Issue 1 – IRS Resumes Normal Activities Following the 2025 Lapse in Appropriations

Tax Exempt and Government Entities. The IRS has fully resumed processing:

• Determination letter and voluntary compliance statement applications for retirement plans. Visit Tax Information for Retirement Plan 📌 for additional information.
• Applications for tax-exempt status. Please see IRS processing of exemption applications 📌 for any actions tax professionals may need to take while waiting for the IRS to issue a determination.
• Forms 8038-CP 📌 . Return for Credit Payments to Issuers of Qualified Bonds, for refundable credit payments on direct pay bonds.

 Issue 2 – Guidance for Individuals Who Received Tips or Overtime During Tax Year 2025 – Notice 2025-69

Examples of how the rules work for tipped employees

Waiter with reported tips in box 7, Form W-2

Bartender with additional reported tips on Form 4137

Self-employed travel guide

No Tax on Overtime

• Maximum annual deduction is $12,500 ($25,000 for joint filers).
• Deduction phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers).
• The deduction is available for both itemizing and non-itemizing taxpayers.

 Issue 3 – Guidance on Tax Benefit for Lenders on Loans Secured by Farm or Rural Property Under the One, Big, Beautiful Bill

 Issue 4 – Social Security Commissioner Shares End of Fiscal Year Update with Congress

 Issue 5 – Will Student Loan Discharge Be Taxed?

• Impacted Borrowers: Approximately 7 to 7.7 million federal student loan borrowers are currently enrolled in the SAVE plan.
• Plan Termination: Under the proposed settlement, the U.S. Department of Education would immediately cease enrolling new borrowers, deny pending applications, and transition current enrollees to other legally compliant repayment options.
• Timeline: The settlement is awaiting approval from a U.S. District Court judge in Missouri. If approved, affected borrowers will have limited time to select a new repayment plan.
• Justification: The administration stated the action is intended to "right this wrong" and enforce the position that borrowers must repay their loans as mandated by Congress.
• Interest Accrual: The Education Department had already resumed interest charges on SAVE borrowers' accounts as of August 1, 2025, while the legal battle played out.

 Issue 6 – Treasury Inspector General Releases 2026 Plans

 Issue 7 – President Withdraws IRS Chief Counsel Nominee

 Issue 8 – Reminder: Tax Professionals Have Until Dec. 31 to Renew Their Preparer Identification Number

• Create an account using their name and an email address that they can always access
• Review the PTIN application checklist: 📌 What you need to get started
• Complete the online application by providing personal information, tax return information and professional credentials
• Pay the PTIN fee by credit, debit or ATM card or eCheck.

• Using the PTIN system, tax professionals can also:
• See a list of their completed continuing education courses
• View a summary of the number returns filed using their PTIN during the year
• Receive communications through a secure mailbox from the IRS Return Preparer Office
• Track their progress toward participating in the IRS Annual Filing Season Program 📌.

 Issue 9 – New Login.GOV PTIN Registration Sign-In Process

Dear Tax Professional:

Existing Login.gov users

New PTIN System users

• www.irs.gov/ptin 📌 for more information about the PTIN program
• www.irs.gov/registerhelp 📌 for more information about ID.me and Login.gov

 Issue 10 – IRS Issues Guidance on Tax Law Updates from One, Big, Beautiful Bill

• Income tax, credits, deductions
• Family and dependent credits
• Business credits and deductions
• Investment and community development
• Clean energy
• Tax exempt entities, charitable deductions and giving
• Latest news
• Guidance and additional resources

 Issue 11 – New Guidance on Trump Accounts Notice 2025-68

Who can contribute / funding sources: Over time, funding can come from:

• The $1,000 pilot payment
• “Qualified general contributions” — e.g. from states, certain governments, or eligible charities/501(c)(3) orgs.
• Employer-made contributions under a “Trump Account contribution program” (per new section 128). Employers may contribute up to $2,500 per year per employee (regardless of number of dependents), which counts toward the general contribution cap.
• Voluntary contributions by family, friends, or others — up to an aggregate limit of $5,000 per year (subject to indexing for inflation after 2027) for private contributions + employer contributions together. Investment limitations: Funds in Trump Accounts during the “growth period” must be invested in specific eligible investments — generally mutual funds or exchange-traded funds (ETFs) that track the S&P 500 or comparable U.S.-equity indexes.

Growth-Period Restrictions & Transition to Traditional IRA

Administrative / Regulatory Process & What’s Next

What This Means for Families / Children / Taxpayers

• Automatic “starter money” — For eligible children (born Jan 1, 2025–Dec 31, 2028), the government contributes a one-time $1,000 seed deposit at account creation.
• Long-term growth potential — If parents (or others) add contributions annually, invested in broad U.S. equity indexes, the account could grow substantially over many years.
• Flexible funding sources — Contributions to a child’s Trump Account aren’t limited to parents: grandparents, other relatives/friends, employers, charities or even certain government entities can contribute (though total contributions are capped annually).
• Employer contribution opportunity — Up to $2,500 per year may come from an employer (for employee’s dependent child) and this employer contribution doesn’t count toward the employee’s taxable income.
• Tax-deferred growth — Like other IRAs, earnings should grow tax-deferred until withdrawal (subject to applicable tax/IRA rules once child reaches eligible age).
• Potential “head start” for financial security — For families who contribute regularly, a Trump Account may act as a long-term savings vehicle — usable after child turns 18 (or later) for retirement-like savings or other adult purposes.
• Broad investment approach (simple, diversified) — Required investments are low-cost, broad U.S. equity index mutual funds or ETFs (e.g. S&P 500–type funds), which tends to be a mainstream, diversified, “set-and-forget” investing strategy.
• Potential for outside funding — Charities or nonprofits, or philanthropic gifts (such as large donations by wealthy benefactors) may enhance the savings potential beyond what a typical family alone could contribute.

• No tax deduction for contributions — Unlike some retirement accounts, contributions (by parents or others) are made with after-tax dollars; you don’t get an upfront deduction.
• Strict investment constraints — The money must be invested in approved low-cost broad U.S. stock index funds/ETFs. Sector funds, leverage, alternative investments, or individually picking stocks likely aren’t allowed.
• Funds are locked until child turns 18 — Withdrawals generally cannot be made prior to age 18 (with only limited exceptions like death or rollover). That means money isn’t accessible for things like education, emergencies, or earlier needs.
• Uncertainty about taxation upon withdrawal — Once converted to a traditional-IRA–style account at age 18, typical IRA tax/timing/withdrawal rules will apply (e.g. early-withdrawal penalties, tax on distributions). That reduces flexibility compared to some education-savings or savings-for-any-purpose accounts.
• Not optimal for short- or medium-term goals — Because of the lock until 18 and the long-term growth orientation, this is not a good tool if you anticipate using savings early — e.g. for tuition, housing, or other needs before adulthood.
• Opportunity cost / parental liquidity tradeoff — Committing to regular contributions means parents are diverting money that might otherwise go to more immediate needs (education, emergencies, debt, etc.). The long horizon may not align with all families’ priorities.
• Dependence on market performance — Because funds are invested in equities, growth depends heavily on the stock market. Poor returns or a prolonged downturn could reduce expected benefits (compared with more conservative vehicles).
• Less flexible than other options for some use-cases — For example, traditional education-savings vehicles (like 529 plans — or other child-savings/529 + savings combos) may offer better flexibility or tax treatment for tuition or early-life expenditures.
• Regulatory and implementation uncertainty (for now) — As of the guidance, the rules are new; there might be changes before final regulations. The system for opening, managing, and rolling over accounts may evolve.
• Risk of underuse or abandonment — If parents or guardians don’t contribute — or forget / neglect to actively manage the account — the value of the seed $1,000 alone may not offset inflation or provide meaningful growth.

 Issue 12 – IRS sets 2026 business standard mileage rate at 72.5 cents per mile, up 2.5 cents

• 72.5 cents per mile for business standard mileage 📌, up 2.5 cents
• 20.5 cents Moving, decrease by 5 cents
• 20.5 cents Medical, decrease by 5
• 14 cents per mile driven in service of charitable organizations

 Issue 13 – Treasury, IRS Provide Guidance on New Tax Benefits for Health Savings Account Participants under the One, Big, Beautiful Bill

IR-2025-119 📌

The OBBB expands access to HSAs by making the following changes:

• Telehealth and Remote Care Services: The OBBB made permanent the ability to receive telehealth and other remote care services before meeting the high-deductible health plan (HDHP) deductible while remaining eligible to contribute to an HSA, effective for plan years beginning on or after Jan. 1, 2025.
• Bronze and Catastrophic Plans Treated as HDHPs: As of Jan. 1, 2026, bronze and catastrophic plans available through an Exchange are considered HSA-compatible, regardless of whether the plans satisfy the general definition of an HDHP. This expands the ability of people enrolled in these plans to contribute to HSAs, which they generally have not been able to do in the past. Notice 2026-05 clarifies that bronze and catastrophic plans do not have to be purchased through an Exchange to qualify for the new relief.
• Direct Primary Care Service Arrangements: Beginning Jan. 1, 2026, an otherwise eligible individual enrolled in certain direct primary care (DPC) service arrangements may contribute to an HSA. In addition, they may use their HSA funds tax-free to pay periodic DPC fees.

 Issue 14 – House Passes Fair and Accountable IRS Reviews Act and the Tax Court Improvement Act Both Head to the Senate – Not Law Yet

House Passes the Tax Court Improvement Act.

 Issue 15 – IP PIN Service Under Maintenance Until January 2026

 Issue 16 – New Contact Information for Collection Advisory Offices

 Issue 17 – Improvements to the Adoption Tax Credit Make Adoption More Affordable

• The credit can be claimed for eligible expenses related to international, domestic, private and public foster care adoptions.
• The maximum Adoption Credit taxpayers can claim on their 2025 tax return is $17,280 per eligible child.
• This credit is now partially refundable, meaning taxpayers may get back more than what is owed in taxes The refundable amount is up to $5,000 per qualifying child for tax years 2025 and after. However, any nonrefundable amount carried forward can’t be used to calculate a refundable portion for future tax years.
• An eligible child must be younger than age18. If the adopted person is older, they must be unable to physically or mentally take care of themselves.
• Indian tribal governments now have the same authority as State governments to determine whether a child has special needs for the purpose of claiming the Adoption Credit. Taxpayers who adopt an eligible U.S. child with special needs may be able to claim the credit even if they didn’t pay any qualified adoption expenses.
• Taxpayers who adopt their spouse's child can't claim this credit.
• Taxpayers who carry out a surrogate parenting agreement do not qualify for the credit.

• Reasonable and necessary adoption fees
• Court costs and legal fees
• Adoption related travel expenses like meals and lodging
• Other expenses directly related to the legal adoption of an eligible child

 Issue 18 – Banking Options Now That Paper Checks Have Been Discontinued

• Direct Deposit to a Bank Account: This is the fastest and most common method. You will need to provide your bank account's routing and account numbers on your tax return. You can deposit your refund into a checking account, savings account, or even certain retirement accounts. You can also split your refund into up to three different accounts using Form 8888, Allocation of Refund 📌.
• Prepaid Debit Cards: If you do not have a traditional bank account, many reloadable prepaid debit cards have associated routing and account numbers that you can use for direct deposit.
• Digital Wallets: Some mobile apps and digital wallets can accept direct deposits. You should check with your provider to ensure you have the correct routing and account numbers to enter on your tax return.

• IRS Direct Pay: A free service that allows you to schedule payments directly from your bank account.
• Electronic Federal Tax Payment System (EFTPS): A free service best for individuals or businesses making large or recurring payments. Enrollment is required.
• Debit or Credit Card/Digital Wallet: You can pay online, by phone, or through the IRS2Go 📌 app using an authorized third-party payment processor (which may charge a fee).
• Electronic Funds Withdrawal (EFW): This option is available only when you file your tax return electronically using tax software or a tax professional.

 Issue 19 – Applicable Federal Rates for January 2026, Rev. Rul. 2026-2

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Adjusted federal long-term rate for the current month	3.51%
Long-term tax-exempt rate for ownership changes during the current month (the highest of the adjusted federal long-term rates for the current month and the prior two months.)	3.51%

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Appropriate percentage for the 70% present value low-income housing credit	7.98%
Appropriate percentage for the 30% present value low-income housing credit	3.42%

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Applicable federal rate for determining the present value of an annuity, an interest for life or a term of years, or a remainder or reversionary interest	4.60%

Deemed rate of return for transfers during 2026 to pooled income funds that have been in existence for less than 3 taxable years	4.00%

For purposes of section 7702(f)(11), the average of the applicable federal mid-term rates (based on annual compounding) for the 60-month period ending December 31, 2025 is	3.19% rounded to 3%
IRS Applicable Federal Rates page 📌    Rev. Rul. 2026-2 📌