Basics & Beyond Monthly Update
Tax Newsletter
September 2026 | Volume 9, Issue 9
September Highlights
Basics & Beyond’s September update highlights practical developments affecting individual taxpayers, tax professionals, and client planning conversations. Use the issue list below to jump directly to the topics most relevant to your practice, then follow the 📌 markers for source materials and additional resources.
Navigation Tips: Click on the Issue # link to jump directly to that section. Click any Basics logo to return to the Issues List. The 📌 icon marks an embedded resource link.
Looking ahead to 2026
If you would like to plan your learning calendar, explore upcoming live webinars and self-paced on-demand options.
In this Month’s Issue
- Issue 1 – Digital Tax Compliance Report
- Issue 2 – Federal Disaster Tax Relief Bill
- Issue 3 – Trump Account Investments and Employer Programs
- Issue 4 – Cryptocurrency IRS Letter Scam
- Issue 5 – Simplified Retirement Plan Rollovers
- Issue 6 – 2026 Paper Refund Delays
- Issue 7 – Final 2026 Form W-2 Changes
- Issue 8 – Charitable Trust Reporting Relief
- Issue 9 – TIGTA Review of IRS Levies
- Issue 10 – Trump Account and DCAP Employer Rules
- Issue 11 – Eligible Trump Account Investments
- Issue 12 – Updated Business Interest FAQs
- Issue 13 – Taxpayer Appeal Rights
- Issue 14 – OPR Warning on Practitioner Delays
- Issue 15 – Paid Family and Medical Leave Credit
- Issue 16 – Qualified Overtime Deduction FAQs
- Issue 17 – FinCEN Ends U.S. BOI Reporting
- Issue 18 – SEC Crypto Asset Rules
- Issue 19 – 2026–2027 CACFP Rates
- Issue 20 – September 2026 AFRs
Issue 1: IRS launches digitally authenticated Tax Compliance Report
New report provides secure, on-demand access through IRS Individual Online Account
The Internal Revenue Service has announced a digitally authenticated Tax Compliance Report available through IRS Individual Online Account.
Taxpayers can securely obtain and download the report when applying for a job, a loan, a government benefit, or another service that requires tax compliance information.
Financial institutions, government agencies, and other organizations that receive the report can use its built-in digital certificate to confirm its authenticity. The certificate also helps protect taxpayer information and maintains the integrity of the report.
“By providing a secure, digitally authenticated report, the IRS is making it easier for taxpayers to access and share important information while protecting privacy and data integrity,” said IRS Chief Executive Officer Frank J. Bisignano.
Key benefits
- Authenticated and secure: Each Tax Compliance Report includes an IRS-issued digital certificate that confirms its authenticity.
- Built-in verification: Verification features are embedded directly in the downloadable file.
- On-demand access: Taxpayers can access and download their report at any time through their IRS Individual Online Account. 📌
- Standardized assurance: Each report includes the same authentication and verification features.
Issue 2: Doug LaMalfa Federal Disaster Tax Relief Certainty Act
Before leaving for August recess, the Senate passed legislation aimed at providing tax relief to natural disaster survivors.
This bill extends the federal tax deduction for qualified disaster-related personal casualty losses and the exclusion from gross income of qualified wildfire relief payments.
Under current law, unreimbursed personal casualty losses arising in a qualified disaster area (qualified disaster-related personal casualty losses) are deductible (as an itemized tax deduction or as part of the standard tax deduction) if such losses exceed $500 per casualty.
A qualified disaster area is an area with respect to which a major disaster has been declared during the period beginning in 2020 and ending 60 days after July 4, 2025, if the incident period begins on or after December 28, 2019, and on or before July 4, 2025.
The bill extends the federal tax deduction for qualified disaster-related personal casualty losses by defining a qualified disaster area as an area with respect to which a major disaster has been declared if the incident period begins on or after December 28, 2019, and before January 1, 2027.
The bill provides that the exclusion from gross income of qualified wildfire relief payments applies to such payments attributable to forest or range fires declared a federal disaster after 2014 and before 2027, regardless of when such payments are received. (Currently, qualified wildfire relief payments attributable to forest or range fires declared a federal disaster after 2014 and received after 2019 and before 2026 may be excluded from gross income.)
The bill awaits the President signature as of August 24, 2026 and expected to be signed into law.
Issue 3: Investment in Trump Accounts Proposed Regulations including Employer Program Requirements
Treasury and the Internal Revenue Service today issued
proposed regulations 📌 on eligible investments for Trump Accounts, a new type of traditional IRA under the Working Families Tax Cuts.
Eligible Investments for Trump Accounts
Funds in a Trump Account may only be invested in eligible investments during the growth period, which begins when the account beneficiary’s initial Trump Account is established and ends on Dec. 31 of the calendar year in which the account beneficiary turns age 17. After the growth period, the eligible investment restrictions no longer apply.
For Trump Accounts, an eligible investment generally is a mutual fund or exchange traded fund that tracks an equity index of primarily U.S. companies, such as the S&P 500 index, does not use leverage, and has annual fees and expenses of no more than 0.1 percent of the balance of the investment in the fund.
If an account beneficiary does not select an eligible investment offered by the trustee, funds in a Trump Account automatically will be invested during the growth period in an eligible investment selected by the trustee.
The proposed regulations provide rules for determining whether an investment is an eligible investment and procedures for a trustee to ensure that funds are invested in an eligible investment. These regulations generally would apply to tax years beginning on or after Jan. 1, 2026.
Sign up for a Trump Account and the Pilot Program
Parents, guardians, and other authorized individuals, can use
IRS Individual Online Account 📌 to complete
Form 4547, Trump Account Election(s) 📌 to open a Trump Account for a child with a Social Security number if the election is made before the calendar year in which the child turns age 18. If that child is a U.S. citizen born in 2025 through 2028, the parent or other individual who qualifies to make the election can check a box on Form 4547 to elect a $1,000 pilot program contribution for the child’s Trump Account.
Employer Program Requirements
Employers must establish a Trump account contribution program through a separate written plan specifying eligibility, contribution rules, and the procedures for employees to designate a recipient Trump account. Employers must also provide reasonable notice of the program's terms to all eligible employees and furnish each participant an annual written statement of the prior year's § 128 contributions.
The IRS noted this can be satisfied by reporting the amount in box 12 of the employee's Form W-2, Wage and Tax Statement, with code TA.
The proposed regulations confirm that employers can let employees make pretax contributions to a dependent's Trump account through an IRC § 125 cafeteria plan.
This feature is unavailable for contributions to an employee's own account, which the IRS deems an impermissible deferral of compensation. Plans offering the benefit must let employees change or revoke their salary reduction elections at least monthly, and the changes must be prospective.
The rules also clarify that self-employed individuals cannot receive § 128 contributions, though they can maintain a program for their own common law employees.
Nondiscrimination rules and pilot program safe harbor
A Trump account contribution program must satisfy nondiscrimination requirements similar to those under IRC § 129(d) for dependent care assistance programs. Contributions and benefits cannot discriminate in favor of highly compensated employees (HCEs), and a program must satisfy an eligibility test and a 55% average benefits test.
That test requires average benefits for non-HCEs to be at least 55% of the average provided to HCEs. If a plan fails, the benefit becomes taxable to HCEs, but non-HCEs can still exclude the contributions.
The guidance also provides a safe harbor tied to the IRC § 6434 Trump accounts contribution pilot program, which provides government contributions for children born from 2025 through 2028. If an employer matches these pilot contributions, the matching funds can be disregarded for the contributions and benefits test and the average benefits test — though not the eligibility test — provided the match is available on the same terms to all non-excluded employees.
Issue 4: Fake IRS Letters Target Cryptocurrency Holders
Fraudsters are mailing fake IRS letters to cryptocurrency holders in an attempt to steal personal information and digital assets. The letters direct recipients to a fraudulent website that mimics IRS.gov and instructs them to register for a nonexistent "Digital Asset Compliance Portal."
If you receive a letter claiming to be from the IRS that instructs you to enroll in a Digital Asset Compliance Portal, do not respond. The IRS did not send it. The IRS does not operate a Digital Asset Compliance Portal. This is a scam.
Victims receive what appears to be an official IRS letter claiming they must enroll in a "Digital Asset Compliance Portal" before a deadline. The letter instructs them to scan a QR code that directs them to a fraudulent website designed to look like IRS.gov. The site may ask for personal information, cryptocurrency wallet information, exchange account credentials, or other sensitive data that criminals can use to steal identities or digital assets.
Fraudsters increasingly use convincing websites, official-looking letters, and urgent deadlines to trick victims.
- Don't scan QR codes from unsolicited letters, emails, or text messages, especially those claiming to be from a government agency.
- Hang up if someone claims to be from a government agency and asks for payment or personal information. Contact the agency directly using information from its official website.
- Slow down and verify the situation; scammers create false urgency to push victims into quick decisions.
- Protect your personal and financial information, especially in response to unsolicited messages. Never share wallet recovery phrases or private keys.
- Consult a trusted family member, financial advisor, or attorney before sending money or making major financial decisions.
- Monitor financial accounts regularly and report suspicious activity immediately. Enable multifactor authentication on accounts.
- Be cautious of new online acquaintances and verify identities before engaging further.
- Report 📌 suspicious IRS-related communications immediately.
This fraud alert demonstrates the importance of public-private partnerships. Coinbase and its partners at DarkTower traced the infrastructure behind this campaign to a domain registered through a Hong Kong registrar.
The domain was registered just days before the fake letters were mailed to crypto-holders. The site was hosted in Romania on a network known for hosting phishing pages fraudulently tied to financial institutions.
The guidance was issued in response to § 324 of the SECURE 2.0 Act of 2022, which directed the IRS to simplify the plan-to-plan rollover process.
A 2013 GAO report found the rollover process was inefficient due to a lack of uniform procedures for verifying and completing rollovers. This lack of uniformity, the report noted, could "lead to confusion and frustration for participants, who are frequently burdened with completing the rollover."
This report also called the practice of mailing rollover checks to participants "archaic when communications are increasingly conducted electronically."
The 2024 report described a survey of 401(k) participants, who reported that they found the rollover process "challenging" and that nearly one-third of participants received paper checks that they then had to forward to a receiving plan.
New forms, 5-step process proposed
To address these issues, the notice introduces four sample forms that are designed to:
- Protect participants' personally identifiable information (PII) through encrypted data transfers and a unique "rollover identification number" (RIN).
- Require direct communication and coordination between the distributing and receiving plans to lessen the burden on participants.
- Use a standard set of data and common terms during the rollover process.
- Require plans to verify the accuracy of the rollover request and the legitimacy of the rollover before transferring funds.
- Require electronic communications and transfers to the greatest extent possible.
Note. This new process is not intended for IRA-to-IRA transfers, which are typically handled by the Automated Customer Account Transfer Service (ACATS).
Under the proposed procedures, if a rollover cannot be completed electronically, the distributing plan would be directed to mail a check payable to the receiving plan "for the benefit" of the participant directly to the receiving plan, not to the participant. Using the sample forms and the proposed procedures is currently optional, and the IRS has not yet provided any safe harbors based on their use.
Mandatory e-transfers, other changes under review
The IRS is considering making some of these procedures mandatory in the future and is considering additional guidance. Additional guidance under consideration includes:
- Amending regulations under IRC § 1.401(a)(31) to remove the provision allowing paper checks to be sent to participants.
- Requiring all rollovers to be completed via electronic transfer or by a check mailed directly to the receiving plan.
- Providing new safe harbors for plans that use the standardized forms.
- Defining certain burdensome requests, such as requiring a Medallion Signature Guarantee, as impermissible procedures that substantially impair a participant's ability to elect a direct rollover.
The notice acknowledges that any mandates would require an adequate implementation period for plan administrators to update their systems.
Issue 6: GAO Finds Paper Refund Wait Times Almost Tripled in 2026
IRS processed about 98% of the 177 million tax returns received during the 2026 tax filing season. But it entered the 2026 season with fewer staff and new tax changes.
Our ongoing work looks at IRS's performance during the 2026 filing season. So far, we've found:
- Paper returns took longer to process because IRS didn't have staff to update some IT systems
- As paper checks were being phased out, IRS delayed millions of refunds for taxpayers who didn't provide direct deposit information
- More taxpayers used self-service options and fewer used in-person IRS services
- Fewer customer service staff contributed to fewer calls being answered and longer wait times
Business payroll tax returns took even longer, averaging 72 days against a 32-day policy.
The GAO tied the delays to unavailable systems and reduced staffing. The IRS' individual paper processing system could not handle tax year 2025 returns for the first six weeks of the season, and its scanning system for business paper returns was unavailable the entire season. Officials said the systems were not ready because of the recent loss of experienced IT acquisition staff.
And the Submission Processing unit, which handles returns, ended the season with 18% fewer staff than it had a year earlier, and unit officials said in April 2026 that they lacked enough staff to process returns on time.
To compensate, the IRS routed far more paper to outside scanning vendors, sending about 3.7 million business paper returns for scanning, a 725% increase from the prior year. The staffing losses were foreshadowed in a
March report 📌 that warned of severe risks to future operations after major workforce reductions in 2025.
Paper check refund delays
Refund totals rose even as paper checks slowed. The IRS issued $296 billion in refunds by the end of the season, up $43 billion, or 17%, from 2025, and the average refund grew 11% to $3,275. The agency tied the increases to new deductions for qualified tips and overtime pay.
Most paper check refunds were delayed by weeks under a transition to electronic payments required by a March 2025
executive order. 📌 Beginning in January 2026, the IRS notified taxpayers who did not provide direct deposit information that their refunds could be held. The agency sent about 4.2 million such notices, giving recipients 30 days to supply a bank account number before it would issue a paper check after six weeks.
As a result, the number of paper check refunds fell by more than 80% to 493,000, and the average time to issue one rose from 13 days in 2025 to 36 days in 2026. Direct deposit refunds moved far faster, with nine out of 10 issued within 21 days.
Taxpayers turn to online self-service
The IRS scaled back its live telephone target to shift resources toward its correspondence backlog. It replaced its previous 85% level of service goal with a new measure, the Assistor Service Rate, and set the goal at 70%. The agency reported a 73% rate, exceeding the lowered target but trailing the 87% level of service it posted in 2025.
Fewer callers reached the agency overall. The IRS received 24.7 million calls, down 11% from 2025, and automation answered a larger share of them. Even so, the average wait to reach a representative more than doubled, from three minutes to eight minutes.
Taxpayers increasingly turned to self-service instead. Logins to individual online accounts reached about 155 million, the most in six years, and visits to the "Where's My Refund?" tool rose 9% to 346 million.
In-person service declines
In-person help also contracted. The IRS served 626,000 taxpayers at its Taxpayer Assistance Centers, a 16% drop from the 2025 filing season. Officials attributed the decline to fewer open locations and lower demand for face-to-face service.
Staffing remained the central constraint. The number of fully staffed centers fell to 42 from 102 a year earlier, while the number of unstaffed or temporarily closed offices nearly doubled, rising to 35 from 18 in 2024. The IRS permanently closed 10 centers after the 2025 season and, according to the GAO, is awaiting Treasury approval of hiring plans that could reopen some sites.
Issue 7: IRS Issues Final 2026 Forms W-2 with New Tip, Overtime, Trump Account Reporting
The IRS released the final 2026 Form W-2, Wage and Tax Statement, and its American Samoa, Guam, and U.S. Virgin Islands versions, with form and instruction updates for tipped occupation codes, cash tips reported to employers, qualified overtime compensation, and Trump account contributions.
New Box 12, Box 14b reporting
A new Box 14b, "Treasury Tipped Occupation Code(s)," appears on Form W-2 and the territory versions. Employers use the box to report up to two Treasury Tipped Occupation Codes for an employee's tipped occupation or occupations. Employees use those codes, together with cash tips reported under Box 12 code TP, to determine the qualified tip deduction on Schedule 1-A (Form 1040).
The 2026 employee instructions list three relevant Box 12 codes: TA for employer contributions under a § 128 Trump account contribution program paid to a Trump account of an employee or dependent, TP for cash tips reported to the employer, and TT for qualified overtime compensation. Employees use the TP and TT amounts to determine the corresponding deductions.
If occupation code 000 is entered in Box 14b and no other code is included, the cash tips reported in Box 12 with code TP are not qualified tips and should not be used for the qualified tip deduction.
2026 limits, filing requirements
The instructions also list 2026 retirement plan limits, stating that elective deferrals coded D, E, F, and S and designated Roth contributions coded AA, BB, and EE are generally limited to a total of $24,500 under all plans, with a $17,000 SIMPLE plan limit and a $27,500 limit for IRC § 403(b) plans for employees who qualify for the 15-year rule. Code G deferrals are limited to $24,500, and code H deferrals are limited to $7,000.
For Form W-2, employers must furnish Copies B, C, and 2 to employees by February 1, 2027, and file Copy A with the Social Security Administration by the same date. Employers filing 10 or more information returns in the aggregate must file electronically. The IRS also cautions employers not to file Copy A versions downloaded from the agency's website because those copies are not scannable.
Employers may need to update payroll systems and coordinate with vendors to capture the new tip, overtime, and Trump account reporting items. Payroll teams should consult the 2026 General Instructions for Forms W-2 and W-3 and the IRS website for additional guidance.
Issue 8: IRS Proposes to Ease Charitable Deduction Reporting for Some Trusts
This document contains proposed regulations that would amend existing regulations that require certain trusts to report all charitable contributions and amounts permanently set aside for a charitable purpose on Form 1041-A, U.S. Information Return Trust Accumulation of Charitable Amounts.
The proposed regulations would remove the reporting requirement for these trusts with respect to taxable years in which the trust's only claimed charitable contribution deduction results from charitable contributions made by a passthrough entity in which the trust owns an interest.
The proposed regulations would also modify the existing regulations to clarify that split-interest trusts satisfy their filing obligations by filing Form 5227, Split-Interest Trust Information Return, rather than Form 1041-A.
The proposed regulations would affect certain trusts that are required to report all charitable contributions and amounts permanently set aside for a charitable purpose.
Under IRC § 6034, certain trusts that claim a charitable deduction under IRC § 642(c) are required to file Form 1041-A, U.S. Information Return Trust Accumulation of Charitable Amounts. This requirement was enacted over concerns that deductions were being claimed for income accumulated in a trust that might not be paid to charity for an extended period.
This filing requirement also applies to trusts that hold an interest in a partnership or an S corporation. When the pass-through entity makes a charitable contribution, the trust takes into account its distributive share of the deduction under § 642(c).
Proposal provides reporting exception, clarification
The proposed rules provide an administrative exception to reporting for trusts whose § 642(c) deductions consist only of the trust's allocable share made by a pass-through entity in which the trust holds an interest. The IRS explains that these trusts "do not fall within the purpose of the information reporting requirement of § 6034(b)."
The rules also would amend Reg. § 1.6034-1(b) to add an exception for trusts whose only § 642(c) deduction for a tax year is attributable to contributions passed through from an entity under IRC § 702 or IRC § 1366.
The IRS also intends to align the rules for split-interest trusts with current IRS forms and practice. The proposal would amend Reg. § 1.6034-1(a) to codify that split-interest trusts must satisfy their reporting obligations by filing Form 5227 (or a successor form), not Form 1041-A.
Issue 9: TIGTA Releases Fiscal Year 2026 Statutory Review of Levies
When taxpayers do not pay delinquent taxes, the IRS has authority to work directly with financial institutions and other third parties to seize taxpayers’ assets. This action is commonly referred to as a levy.
§ 6330 requires the IRS to notify taxpayers at least 30 calendar days before the first issuance of a levy on a particular tax period. It also allows taxpayers the opportunity to request a CDP levy hearing before the first levy on a delinquent account. If Campus Collection Automated Collection System (ACS) employees unlawfully levy during the CDP hearing, taxpayers can experience hardship, and the IRS may undermine taxpayers’ trust in a fair tax administration system
The Treasury Inspector General for Tax Administration (TIGTA) has released its fiscal year 2026 statutory review of levies. (
Audit Report No. 2026-300-035, 📌 7/27/2026)
In April 2025, the Campus Collection ACS resumed levy issuance following a three-year pause that began in March 2020 due to the pandemic (there were intermittent periods of issuance between January 2021 and January 2022).
ACS staffing was reduced by 1,704 (42 percent) employees in Calendar Year 2025 due to the IRS workforce reduction efforts. Despite these losses, ACS management stated that there were enough resources available to support this restart. The IRS substantially complied with legal and administrative requirements for issuing levies.
TIGTA reviewed levies issued by the Campus Collection ACS for 4,768 taxpayers during the period from April 21, 2025, through June 30, 2025. They identified 14 instances of noncompliance that resulted in violations of taxpayers’ rights, including:
- 10 taxpayers who had levies unlawfully issued while a CDP hearing was pending.
- 4 taxpayers who did not receive a new CDP notice after a new tax assessment was made.
The 10 violations of an unlawful levy were due to IRS employee errors or delays routing the CDP hearing request. For example, TIGTA identified three violations where the taxpayers submitted a timely hearing request, but sent it to the wrong address (i.e., not the address on the CDP notice).
The IRS rerouted the request to the correct location, resulting in a processing delay. In September 2022, TIGTA reported similar concerns about some levies being improperly issued while taxpayers had pending CDP hearings.
TIGTA recommended and the IRS agreed to monitor the average processing time of CDP hearing requests to determine if revised procedures were necessary. The IRS has taken corrective actions to ensure the timely processing of CDP hearing requests. For example, in September 2025, the IRS updated its processing time frames and in January 2026, the IRS implemented a universal inventory system. According to the IRS, this new inventory system will prevent future delays since employees will be directed to process the oldest requests first
Issue 10: Proposed Regulations Address Employer Contributions to Trump Accounts and DCAP Nondiscrimination Rules
Treasury and the Internal Revenue Service has issued
proposed regulations 📌 on eligible investments for Trump Accounts, a new type of traditional IRA under the Working Families Tax Cuts.
Funds in a Trump Account may only be invested in eligible investments during the growth period, which begins when the account beneficiary’s initial Trump Account is established and ends on Dec. 31 of the calendar year in which the account beneficiary turns age 17. After the growth period, the eligible investment restrictions no longer apply.
For Trump Accounts, an eligible investment generally is a mutual fund or exchange traded fund that tracks an equity index of primarily U.S. companies, such as the S&P 500 index, does not use leverage, and has annual fees and expenses of no more than 0.1 percent of the balance of the investment in the fund.
If an account beneficiary does not select an eligible investment offered by the trustee, funds in a Trump Account automatically will be invested during the growth period in an eligible investment selected by the trustee.
The proposed regulations provide rules for determining whether an investment is an eligible investment and procedures for a trustee to ensure that funds are invested in an eligible investment. These regulations generally would apply to tax years beginning on or after Jan. 1, 2026.
What are Trump Accounts?
TAs are a type of individual retirement account that may be established for eligible minors; employers may contribute to the TAs of eligible employees or their dependents through a TACP meeting specified requirements.
Employer contributions (including cafeteria plan salary reduction contributions, which are restricted to employees with eligible minors) of up to $2,500 in 2026 and 2027 (adjusted for inflation after 2027) are excludable from an employee's income if made through a TACP.
- The notice sets forth the requirements for a written plan
- Notification to employees
- Report on Form W-2 Box 12 with Code TA
- Trustees Information
- Cafeteria Plan information
- Guidance on contributions and benefits
- Guidance on Corrections
- Nondiscrimination Rules
- Eligibility
Issue 11: IRS Proposes Rules on Eligible Investments for Trump Accounts
Treasury and the Internal Revenue Service have issued
proposed regulations 📌 on eligible investments for Trump Accounts, a new type of traditional IRA under the Working Families Tax Cuts.
“These proposed regulations will provide clarity for trustees and beneficiaries of Trump Accounts, thus encouraging eligible participants to invest in low-fee mutual funds and ETFs that will grow on a tax-deferred basis potentially over their entire lives,” said IRS Chief Executive Officer Frank J. Bisignano. “Funds deposited in Trump Accounts enable American children to start investing now and enjoy years of compound earnings for their future college, retirement and other needs.”
Eligible Investments for Trump Accounts
Funds in a Trump Account may only be invested in eligible investments during the growth period, which begins when the account beneficiary’s initial Trump Account is established and ends on Dec. 31 of the calendar year in which the account beneficiary turns age 17. After the growth period, the eligible investment restrictions no longer apply.
For Trump Accounts, an eligible investment generally is a mutual fund or exchange traded fund that tracks an equity index of primarily U.S. companies, such as the S&P 500 index, does not use leverage, and has annual fees and expenses of no more than 0.1 percent of the balance of the investment in the fund.
If an account beneficiary does not select an eligible investment offered by the trustee, funds in a Trump Account automatically will be invested during the growth period in an eligible investment selected by the trustee.
The proposed regulations provide rules for determining whether an investment is an eligible investment and procedures for a trustee to ensure that funds are invested in an eligible investment. These regulations generally would apply to tax years beginning on or after Jan. 1, 2026.
Sign up for a Trump Account and the pilot program
Parents, guardians, and other authorized individuals, can use
IRS Individual Online Account 📌 to complete
Form 4547, Trump Account Election(s) 📌 to open a Trump Account for a child with a Social Security number if the election is made before the calendar year in which the child turns age 18. If that child is a U.S. citizen born in 2025 through 2028, the parent or other individual who qualifies to make the election can check a box on Form 4547 to elect a $1,000 pilot program contribution for the child’s Trump Account.
allowing for total-market, large-cap, or small-cap indexes that meet the other requirements.
Trustee procedures and safe harbors established
The proposed regulations outline several responsibilities and safe harbors for the trustees of Trump Accounts. Trustees must establish a default eligible investment for each account. If a beneficiary or representative does not select a specific fund, trustees will place all contributions and other investment amounts in the default option.
The proposed regulations also require trustees to monitor the funds they offer to ensure the funds continue to qualify as eligible investments. The guidance provides a safe harbor and treats trustees as properly monitoring funds if they review the funds at least once every 12 months, relying on the fund's prospectus and other public documents.
If a fund ceases to be an eligible investment, the trustee has 30 days from the time the fund ceases to be an eligible investment to sell or dispose of the shares and reinvest the proceeds into a qualifying investment. The proposed regulations provide a similar 30-day correction period for administrative errors that result in investments in ineligible assets.
Issue 12: IRS Revises Business Interest Expense FAQs, Drops COVID-era Rules
The IRS has released updated
frequently asked questions 📌 (FAQs) on the business interest expense limitation under § 163(j), superseding 2025 guidance, removing obsolete pandemic era rules, and adding details from recent legislation. (Fact Sheet 2026-14, 8/19/2026)
Issue 13: Taxpayer Rights Include Being Able to Appeal an IRS decision in an Independent Forum
Taxpayers have the right to appeal an IRS decision in an independent forum. What this means is they are entitled to a fair and impartial administrative appeal of most decisions made by the IRS, including many penalties. This is another one of the ten rights that make up the
Taxpayer Bill of Rights. 📌 Understanding these rights helps taxpayers if they need to work with IRS on a personal tax matter.
Important facts about this right:
- The IRS Office of Appeals must be independent and separate from the IRS office that initially reviewed the case. Generally, Appeals will not discuss a case with the IRS to the extent that those communications appear to compromise the independence of Appeals.
- When taxpayers don't agree with an IRS decision, they can refer to Publication 5, Your Appeal Rights and How To Prepare a Protest If You Don't Agree, 📌 for details on how to appeal.
- Taxpayers who receive a statutory notice of deficiency, which is a notice proposing additional tax, may file a timely petition with United States Tax Court to dispute the proposed adjustment before they must pay the tax.
Taxpayers have the right to receive a written response regarding a decision from the Office of Appeals.
- Generally, taxpayers may file a refund suit in a United States District Court or the United States Court of Federal Claims if:
- They have fully paid the tax and the IRS has denied their tax refund claim.
- No action is taken on the refund claim within six months.
- It's been less than two years since the IRS mailed them a notice denying the refund.
Issue 14: Practitioner Alert — OPR Warns Practitioners About Risks of Unreasonable Delays
Expeditious resolution of federal tax matters is not only in the best interest of the IRS and taxpayers, but also a professional obligation for those who represent taxpayers as clients before the IRS. Tax practitioners often serve as the bridge between taxpayers and the agency: facilitating communications, helping to ensure compliance with the internal revenue laws, and advocating for their clients. However, failure to act promptly or engaging in practices that lead to unnecessary hold-ups can be detrimental to both the taxpayers’ interests and the integrity and effective administration of the tax system. Uncalled-for delays may trigger investigation and potential disciplinary or other action, which may impact a practitioner’s ability to represent clients in the future.
All tax professionals eligible by virtue of their credentials to advance their clients’ interests in IRS matters are required to comply with Circular 230, the set of regulations governing practice before the IRS, which are codified in Title 31 of the Code of Federal Regulations. The professionals covered are attorneys, certified public accountants (CPAs), enrolled agents, enrolled retirement plan agents, and enrolled actuaries (“practitioners,” defined in Circular 230 section 10.2(a)(5) [2]); appraisers; and tax return preparers granted limited practice privileges under the IRS
Annual Filing Season Program 📌 (AFSP). With respect to these individuals, the Office of Professional Responsibility (OPR) oversees adherence with and enforces the regulations’ rules, to uphold ethical conduct by those who practice.
Standards and Obligations
Section 10.23 of Circular 230 specifically addresses the “Prompt Disposition of Pending Matters,” emphasizing that practitioners must not unreasonably delay the progress of any IRS conducted matter. Including in their handling of requests for documents and other records or information (in whatever format it’s stored and available or reproducible).
| | § 7602 of the IRC, Examination of Books and Witnesses, grants the IRS broad information gathering authority. As stated in subsection (a), the “purpose” of exercising the authority is for “ascertaining the correctness of any return, making a return where none has been made, determining the liability of any person for any internal revenue tax or the liability . . . of any transferee or fiduciary of . . . [the] person . . . , or collecting any such liability[.]”
To those ends, the Service can “examine any books, papers, records, or other data which may be relevant or material” and summon taxpayers and third-party record keepers to produce the items, as well as to testify under oath. |
Section 10.20, “Information to be Furnished,” in paragraph (a) mandates that, upon receiving a proper and lawful request from an IRS employee, practitioners must promptly submit the requested records or information. If a practitioner withholds materials as privileged, they must do so in “good faith,” based on “reasonable grounds,” and must claim the privilege(s) in their reply to the IRS.
IRS employees rely on internal procedures outlined in the Internal Revenue Manual (IRM) for dealing with non-responsive, uncooperative, or dilatory representatives. Among these procedures are establishing clear expectations and deadlines, escalating concerns to management, and using enforcement actions, such as preparing substitutes for return (SFRs) or issuing and enforcing summonses.
Resorting to "Bypass"
If delays persist, compliance and civil investigatory employees can initiate a bypass, and once it’s approved, contact the taxpayer directly, instead of interacting solely through their representative.
Under § 7521(c) and related procedural regulations (see 26 CFR 601.506(b)), if a practitioner is deemed responsible for unreasonable delay or hindrance in an examination, collection case, or investigation, IRS employees, with supervisory approval, may notify the taxpayer directly of the issue. Bypass must be supported by adequate case-file documentation.
The bypass process allows the IRS to move forward with the open inventory item by communicating straight away with the taxpayer, including obtaining previously requested information, when the representative fails to supply the (non-privileged) information after repeated requests.
It is important to note that a bypass does not automatically disqualify the practitioner from continuing to represent the taxpayer or other clients. Only the OPR has the authority to restrict, as a disciplinary measure, a practitioner from IRS representation. And the sanction (if pursued) would ordinarily arise from a referral to our office of suspected violations of § 10.23, § 10.20(a), both, or when combined with other sections that could be implicated (like 10.22 (failure to exercise due diligence). And further, only at the end of an investigation and its findings and a decision on the appropriate course of action.
Key Takeaways
Proactive and thorough attention to and completion of IRS requests, coupled with detailed documentation and organized recordkeeping, are integral to safeguarding your entitlement to continued IRS practice and your clients’ best interests.
- Take action sooner rather than later: Try to always answer the IRS without unnecessary delay. Well-timed exchanges are critical to maintaining trust and rapport.
- Buttress your privilege claims: If you withhold anything as privileged, ensure you have a valid, legally sound basis (see more below) and tell the IRS what it is.
- Review your firm’s or office’s in-house procedures: Regularly assess your processes so they align with Circular 230 requirements. Consider implementing internal policies for tracking deadlines, handling privileged material, training staff on their file maintenance responsibilities, and so on.
- Keep a thorough historical compilation, a chronology of the chain of events: Retain sufficiently detailed and well-organized paper and electronic records of all:
- Correspondence and other communications from and to the IRS;
- Meetings, conferences, and telephone calls with staff from the applicable business unit;
- And instances (if any) where you withheld or temporarily postponed transmittal of information.
- Collaborate with clients: Update your clients about the status of their cases, especially when the IRS initiates an audit or enforcement action or a new stage in an ongoing one. Transparency helps stabilize the shared relationship and can mitigate client concerns.
Privileges
Viable ones that can be claimed are typically:
- The attorney-client privilege, which essentially protects confidential communications between a client and their attorney (or a non-lawyer assistant/subordinate) relating to the client’s request for legal advice.
- The attorney work product doctrine, protecting work products prepared by an attorney for a client in anticipation of litigation.
- The Fifth Amendment privilege against self-incrimination, which “guarantees each individual the right to remain silent without penalty and, more specifically, the right not to be compelled to produce testimonial or communicative evidence that may be incriminating.”
- It can be invoked when the person asked by a governmental authority for information faces “real” (not remote or speculative) “substantial hazards” of incriminating themselves if they were to provide the information requested.
- The practitioner privilege in § 7525, Confidentiality privileges relating to taxpayer communications (added by RRA ’98), which is intended to shield from disclosure taxpayers’ communications principally with CPAs and enrolled agents.
A taxpayer or a representative on behalf of the taxpayer can assert the privilege in “any noncriminal tax matter before” the IRS, and the section’s general rule is that:
With respect to tax advice, the same common law protections of confidentiality which apply to a communication between a taxpayer and an attorney shall also apply to a communication between a taxpayer and any federally authorized tax practitioner to the extent the communication would be considered a privileged communication if it were between a taxpayer and an attorney.
The section has two definitions used in applying the rule. First, a “federally authorized tax practitioner” is denied as “any individual who is authorized under Federal law to practice before the . . . [IRS] if such practice is subject to Federal regulation under § 330 of title 31, United States Code” – in other words, someone who is regulated under Circular 230. Second, “tax advice” means “advice given by an individual with respect to a matter which is within the scope of the individual’s authority to practice described” in the first definition.
Violations
This article briefly describes the potential consequences for confirmed willful violations of §§ 10.23 or 10.20(a). Readers interested in further details can find them elsewhere –notably, in the circular, at §§ 10.50, “Sanctions,” 10.52, “Violations subject to sanction,” and in Subpart D, Rules Applicable to Disciplinary Proceedings.
In short, depending on the number of violations and the facts and circumstances surrounding them, outcomes are generally a letter of reprimand, which is private, and prescribed in the practice regulations as an alternative to the other option of a disciplinary sanction. Sanctions that can be imposed are censure (which is public); suspension from practice; disbarment; monetary penalties, which apply at the individual practitioner level as well as to a firm or other entity under certain conditions; and disqualification of appraisers.
Conclusion
As with other occupational fields, in the tax-practice profession, certain events or occurrences – such as unforeseeable delays, extension requests, priorities that later must be reprioritized, and underestimations of how time-consuming a task will be -are inescapable.
A competent and dedicated practitioner can successfully manage them. If not already clear, the central point of this article is that these everyday realities are not the cause of the problem and its inherent risks of harm to taxpayers, federal tax administration, and practitioners (to their reputations, livelihoods, and good standing with the IRS). Rather, the problem lies in an indifferent or dismissive attitude, culminating in conduct that demonstrates a knowing disregard of Circular 230’s obligations. Thereby exposing the practitioner to liability for breaching those obligations. We urge practitioners not to head down that path.
Issue 15: Treasury, IRS Issue Guidance on the Permanent Expansion of Paid Family and Medical Leave under the Working Families Tax Cuts
Treasury and the Internal Revenue Service (IRS) issued
Notice 2026-28, 📌 providing guidance on the employer credit for paid family and medical leave (PFML) under the Working Families Tax Cuts (WFTC). The WFTC makes permanent and expands eligibility and coverage for employers offering PFML benefits to employees.
“The Working Families Tax Cuts permanently expands the federal Paid Family and Medical Leave Tax Credit, giving businesses, especially small businesses, greater incentives to provide paid leave so workers can care for a newborn or other family member or recover from a serious illness without sacrificing their financial security. Today's guidance provides employers with the clarity they need to claim the enhanced credit, supporting American workers, families, and businesses.”
“The permanent expansion of the credit encourages businesses to provide paid family and medical leave,” said IRS Chief Executive Officer Frank J. Bisignano. “The changes enacted by the Working Families Tax Cuts will make more employers eligible for the credit and give them more ways to offer this benefit to their workers.”
Permanent Expansion of the Paid Family and Medical Leave Tax Credit
The Working Families Tax Cuts permanently expands the employer tax credit for paid family and medical leave, providing businesses, particularly small businesses, with greater incentives to offer up to 12 weeks of paid leave. Employees may use the leave to recover from a serious health condition or to care for certain family members with serious health conditions.
The WFTC also makes several key improvements to the credit, including:
- Expanded Eligibility: Employers can claim credit for employees with six months of service and for part-time employees customarily working 20 hours or more per week.
- Expanded Coverage: Employers can claim the credit for insurance premiums to provide leave, or wages paid during leave.
- State and Local Mandates: Employers can count leave provided under state or local mandates toward the eligibility for this federal tax credit, but not toward the credit calculation.
Beginning in 2026, employers can claim the credit for premiums paid for PFML insurance policies, in addition to wages paid during PFML leave. To help employers apply the new premium-based method,
Notice 2026-28 📌 addresses how the premium-based method compares to the wage-based method, how to allocate the qualifying premiums, and how to elect between the premium method and the wage method. Forthcoming proposed regulations will provide broader guidance to address the statute comprehensively and provide certainty to taxpayers.
Beginning in 2026, more employers providing paid family and medical leave that meets certain requirements can take advantage of a general business tax credit ranging from 12.5% to 25% of wages paid to qualifying employees for up to 12 weeks of family and medical leave per taxable year.
Information on Forthcoming Guidance
Treasury and the IRS intend to issue proposed regulations consistent with this guidance. Comments are requested on all aspects of the notice and any other issues regarding implementation of the amendments to section 45S by the WFTC that should be addressed in the forthcoming proposed regulations. Complete instructions on submitting comments are included in the notice.
Issue 16: IRS Updates FAQs on Qualified Overtime Deduction
Issue 17: FinCEN Permanently Ends Beneficial Ownership Reporting Requirements for Millions of Small Business Owners; Will Delete Information Previously Reported by U.S. Persons
The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) is issuing a final rule that permanently removes the requirement for U.S. companies and U.S. persons to report beneficial ownership information to FinCEN under the Corporate Transparency Act.
The final rule is effective on its publication in the Federal Register.
FinCEN also announced that it will delete previously reported information by U.S. persons—now exempt from the reporting requirements—from the beneficial ownership information database. Under the final rule, foreign entities that are reporting companies will still be required to report beneficial ownership information for foreign individuals.
In addition to the final rule, FinCEN has issued
Frequently Asked Questions, 📌 and will be updating guidance on FinCEN.gov to reflect the final rule.
Issue 18: SEC Proposes New Regulation Crypto Assets
The Securities and Exchange Commission has announced that it proposed new rules, titled “Regulation Crypto Assets,” that would create a clear and fit-for-purpose framework for certain investment contracts involving crypto assets. This proposal follows the Commission’s March 2026 interpretation clarifying how the federal securities laws apply to certain crypto assets and transactions involving crypto assets.
Together, these efforts introduce a comprehensive, tailored securities offering regime intended to address long-standing barriers to responsible capital formation and innovation within domestic crypto asset markets, while preserving the investor protections at the core of federal securities laws.
The proposed rules include two exemptions from the registration requirements of the Securities Act of 1933 specifically tailored to certain investment contracts involving crypto assets. The first is a one-time exemption that would permit offerings of up to $5 million during a four-year period. The second exemption would permit offerings of up to $75 million during each 12-month period. Under both exemptions, issuers would be required to make certain principles-based narrative disclosures available to their investors. In addition, issuers under the second exemption would be required to provide financial statements and be subject to ongoing reporting requirements.
The proposed rules also include a conditional safe harbor from the term “investment contract” in the definitions of “security” in the Securities Act of 1933 and the Securities Exchange Act of 1934. If the conditions of that proposed safe harbor are satisfied, then a crypto asset would be deemed not to be subject to an investment contract for purposes of those definitions of “security.” In addition, the proposed rules would preempt state securities law registration and qualification requirements with respect to offers and sales of securities issued pursuant to an exemption in Regulation Crypto Assets, as well as certain secondary market transactions.
Issue 19: CACFP Payment and Reimbursement Rates for the Period July 1, 2026, Through June 30, 2027
This notice announces the annual adjustments to the national average payment rates for meals and snacks served in child care centers, outside-school-hours care centers, at-risk afterschool care centers, and adult day care centers; the food service payment rates for meals and snacks served in day care homes; and the administrative reimbursement rates for sponsoring organizations of day care homes, to reflect changes in the Consumer Price Index. Further adjustments are made to these rates to reflect the higher costs of providing meals in Alaska, Guam, Hawaii, Puerto Rico, and Virgin Islands. The adjustments contained in this notice are made on an annual basis each July, as required by the laws and regulations governing the Child and Adult Care Food Program.
Dates
These rates are in effect from July 1, 2026, through June 30, 2027.
Background
Pursuant to §§ 4, 11, and 17 of the Richard B. Russell National School Lunch Act (
42 USC 1753, 📌
1759a, 📌 and
1766 📌 ), section 4 of the Child Nutrition Act of 1966 (
42 USC 1773 📌 ) and
7 CFR 226.4, 📌
226.12, 📌 and
226.13 📌 of the program regulations, notice is hereby given of the new payment rates for institutions participating in the Child and Adult Care Food Program. As provided for under the law, all rates in the Child and Adult Care Food Program must be revised annually, on July 1, to reflect changes in the Consumer Price Index (CPI), published by the Bureau of Labor Statistics of the United States Department of Labor, for the most recent 12-month period. These rates are in effect during the period of July 1, 2026, through June 30, 2027.
Adjusted Payments
The following national average payment factors and food service payment rates for meals and snacks are in effect from July 1, 2026, through June 30, 2027. All amounts are expressed in dollars or fractions thereof. Due to a higher cost of living, the reimbursements for Alaska, Guam, Hawaii, Puerto Rico, and Virgin Islands are higher than those for all other states. The District of Columbia uses the figures specified for the contiguous states. These rates do not include the value of USDA Foods or cash-in-lieu of USDA Foods, which institutions receive as additional assistance for each lunch or supper served to participants under the program. A notice announcing the value of USDA Foods and cash-in-lieu of USDA Foods is published separately in the Federal Register.
Adjustments to the national average payment rates for all meals served under the Child and Adult Care Food Program are rounded down to the nearest whole cent.
National Average Payment Rates for Centers
The changes in the national average payment rates for centers reflect a 3.54 percent increase during the 12-month period from May 2025 to May 2026 (from 381.228 in May 2025, as previously published in the Federal Register, to 394.728 in May 2026) in the Food Away from Home series of the Consumer Price Index for All Urban Consumers.
Payments for breakfasts served are: Contiguous States -paid rate-42 cents (2 cent increase from the 2025-2026 rate), reduced price rate-2 dollar and 24 cents (8 cents increase), free rate-2 dollars and 54 cents (8 cents increase); Alaska -paid rate-64 cents (2 cents increase), reduced price rate-3 dollars and 79 cents (14 cents increase), free rate-4 dollars and 9 cents (14 cents increase); Guam, Hawaii, Puerto Rico, and Virgin Islands -paid rate-52 cents (1 cent increase), reduced price rate -2 dollars and 99 cents (11 cents increase), free rate-3 dollars and 29 cents (11 cents increase).
Payments for lunch or supper served are: Contiguous States -paid rate-45 cents (1 cents increase), reduced price rate-4 dollars and 36 cents (16 cents increase), free rate-4 dollars and 76 cents (16 cents increase); Alaska -paid rate-74 cents (3 cents increase), reduced price rate-7 dollars and 32 cents (27 cents increase), free rate-7 dollars and 72 cents (27 cents increase); Guam, Hawaii, Puerto Rico, and Virgin Islands -paid rate-59 cents (2 cents increase), reduced price rate-5 dollars and 79 cents (21 cents increase), free rate-6 dollars and 19 cents (21 cents increase).
Payments for snack served are: Contiguous States -paid rate-12 cents (1 cent increase), reduced price rate-65 cents (2 cents increase), free rate-1 dollar and 30 cents (4 cents increase); Alaska -paid rate-19 cents (1 cents increase), reduced price rate-1 dollar and 6 cents (4 cent increase), free rate-2 dollars and 12 cents (8 cents increase); Guam, Hawaii, Puerto Rico, and Virgin Islands -paid rate-15 cents (no change), reduced price rate-85 cents (3 cents increase), free rate-1 dollar and 70 cents (6 cents increase).
Food Service Payment Rates for Day Care Homes
The changes in the food service payment rates for day care homes reflect a 2.74 percent increase during the 12-month period from May 2025 to May 2026 (from 312.491 in May 2025, as previously published in the Federal Register, to 321.047 in May 2026) in the Food At Home series of the Consumer Price Index for All Urban Consumers.
Payments for breakfast served are: Contiguous States -Tier I-1 dollar and 74 cents (4 cent increase from the 2025-2026 rate) and Tier II-62 cents (1 cent increase); Alaska -Tier I-2 dollars and 79 cents (7 cents increase) and Tier II-98 cents (3 cent increase); Guam, Hawaii, Puerto Rico, and Virgin Islands -Tier I-2 dollar and 25 cents (6 cents increase) and Tier II-79 cents (2 cent increase).
Payments for lunch and supper served are: Contiguous States -Tier I-3 dollars and 31 cents (9 cents increase) and Tier II-1 dollar and 99 cents (5 cents increase); Alaska -Tier I-5 dollars and 36 cents (14 cents increase) and Tier II-3 dollars and 23 cents (8 cents increase); Guam, Hawaii, Puerto Rico, and Virgin Islands -Tier I-4 dollars and 30 cents (12 cents increase) and Tier II-2 dollar and 59 cents (7 cents increase).
Payments for snack served are: Contiguous States -Tier I-98 cents (2 cent increase) and Tier II-27 cents (1 cent increase); Alaska -Tier I-1 dollar and 59 cents (4 cents increase) and Tier II-44 cents (1 cent increase); Guam, Hawaii, Puerto Rico, and Virgin Islands -Tier I-1 dollar and 28 cents (4 cents increase) and Tier II-35 cents (1 cent increase).
Administrative Reimbursement Rates for Sponsoring Organizations of Day Care Homes
The changes in the administrative reimbursement rates for sponsoring organizations of day care homes reflect a 4.25 percent increase during the 12-month period, May 2025 to May 2026 (from 321.465 in May 2025, as previously published in the Federal Register, to in 335.123 May 2026) in the series for All Items of the Consumer Price Index for All Urban Consumers.
Monthly administrative payments to sponsors for each sponsored day care home are: Contiguous States -Initial 50 homes-157 dollars (7 dollar increase from 2025-2026 annual level), next 150 homes-119 dollars (4 dollar increase), next 800 homes-93 dollars (4 dollar increase), each additional home-82 dollars (3 dollar increase); Alaska -Initial 50 homes-254 dollars (10 dollar increase), next 150 homes-193 dollars (7 dollar increase), next 800 homes-151 dollars (6 dollar increase), each additional home-133 dollars (5 dollar increase); Guam, Hawaii, Puerto Rico, and Virgin Islands -Initial 50 homes-204 dollars (9 dollar increase), next 150 homes-155 dollars (6 dollar increase), next 800 homes-121 dollars (5 dollar increase), each additional home-107 dollars (5 dollar increase).
Payment Chart
The
payment chart (png) 📌 illustrates the national average payment factors and food service payment rates for meals and snacks in effect from July 1, 2026, through June 30, 2027.
CHILD AND ADULT CARE FOOD PROGRAM (CACFP)
Per Meal Rates in Whole or Fractions of U.S. Dollars
Effective from: July 1, 2026 to June 30, 2027 |
|---|
| CENTERS | BREAKFAST | LUNCH AND SUPPER | SUPPLEMENT |
|---|
| CONTIGUOUS STATES | PAID | 0.42 | 0.45 | 0.12 |
| REDUCED PRICE | 2.24 | 4.36 | 0.65 |
| FREE | 2.54 | 4.76 | 1.30 |
| ALASKA | PAID | 0.64 | 0.74 | 0.19 |
| REDUCED PRICE | 3.79 | 7.32 | 1.06 |
| FREE | 4.09 | 7.72 | 2.12 |
| GUAM, HAWAII, PUERTO RICO, and VIRGIN ISLANDS | PAID | 0.52 | 0.59 | 0.15 |
| REDUCED PRICE | 2.99 | 5.79 | 0.85 |
| FREE | 3.29 | 6.19 | 1.70 |
| DAY CARE HOMES | BREAKFAST | LUNCH AND SUPPER | SUPPLEMENT |
|---|
| | TIER I | TIER II | TIER I | TIER II | TIER I | TIER II |
|---|
| CONTIGUOUS STATES | 1.74 | 0.62 | 3.31 | 1.99 | 0.98 | 0.27 |
| ALASKA | 2.79 | 0.98 | 5.36 | 3.23 | 1.59 | 0.44 |
| GUAM, HAWAII, PUERTO RICO, and VIRGIN ISLANDS | 2.25 | 0.79 | 4.30 | 2.59 | 1.28 | 0.35 |
ADMINISTRATIVE REIMBURSEMENT RATES FOR SPONSORING ORGANIZATIONS OF DAY CARE HOMES
PER HOME/PER MONTH RATES IN U.S. DOLLARS | Initial 50 | Next 150 | Next 800 | Each Additional |
|---|
| CONTIGUOUS STATES | 157 | 119 | 93 | 82 |
| ALASKA | 254 | 193 | 151 | 133 |
| GUAM, HAWAII, PUERTO RICO, and VIRGIN ISLANDS | 204 | 155 | 121 | 107 |
1These rates do not include the value of USDA Foods or cash-in-lieu of USDA Foods, which institutions receive as additional assistance for each CACFP lunch or supper served to participants. A notice announcing the value of USDA Foods and cash-in-lieu of USDA Foods is published separately in the Federal Register.
Issue 20: Applicable Federal Rates for September 2026, Rev. Rul. 2026- 17
REV. RUL. 2026-17 TABLE 1
Applicable Federal Rates (AFR) for September 2026
| | Period for Compounding |
|---|
| Annual | Semiannual | Quarterly | Monthly |
|---|
| Short-term |
| AFR | 4.18% | 4.14% | 4.12% | 4.10% |
| 110% AFR | 4.60% | 4.55% | 4.52% | 4.51% |
| 120% AFR | 5.03% | 4.97% | 4.94% | 4.92% |
| 130% AFR | 5.45% | 5.38% | 5.34% | 5.32% |
| Mid-term |
| AFR | 4.49% | 4.44% | 4.42% | 4.40% |
| 110% AFR | 4.94% | 4.88% | 4.85% | 4.83% |
| 120% AFR | 5.40% | 5.33% | 5.29% | 5.27% |
| 130% AFR | 5.85% | 5.77% | 5.73% | 5.70% |
| 150% AFR | 6.77% | 6.66% | 6.61% | 6.57% |
| 175% AFR | 7.92% | 7.77% | 7.70% | 7.65% |
| Long-term |
| AFR | 5.12% | 5.06% | 5.03% | 5.01% |
| 110% AFR | 5.65% | 5.57% | 5.53% | 5.51% |
| 120% AFR | 6.16% | 6.07% | 6.02% | 5.99% |
| 130% AFR | 6.69% | 6.58% | 6.53% | 6.49% |
REV. RUL. 2026-17 TABLE 2
Adjusted AFR for September 2026
| | Annual | Semiannual | Quarterly | Monthly |
|---|
| Short-term adjusted AFR | 3.16% | 3.14% | 3.13% | 3.12% |
| Mid-term adjusted AFR | 3.40% | 3.37% | 3.36% | 3.35% |
| Long-term adjusted AFR | 3.88% | 3.84% | 3.82% | 3.81% |
REV. RUL. 2026-17 TABLE 3
Rates Under Section 382 for September 2026
| Adjusted federal long-term rate for the current month | 3.88% |
| 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.) | 3.88% |
REV. RUL. 2026-17 TABLE 4
Appropriate Percentages Under Section 42(b)(1) for September 2026
Note: Under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after July 30, 2008, shall not be less than 9%.
| Appropriate percentage for the 70% present value low-income housing credit | 8.12% |
| Appropriate percentage for the 30% present value low-income housing credit | 3.48% |
REV. RUL. 2026-17 TABLE 5
Rate Under Section 7520 for September 2026
| 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 | 5.40% |
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