. 32% over $201,775; $403,550. 24% over $105,700; $211,400. 22% over $50,400; $100,800. 12% over $12,400; $24,800. 10% up to $12,400; $24,800.
• AMT exemption (2026): $90,100 Single (phaseout starts $500,000); $140,200 MFJ (phaseout starts $1,000,000).
• Estate tax exclusion: $15,000,000 (up from $13,990,000 in 2025).
• Adoption credit: Up to $17,670; up to $5,120 refundable.
• Employer-provided childcare credit (for employers): Max increased to $500,000 ($600,000 for eligible small businesses) under OBBB.
• Other indexed items:
• Unindexed items:

Treasury/IRS Penalty Relief for Remittance Transfer Providers (IR-2025-102)

• Date: Oct 7, 2025. IRS issues Notice 2025-55 granting limited deposit penalty relief for the first three quarters of 2026 related to the new remittance transfer excise tax under the One, Big, Beautiful Bill (OBBB).
• Relief conditions: Providers avoid deposit penalties if they make timely deposits (even if miscalculated) and pay any underpayment by the Form 720 due date for that quarter.
• Safe harbor: Providers may use excise tax deposit safe harbor rules for Q1–Q3 2026 despite underpayments, but must meet the reasonable cause standard.
• Tax details: Starting Jan 1, 2026, providers must collect a 1% tax on certain remittances made with cash, money orders, cashier’s checks, or similar instruments; make semimonthly deposits; and file quarterly returns. First deposit due Jan 29, 2026.
• More info: See Notice 2025-55 and Form 720 guidance.

Jarod Koopman to Lead IRS Enforcement (Acting CTCO)

• Jarod Koopman named Acting Chief Tax Compliance Officer, overseeing enforcement divisions: LBI, SB/SE, TE/GE, Criminal Investigation (CI), Office of Professional Responsibility, Return Preparer Office, and Whistleblower Office.
• Background: CI executive since 2016; built Cyber Crimes and Cyber and Forensics Services; led IRS-CI’s growth in crypto tracing and dark web investigations.
• Field leadership: Former ASAC in Chicago and SAC in Detroit; managed sensitive, high-profile cases in MI and IL.
• Earlier roles: Supervisory Special Agent (W.D.N.Y.), Senior Analyst at IRS HQ (ASLP graduate), worked on identity theft as a national priority in 2012.
• Bio: Upstate NY native; Nazareth University graduate; FLETC and IRS-CI training top graduate.
• Additional leadership move: Stewart Pearlman to serve as acting Deputy Chief in CTCO; prior roles include acting Deputy COO, ACA IT team lead, CIO Chief of Staff, and Procurement Chief of Staff (2019–2025).

IRS Appeals Launches Post Appeals Mediation (PAM) Pilot

• The IRS Independent Office of Appeals launched a two-year pilot to make PAM more attractive to taxpayers.
• Under the pilot, mediation cases are reassigned to an Appeals team not connected to the original case to provide a fresh, expedited look; other PAM features remain unchanged.
• PAM occurs after an unsuccessful Appeals process and typically lasts one day, with a neutral Appeals mediator; taxpayers may add a co-mediator at their expense.
• Goal: enhance ADR offerings, improve taxpayer experience, and encourage faster, mutually acceptable resolutions before potential litigation.
• Appeals also promotes broader use of its five ADR programs: Fast Track Settlement, Fast Track Mediation—Collection, PAM, Rapid Appeals Process, and Early Referral.
• Contact for questions: ap.adr.programs@irs.gov.

Volunteers Needed for No-Cost Tax Services (VITA/TCE)

• IRS and community partners are recruiting volunteers for VITA (Volunteer Income Tax Assistance) and TCE (Tax Counseling for the Elderly) for the upcoming filing season.
• Who they help: EITC-eligible taxpayers, people with disabilities, limited English speakers, seniors, and other underserved groups.
• No experience required: Free IRS training provided; roles include greeters, preparers, marketing, and IT support.
• Flexible options: Nationwide sites, in-person and virtual; evening/weekend hours available.
• Tax pros: Eligible for IRS CPE credits (EAs, non-credentialed preparers, CTEC/CRTP).
• When to sign up: October–January for this season; later sign-ups are kept for next season. Recent sign-ups (last 2 months) don’t need to reapply unless contact info changed.
• How to sign up: Visit IRS.gov/volunteers or use the VITA/TCE Volunteer and Partner Sign Up; expect local site options and a virtual orientation within ~14 days.

IRS Extends Feedback Period on Form 6765 (Research Credit)

• Comment period for draft Instructions to Form 6765 extended through March 31, 2026; IRS plans revised instructions in Jan 2026 (for TY 2025/processing 2026).
• Section G of Form 6765 will be optional for all filers for tax year 2025.
• Starting tax year 2026 (processing 2027), Section G becomes mandatory for all filers, with optional reporting for:
• Research credit claim transition period (45 days to perfect refund claims) extended through Jan 10, 2027.
• Refund claims postmarked after June 18, 2024 must identify business components, related research activities, and totals for qualified wages, supplies, and contract research (Form 6765 may be used).

Guidance on Opportunity Zone Investments in Rural Areas (OBBB)

• Treasury and IRS issued Notice 2025-50 clarifying Opportunity Zone (QOZ) rules for rural areas under the One, Big, Beautiful Bill (OBBB).
• New rural definition: any area not a city/town over 50,000 population and not an adjacent urbanized area to such a city/town; applies across states, DC, and U.S. territories.
• Substantial improvement threshold reduced: for property in QOZs comprised entirely of rural areas, required additions to basis drop from 100% to 50% (effective July 4, 2025).
• Scope: Applies to tangible property in qualifying rural QOZs on/after July 4, 2025 that is being or has been substantially improved.
• Context: Of 8,764 QOZs nationwide, 3,309 are entirely rural. Further guidance is planned on the next round of OBBB-authorized zones (nominations/designations).

IRS Announces New Relief for Taxpayers Affected by Events in Israel

• The IRS is postponing many tax filing and payment deadlines to Sep 30, 2026, for eligible individuals and businesses affected by ongoing events in Israel.
• Covered by Notice 2025-53, building on Notice 2023-71 and Notice 2024-72; collectively, deadlines from Oct 7, 2023 through Sep 30, 2026 may be postponed for eligible taxpayers.
• Applies to affected taxpayers in Israel, the West Bank, and Gaza; returns and taxes due in the covered period can be filed/paid by Sep 30, 2026.
• Automatic relief for taxpayers whose principal residence or business is in the covered area (based on prior filings).
• Others who qualify but have addresses outside the covered area can call the IRS disaster hotline at 866-562-5227 (or +1-267-941-1000 internationally) to request relief.

Treasury, IRS Reduce PTIN User Fee

• Treasury and IRS issued interim final regs and a proposed rule to lower the PTIN user fee for tax professionals.
• New fee: $10 IRS user fee (down from $11) + $8.75 paid to a third-party contractor.
• Effective with the next PTIN renewal cycle beginning Oct 16, 2025. PTIN fee is nonrefundable; penalties may apply for not having/using a valid PTIN.
• Expected volume: 900,000+ initial or renewal applications per cycle over the next three cycles.
• Comments on the proposed rule are due by Oct 30, 2025 via Regulations.gov (reference “IRS” and “REG-108673-25”); mailing address provided for paper submissions.
• PTINs expire Dec 31 each year. Apply/renew online at the PTIN portal (about 15 minutes) or by paper using Form W-12 (about six weeks processing).

IRS to Phase Out Paper Tax Refund Checks

📢 Key Update:

• Starting Sept. 30, 2025, the IRS (with Treasury) will phase out paper tax refund checks for individual taxpayers, per Executive Order 14247.
• This is the first step in a broader transition to electronic payments.

💡 Why the Change?

1. Protect taxpayers: Paper checks are 16x more likely to be lost, stolen, altered, or delayed than electronic refunds.
2. Faster refunds: Direct deposit refunds usually arrive in <21 days; mailed checks may take 6+ weeks.
3. Cut costs: Processing electronic payments is cheaper and more efficient.

👩‍👩‍👧 Impact on Taxpayers:

• Filing unchanged — taxpayers continue filing as usual.
• Refunds go digital — mostly via direct deposit or other secure methods.
• For the unbanked: Options will include prepaid debit cards or digital wallets.
• Act now: IRS urges taxpayers to have valid banking info or consider opening a low-cost/free account (FDIC GetBanked, MyCreditUnion.gov).

📊 Context:

• In the 2025 tax season, IRS issued 93.5M refunds → 93% by direct deposit, only 7% by paper check.

🔜 Next Steps:

• Executive Order 14247 also applies to payments made to the IRS (like taxes owed) — current systems remain until new guidance is issued.
• IRS will publish detailed filing/payment guidance before the 2026 season.
• Updates will be posted on IRS.gov and shared nationwide.

👉 Bottom Line: Paper refund checks are ending. The IRS is going digital to boost security, speed, and savings, with special support to help unbanked taxpayers transition smoothly.

IRS Extends Drought Relief for Farmers and Ranchers

What Happened:

• IRS issued Notice 2025-52, extending tax relief for farmers and ranchers who sold livestock due to drought.
• Relief applies across 49 states, D.C., and other regions with drought (Sept. 2024 – Aug. 2025).

Who Qualifies:

• Eligible: Sales/exchanges of livestock held for draft, dairy, or breeding purposes.
• Not eligible: Livestock raised for slaughter, for sporting purposes, or poultry.

Relief Provided:

• Normally, replacement of drought-sold livestock must occur within 2 years.
• Extended to 4 years due to drought conditions.
• If drought persists, IRS can extend further.
• New rule: Farmers get until the end of the first tax year after the first drought-free year following the 4-year period.
• Example: If the deadline was end of 2025, now extended to the next tax year.

How Eligibility is Determined:

• Based on National Drought Mitigation Center designations of exceptional, extreme, or severe drought.

Further Resources:

• Notice 2006-82: Provides detailed examples of how the rule works.
• Publication 225 (Farmer’s Tax Guide): Guidance for reporting drought sales and other farm tax issues.

Big Picture:
This extension gives affected farmers and ranchers more time & flexibility to restore herds without immediate tax burden, easing recovery from widespread drought impacts.

Treasury & IRS Guidance on Tipped Occupations (One, Big, Beautiful Bill)

Context:

• Guidance issued under the “no tax on tips” provision of the One, Big, Beautiful Bill.
• Proposed regulations identify which occupations customarily receive tips and define what counts as qualified tips eligible for deduction.
• Nearly 70 occupations are listed, ranging from bartenders to water taxi operators.

Occupation Categories (Treasury Tipped Occupation Codes):

1. 100s – Food & Beverage Service
2. 200s – Entertainment & Events
3. 300s – Hospitality & Guest Services
4. 400s – Home Services
5. 500s – Personal Services
6. 600s – Personal Appearance & Wellness
7. 700s – Recreation & Instruction
8. 800s – Transportation & Delivery

Definition of Qualified Tips:

• Must be cash or cash-equivalent, e.g., check, card, gift card, electronic payment (excluding most digital assets).
• Must be voluntary customer payments, or received via mandatory/voluntary tip pools.
• Cannot be service charges automatically added to bills (e.g., a restaurant’s 18% charge for large parties).
• Excludes illegal activity-related payments.

Public Input:

• Comments due by Oct. 23, 2025, submitted via Regulations.gov.

Effective Impact:

• Clarifies which workers can benefit from tip deductions.
• Narrows definition of qualified tips to ensure compliance and prevent abuse.

Treasury, IRS Issue Final Regulations on Roth Catch‑Up Rule & SECURE 2.0

Core Regulation:

• Employees age 50+ can make catch‑up contributions to workplace retirement plans (e.g., 401(k), SIMPLE IRA).
• Under SECURE 2.0, high‑income earners (with wages above certain thresholds) must make these catch‑ups as after‑tax Roth contributions.

Key Updates in Final Regulations:

• Aggregation of wages: Plan administrators can aggregate an employee’s wages from certain separate common‑law employers when determining Roth catch‑up applicability.
• Corrections allowed: Rules for fixing failures to follow Roth catch‑up requirements.
• Deemed Roth elections clarified.
• Puerto Rico coverage: Adjustments for plans covering Puerto Rico participants.

Other Provisions:

• Higher catch‑up contribution limits apply to those aged 60‑63 and for employees in new SIMPLE plans.

Effective Dates:

• Roth catch‑up requirement applies starting in 2027.
• Governmental / collectively bargained plans → may start later.
• Plans can adopt earlier, before 2027, if using a reasonable, good‑faith interpretation of the statute.
• Transition relief (Notice 2023‑62) remains unchanged → expires Dec. 31, 2025.

Big Picture:

• Aims to modernize retirement savings by shifting higher‑income workers into Roth (after‑tax) catch‑ups.
• Provides more clarity for plan sponsors and administrators as they prepare systems and communications before 2027.

IRS Assesses $162 Million in Penalties Over False Tax Credit Claims Tied to Social Media

The IRS has issued a strong warning about a surge in fraudulent tax schemes promoted on social media, which encourage taxpayers to claim false credits like the Fuel Tax Credit or Sick and Family Leave Credit. Since 2022, these scams, often spread by individuals posing as tax experts, have led to thousands of inaccurate returns, resulting in denied refunds and over $162 million in penalties across more than 32,000 cases.

Key Takeaways:

• Scam Traits: Look out for claims that "everyone qualifies" for credits, promises of "easy" or "fast" refunds, instructions to file amended returns without eligibility, and encouragement to ignore IRS letters.
• Consequences: Falling for these scams can lead to delayed or denied refunds, a $5,000 civil penalty for frivolous returns, and further IRS enforcement.
• IRS Advice: Taxpayers who have filed incorrect returns should amend them immediately using Form 1040-X, respond promptly to IRS notices, and seek help from reputable tax professionals or IRS.gov. Suspected scams should be reported to phishing@irs.gov or TIGTA.

The IRS urges taxpayers to exercise caution with social media tax advice and to verify all claims with official sources.

Summary — IRS Urges Emergency Preparedness Ahead of Peak Disaster

As hurricane season peaks and wildfire risks remain high, the IRS urges individuals and businesses to update their emergency preparedness plans during National Preparedness Month. Key steps include safeguarding important documents like tax returns and insurance policies in waterproof, fireproof containers, maintaining detailed inventories of property with photos and descriptions, and creating digital backups. Employers are advised to ensure payroll service providers have fiduciary bonds and to use the Electronic Federal Tax Payment System for secure payments. When federal disasters are declared, the IRS often delays filing and payment deadlines automatically. Uninsured disaster losses may be deductible on tax returns. The IRS provides resources to help reconstruct lost records and encourages everyone to be prepared to minimize disaster impacts.

IRS News Release: Security Summit reminds tax pros to guard against identity theft (Aug. 26, 2025)

The IRS and its Security Summit partners closed out their “Protect Your Clients; Protect Yourself” summer awareness campaign by urging tax professionals to remain vigilant against identity theft. Nearly 300 data breaches reported in the first half of 2025 affected as many as 250,000 clients. The Security Summit — a collaboration of the IRS, state tax agencies, industry, and professionals since 2015 — highlighted threats such as fake “new client” phishing emails, malware, social media misinformation, and scams impersonating the IRS.

Tax pros are encouraged to watch for red flags like unauthorized IRS Online Account access, rejected returns linked to stolen SSNs, or unusual computer activity. Key prevention tools include creating a Written Information Security Plan (WISP), using the “Security Six” (antivirus, firewalls, backup systems, encryption, MFA, VPNs), and enrolling clients in the IRS Identity Protection PIN program.

In case of a breach, practitioners must immediately report incidents to the IRS Stakeholder Liaison, notify state tax agencies, and inform affected clients. The campaign emphasizes staying informed with IRS publications (e.g., 5708, 5293, 4557) and resources like Identity Theft Central. The initiative also coincided with the IRS Nationwide Tax Forum events in summer 2025.

Key points / rates (annual, compounded daily)

• Individuals: 7% for overpayments and 7% for underpayments.
• Corporations: 6% for overpayments; 7% for underpayments.
• Portion of a corporate overpayment exceeding $10,000: 4.5%.
• Large corporate underpayments: 9%.

Legal / calculation context

• Interest rates are set quarterly under the Internal Revenue Code and are expressed as the federal short-term rate plus a statutory number of percentage points.

• For most taxpayers (non‑corporate), overpayment/underpayment = federal short-term rate + 3 percentage points.
• For corporations, underpayment = federal short-term rate + 3 percentage points; overpayment = federal short-term rate + 2 points; large corporate underpayments = federal short-term rate + 5 points; overpayment portion over $10,000 = +0.5 points.

• These rates are computed from the federal short-term rate determined in July 2025.
• Formal announcement of the rates appears in Revenue Ruling 2025-18 and will be published in Internal Revenue Bulletin 2025-37 (dated Sept. 8, 2025).

Summary:The IRS issued frequently asked questions (FAQs) in Fact Sheet 2025-05 to provide guidance on modifications to several energy-related tax provisions under the One Big Beautiful Bill Act (OBBB). These FAQs clarify the accelerated termination dates for energy credits and deductions, including sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D.

Key Points:

• Guidance on expiring energy credits and deductions under OBBB
• Clarifications on the availability of the new clean vehicle credit
• Information on the energy efficient home improvement credit
• Details on the residential clean energy credit
• Additional information about reliance on these provisions

Summary:The IRS announced that for Tax Year 2025, there will be no changes to certain information returns or withholding tables related to the One Big Beautiful Bill Act. This decision is part of a phased implementation to avoid disruptions during the tax filing season and to allow sufficient time for effective implementation.

Key Points:

• Form W-2, existing Forms 1099, Form 941, and other payroll return forms will remain unchanged for Tax Year 2025.
• Federal income tax withholding tables will not be updated for these provisions for Tax Year 2025.
• Employers and payroll providers should continue using current procedures for reporting and withholding.
• The IRS is working on new guidance and updated forms for Tax Year 2026, including changes to how tips and overtime pay are reported.
• Coordination with employers, payroll providers, and tax professionals will ensure a smooth transition.
• Additional guidance will be provided in the coming months about claiming OBBBA-related tax benefits.