Tax Reform Archives | TAX CONTROVERSY 360

Tax Reform

IRS roundup: June 10 – June 21, 2026

by Kai M. Fenty and Edward L. Froelich | Jun 23, 2026 | Appellate Courts, Court Procedure Matters, IRS Appeals, IRS Guidance, Significant Court Decision, Tax Reform, Trial Courts

Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for June 10, 2026 – June 21, 2026.

June 9, 2026: A Treasury Inspector General for Tax Administration (TIGTA) report found that the IRS lost a significant number of experienced employees during the workforce reductions and voluntary departures that occurred in the first year of the second Trump administration. Approximately 40% of departing employees had more than 11 years of experience while another 45% had between one and 11 years of service, raising concerns about the loss of institutional knowledge and expertise within the agency.

The report also noted that the IRS has redirected personnel to maintain taxpayer service operations, including hiring approximately 2,000 customer service representatives and tax examiners and detailing more than 1,100 employees from other divisions to assist with return processing. TIGTA observed that many reassigned employees retained higher-grade salaries while performing lower-grade taxpayer service duties and announced a separate review examining the impact of these resource reallocations on IRS operations and enforcement activities.

June 10, 2026: The IRS issued Notice 2026-39, updating the list of qualifying energy communities for purposes of the bonus credit amounts and rates available under Internal Revenue Code (Code) §§ 45, 45Y, 48, and 48E. The notice provides updated county and census tract information for the Statistical Area and Coal Closure Categories, reflecting 2025 unemployment data, newly identified coal mine closures, and coal-fired electric generating unit retirements.

The updated designations determine whether eligible clean energy projects qualify for enhanced energy community bonus credits. The notice also provides revised appendices identifying qualifying counties, metropolitan and non-metropolitan statistical areas, and census tracts, with the updated energy community status generally effective beginning June 10, 2026.

June 13, 2026: US Department of the Treasury officials announced that forthcoming proposed regulations under Code § 987 will allow certain controlled foreign corporations to make an election to not compute foreign currency gains and losses for their qualified business units and that the election may be made on amended 2025 tax returns. The election was first outlined in Notice 2026-17 and is intended to simplify compliance with the complex § 987 foreign currency rules.

The Treasury indicated that taxpayers will be given additional time to decide whether to make the election, but the election must be made within a reasonable period rather than years later. The proposed regulations are intended to reduce compliance burdens, simplify the operation of the § 987 regime, and limit the application of certain rules to routine business transactions involving US-owned foreign corporations.

June 15, 2026: The IRS issued Revenue Ruling 2026-12, providing the applicable federal rates (AFRs) for July 2026, including short-, mid-, and long-term rates under Code § 1274; adjusted AFRs under § 1288; and rates relevant to §§ 382, 42, 7520, and 7872. The ruling sets the § 7520 rate at 5.20% and the adjusted federal long-term rate under § 382 at 3.77%.

The ruling [...]

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IRS roundup: May 29 – June 8, 2026

by Kai M. Fenty | Jun 15, 2026 | Appellate Courts, Court Procedure Matters, IRS Guidance, Significant Court Decision, Tax Reform, Trial Courts

Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for May 29, 2026 – June 8, 2026.

May 29, 2026: The US Department of the Treasury and the IRS issued additional guidance on the applicability dates of proposed regulations under Internal Revenue Code (IRC) § 892, which governs the tax exemption for certain income earned by foreign governments and sovereign wealth funds from passive US investments. The guidance responds to stakeholder comments by providing both grandfathering protection for existing investments and transitional relief before the proposed rules become final.

Under the guidance, existing foreign government interests generally would not become subject to the final regulations, and affected investors will have at least 90 days after publication of the final regulations or until the beginning of the first taxable year following publication to come into compliance. The Treasury and the IRS stated that the changes are intended to provide certainty for current investments, preserve established market practices, and support continued sovereign investment in the United States.

June 1, 2026: The Treasury and the IRS issued proposed regulations that would increase the user fee for obtaining an estate tax closing letter from $56 to $76. The agencies explained that a recent cost study determined the full cost of processing and issuing these letters exceeds the current fee and that the increase is intended to satisfy federal user-fee requirements that services provided to specific taxpayers be self-sustaining.

The proposed regulations provide that the increased fee would apply to requests received 30 days after publication of the final regulations. The Treasury and the IRS estimate that the higher fee reflects updated labor, quality review, and overhead costs associated with processing approximately 8,000 estate tax closing letter requests annually.

June 3, 2026: Following US President Donald Trump’s executive order creating a new Schedule Policy/Career employment category, the IRS and IRS Office of Chief Counsel identified several career positions that may be reclassified, including senior advisers, program managers, human resources specialists, attorney-advisers, and senior legal counsel positions. Employees placed in the new category will lose certain long-standing civil service protections and could be removed more easily than traditional career employees.

The Trump administration stated that the changes are intended to increase accountability and facilitate the removal of employees for poor performance or misconduct. Critics, including unions and former IRS officials, contend that the reclassification could undermine workforce stability, make recruitment more difficult, and increase concerns about political influence over tax administration and enforcement.

June 4, 2026: The Treasury and the IRS indicated that guidance on clean energy tax credit restrictions enacted by the One Big Beautiful Bill Act is expected in the third quarter of 2026. The guidance is expected to address the new prohibited foreign entity rules, which limit eligibility for certain clean energy credits when projects rely on financing, supplies, components, or contractual relationships involving entities connected to designated foreign countries such as China and Russia.

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IRS roundup: May 18 – May 26, 2026

by Kai M. Fenty and Edward L. Froelich | Jun 3, 2026 | Court Procedure Matters, IRS Appeals, IRS Guidance, Significant Court Decision, Tax Reform, Tax Refunds, Trial Courts

Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for May 18, 2026 – May 26, 2026.

May 19, 2026: A Treasury Inspector General for Tax Administration (TIGTA) report warned that the IRS’s efforts to transition to a “zero-paper” processing system faces significant obstacles related to funding, staffing shortages, and contractor readiness. The report noted that the IRS relied heavily on contractors for paper-processing modernization efforts, spending approximately $9 million between May 2025 and December 2025, but the contractors were not fully prepared to handle filing-season return volumes, requiring the IRS to shift additional processing work back in-house.

TIGTA further highlighted that the IRS workforce remains substantially reduced (approximately 17% smaller than in 2021) while previously authorized modernization funding under the Inflation Reduction Act of 2022 has been significantly reduced via subsequent legislative rescissions. According to TIGTA, these resource constraints could undermine the IRS’s ability to achieve its paperless processing and modernization objectives.

May 19, 2026: The US Department of the Treasury and the IRS finalized regulations (T.D. 10048) modifying the reporting requirements for certain sales or exchanges of partnership interests involving inventory items or unrealized receivables under Internal Revenue Code § 751. The regulations removed a prior rule that effectively required partnerships to provide transferor partners with information by January 31 of the following year and instead permit partnerships to furnish the information within 30 days after receiving notice of the transfer, if later than January 31.

The final regulations adopt proposed regulations issued in 2025 without substantive change and are intended to address concerns that partnerships often lack sufficient information to comply with the earlier deadline. The IRS also updated the instructions to Form 8308 to clarify the revised reporting requirements for transfers of partnership interests.

May 19, 2026: The US House of Representatives passed bipartisan legislation (H.R. 6506) expanding taxpayer protections in refund and collection disputes with the IRS by suspending the statute of limitations for refund claims during certain levy disputes and broadening the US Tax Court’s jurisdiction in those cases. The bill responds to the Supreme Court of the Unites States’ 2025 decision in Commissioner v. Zuch, which held that the Tax Court lost jurisdiction after the IRS applied a taxpayer’s refund to an outstanding liability.

Supporters of the legislation argue that the measure prevents the IRS from effectively mooting Tax Court challenges by offsetting refunds against disputed liabilities while litigation is pending. The bill, which has bipartisan support and backing from several taxpayer advocacy and practitioner groups, is intended to preserve taxpayers’ ability to obtain meaningful judicial review of disputed assessments and collections.

May 21, 2026: The IRS issued Notice 2026-32 concerning certain carrying broker-dealers (i.e., a broker-dealer that carries customer accounts and receives or holds funds or securities for those customers). Such broker-dealers may satisfy the Individual Retirement Account nonbank trustee “adequacy of net worth” requirement under Treas. Reg. § 1.408-2(e)(5)(ii) by demonstrating compliance with [...]

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IRS roundup: May 7 – May 18, 2026

by Kai M. Fenty and Edward L. Froelich | May 22, 2026 | Appellate Courts, Court Procedure Matters, IRS Guidance, Significant Court Decision, Tax Reform, Trial Courts

Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for May 7, 2026 – May 18, 2026.

May 13, 2026: The IRS announced a time-limited settlement initiative for eligible conservation easement and historic preservation easement cases, offering taxpayers an opportunity to resolve disputes on terms the agency described as more favorable than recent US Tax Court outcomes. Under the initiative, taxpayers generally must concede the charitable contribution deduction but may receive an “other deduction” approximating out-of-pocket costs, with reduced gross valuation misstatement penalties of 10% (or 20% after 90 days) instead of the 40% penalties frequently sustained in litigation.

The IRS stated that recent Tax Court decisions have, on average, allowed only about 6% of claimed deductions while often sustaining 40% penalties and emphasized that the initiative is intended to resolve a substantial backlog of easement cases. The settlement program applies only to eligible cases and includes special procedures for both Tax Equity and Fiscal Responsibility Act of 1982 and Bipartisan Budget Act of 2015 partnership proceedings.

May 15, 2026: The IRS issued Notice 2026-31, providing updated corporate bond yield curves, segment rates, and Treasury rates used for pension funding and minimum present value calculations under §§ 417, 430, and 431. The notice sets the April 2026 spot segment rates at 4.27%, 5.34%, and 6.22% and provides adjusted 24-month average segment rates applicable for May 2026 plan years.

The notice also provides the 30-year Treasury rate for April 2026 (4.91%) and the weighted average Treasury rate used for multiemployer plan funding calculations, along with the full monthly corporate bond yield curve derived from April 2026 data.

The IRS also released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums, and Chief Counsel Advice).

Recent Tax Court decisions

May 7, 2026: In Sanders Creek Owner, LLC v. Commissioner, pursuant to a stipulated Tax Court decision, the IRS disallowed a $43.8 million charitable contribution deduction claimed in connection with a conservation easement transaction that resulted in an imputed underpayment of approximately $16.2 million. The Court also sustained a 10% gross valuation misstatement penalty under § 6662(h) while declining to impose other asserted accuracy-related penalties.

May 12, 2025: In Stokey v. Commissioner, T.C. Memo. 2025-44, the Tax Court dismissed a taxpayer’s deficiency petition as untimely, holding that the taxpayer failed to establish entitlement to equitable tolling under the US Court of Appeals for the Third Circuit’s decision in Culp v. Commissioner. Although the taxpayer asserted that he did not receive the notice of deficiency until after the filing deadline because he had moved, the Court found that the IRS properly mailed the notice to the taxpayer’s last known address and that the taxpayer failed to demonstrate either diligent pursuit of his rights or extraordinary circumstances preventing timely filing.

The Court emphasized that equitable tolling applies sparingly and requires taxpayers to show both diligence and circumstances beyond their control. Even [...]

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IRS roundup: May 1 – May 11, 2026

by Kai M. Fenty | May 13, 2026 | Court Procedure Matters, IRS Guidance, Significant Court Decision, Tax Reform, Transfer Pricing Resource, Trial Courts

Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for May 1, 2026 – May 11, 2026.

May 1, 2026: The IRS Office of Chief Counsel issued Chief Counsel Advice 202618011, addressing whether a taxpayer can apply a revised cost allocation method under Treasury Regulation § 1.482-9 as a set-off in a transfer pricing context. The guidance concludes that a taxpayer may use a revised allocation key if it is more reliable in tracing costs to the benefits received by controlled affiliates, even if the original method was reasonable.

The Office of Chief Counsel explained that a more granular, two-step allocation method linking costs to specific business divisions before apportioning among entities better reflects arm’s-length pricing than a broad allocation based solely on overall revenue. Accordingly, the IRS accepted the taxpayer’s revised method as a valid set-off under § 1.482-1(g)(4), emphasizing that cost allocations must reasonably align with the economic benefits conferred.

May 4, 2026: The IRS issued Revenue Procedure 2026-22, providing indexed employer shared responsibility payment amounts under § 4980H for 2027. The guidance adjusts the statutory amounts to $3,780 under § 4980H(c) and $5,670 under § 4980H(b), reflecting the applicable premium adjustment percentage.

May 5, 2026: The IRS issued Revenue Procedure 2026-21, establishing a significant issue ruling program under the jurisdiction of the Associate Chief Counsel (Corporate) that allows taxpayers to request letter rulings on discrete legal issues within larger corporate transactions rather than requiring rulings on the entire transaction. The program applies primarily to transactions under §§ 332, 351, 355, 368, and 1036 and is intended to improve efficiency and timeliness of rulings by focusing on issues that are germane, specific, and not clearly resolved under existing authority.

The IRS also released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums, and Chief Counsel Advice)

Recent court decision

May 4, 2026: In Kadau v. Commissioner, T.C. Memo. 2026-37, the US Tax Court held that a taxpayer’s micro-captive insurance arrangement lacked economic substance under § 7701(o) and sustained 40% accuracy-related penalties under § 6662(i) for nondisclosed noneconomic substance transactions, totaling approximately $174,500 for tax years 2012 to 2015. The Court found that the arrangement failed both prongs of the economic substance test, concluding it did not meaningfully change the taxpayer’s economic position and lacked a substantial non-tax business purpose, finding that the taxpayer engaged in a circular flow of funds and paid excessive, non-arm’s-length premiums.

The court further held that the taxpayer failed to adequately disclose the arrangement, justifying application of the heightened 40% penalty rate.

IRS roundup: April 20 – May 1, 2026

by Kai M. Fenty and Edward L. Froelich | May 7, 2026 | Appellate Courts, Court Procedure Matters, IRS Guidance, Significant Court Decision, Tax Reform, Trial Courts

Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for April 20, 2026 – May 1, 2026.

April 23, 2026: The IRS has reportedly begun the process of terminating a lead criminal investigation agent involved in probes of Malta pension structures and Puerto Rico’s Act 60 tax incentives, raising concerns about the continuity of those enforcement efforts. The agent was actively pursuing complex cases involving wealthy taxpayers and multinational structures, and his removal comes amid broader IRS workforce reductions and enforcement resource constraints.

The development has prompted questions from practitioners and policymakers about whether enforcement momentum in these areas will slow, even as the IRS continues to signal that investigations into offshore pension arrangements and Puerto Rico tax planning strategies remain ongoing.

April 24, 2026: The IRS Office of Chief Counsel issued Chief Counsel Advice 202617012, addressing when small corporations may qualify for a more liberal application of reasonable cause relief from penalties under § 6038A for failure to file Form 5472. The guidance explains that corporations with gross receipts of $20 million or less may be eligible if they meet specific criteria, including a lack of knowledge of the filing requirements, limited US presence, and prompt compliance once notified by the IRS.

The Office of Chief Counsel clarified that a “liberal” standard means the IRS should apply greater flexibility in evaluating reasonable cause, but taxpayers must still demonstrate good faith and reasonable cause to the satisfaction of the secretary.

April 29, 2026: The IRS published a notice announcing a public hearing on proposed regulations under § 45Z (the Clean Fuel Production Credit). The hearing has been expanded to run May 27 – 29, 2026, beginning at 9:00 am EDT each day. The proposed regulations address credit eligibility, life cycle emissions rates, and certification and registration requirements for clean fuel producers. Individuals seeking to attend the hearing must request access by May 22, 2026.

The IRS also released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums, and Chief Counsel Advice)

Recent court decisions

April 21, 2026: In Liberty Global, Inc. v. United States, in a split decision, the US Court of Appeals for the Tenth Circuit held that the codified economic substance doctrine under § 7701(o) applied to a taxpayer’s multistep transaction. The Court found that the taxpayer’s transaction structure generated no meaningful economic change and had no substantial non-tax purpose.

April 22, 2026: In Simmons v. Commissioner, T.C. Memo. 2026-34, the US Tax Court sustained the IRS’s deficiency determinations and accuracy-related penalties under § 6662(a), holding that the taxpayer failed to adequately substantiate several business and rental deductions. The Court found that the taxpayer did not meet the strict substantiation requirements of § 274(d) for automobile expenses and provided no evidence supporting claimed food expenses while also disallowing interest deductions under § 163(a) because the taxpayer failed to show that the expenses [...]

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IRS roundup April 1 – April 9, 2026

by Kai M. Fenty and Edward L. Froelich | Apr 13, 2026 | Court Procedure Matters, IRS Guidance, Significant Court Decision, Tax Reform, Trial Courts

Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for April 1, 2026 – April 9, 2026.

April 3, 2026: The White House proposed significant budget cuts to the Treasury Inspector General for Tax Administration (TIGTA), reducing its funding by nearly 17% for fiscal year 2027 to the lowest level since 2007. TIGTA warned that the cuts, combined with recent staffing losses, could lead to a 35% reduction in oversight activities at a time when risks at the IRS are increasing and have already forced the watchdog to cancel dozens of audits and reviews.

The proposal comes alongside broader reductions to IRS funding and staffing, including cuts to enforcement resources, raising concerns among practitioners that diminished oversight could weaken accountability and tax administration – particularly as the IRS undergoes workforce reductions and expands its use of new technologies, such as artificial intelligence.

April 6, 2026: Taxpayers are urging the Supreme Court of the United States to consider whether the Seventh Amendment guarantees a right to a jury trial for IRS civil penalties in Hirsch v. US Tax Court, arguing that the Court’s 2024 decision in SEC v. Jarkesy should apply in the tax context. Hirsch arises from fraud penalties exceeding $15 million that were assessed against taxpayers who allegedly misrepresented US Virgin Islands residency. A ruling in the plaintiffs’ favor could significantly alter IRS enforcement by making penalties harder to impose and potentially slowing audits and collections.

To date, courts have largely rejected similar arguments, relying on the “public rights” doctrine and long-standing precedent treating tax penalties as remedial rather than punitive, but practitioners note that the issue is gaining traction. If the Supreme Court requires jury trials for certain tax penalties, it could reshape the balance between taxpayers and the IRS, particularly for high-dollar cases, while raising concerns about reduced deterrence and increased administrative burdens on the agency.

April 6, 2026: The IRS issued Revenue Procedure 2026-14, providing guidance for states to nominate population census tracts for designation as qualified opportunity zones, effective January 1, 2027, under §§ 1400Z-1 and 1400Z-2, as amended by the One Big Beautiful Bill Act. The revenue procedure outlines eligibility requirements for low-income communities, limits designations to 25% of eligible tracts per state, and establishes deadlines for nominations and US Department of the Treasury certification.

The IRS also released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums, and Chief Counsel Advice).

Proposed changes to the Voluntary Disclosure Program (VDP)

April 6, 2026: The IRS proposed updates to VDP that would replace the one-time 75% civil fraud penalty with 20% accuracy-related penalties applied annually over the six-year disclosure period while also imposing a new requirement that taxpayers pay all taxes, penalties, and interest and file all required returns within 90 days of conditional acceptance. Practitioners generally support the move away from the 75% penalty but warn that the cumulative penalties (along [...]

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IRS roundup: March 9 – March 25, 2026

by Kai M. Fenty, Matthew J. Blaney and Edward L. Froelich | Mar 26, 2026 | Court Procedure Matters, IRS Guidance, Significant Court Decision, Tax Reform, Trial Courts

Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for March 9, 2026 – March 25, 2026.

AI controversy developments

March 20, 2026: The US Tax Court is considering developing a disciplinary framework for the misuse of artificial intelligence (AI) in litigation following concerns raised by Judge Mark V. Holmes regarding lawyers citing AI-generated, nonexistent cases. Judge Holmes indicated that the Court is proceeding cautiously given that a large share of its docket involves pro se taxpayers and emphasized the difficulty of crafting appropriate sanctions in that context. The discussion highlights broader concerns about hallucinated authorities, potential IRS misuse of AI, and the need to protect sensitive taxpayer information as the Court balances enforcement with legitimate AI uses.

IRS guidance

March 13, 2026: The IRS announced that the secretary of the US Department of the Treasury is no longer serving as acting IRS commissioner following the expiration of authority under the Federal Vacancies Reform Act of 1998. Chief Executive Officer Frank J. Bisignano is currently leading the IRS’s day-to-day operations.

March 16, 2026: The IRS issued Revenue Ruling 2026-11, updating the rules and technical specifications for substitute versions of Form 941, Form 8974, and related schedules, including Schedules B, D, and R. The guidance provides standards for paper and computer-generated substitutes used by software developers and payroll providers and supersedes prior guidance.

March 17, 2026: The IRS issued Notice 2026-19, providing updated interest rates for pension the corporate bond monthly yield curve, spot segment rates under Internal Revenue Code (Code) § 417(e)(3), and 24-month average segment rates under Code § 430(h)(2). The notice also includes the applicable 30-year Treasury rate for February 2026 (4.76%) and related weighted average rates.

March 18, 2026: The IRS issued Notice 2026-20, extending for one additional year the temporary relief provided by Notice 2025-7, which allows taxpayers to use alternative methods to identify which units of digital assets are sold, disposed of, or transferred when held with a broker. Under this relief, taxpayers may identify units on their own books and records, including through standing orders, rather than communicating with brokers. The notice clarifies that this does not prevent taxpayers from complying with § 1.1012-1(j)(3)(ii).

March 20, 2026: The IRS issued Revenue Procedure 2026-17, providing transition relief under Code § 163(j) that allows certain taxpayers to withdraw previously irrevocable elections to be treated as electing real property trades or businesses, electing farming businesses, or excepted regulated utility trades or businesses. The guidance also permits taxpayers withdrawing those elections to make a late election out of bonus depreciation, allows taxpayers to revoke or make controlled foreign corporation group elections without regard to the 60-month limitation, and permits eligible Bipartisan Budget Act of 2015 (BBA) partnerships to file amended Forms 1065 and issue amended Schedules K-1.

The IRS also released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums, and Chief Counsel Advice).

Recent court decisions

March 9, 2026: [...]

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IRS roundup: March 3 – March 10, 2026

by Kai M. Fenty, Matthew J. Blaney and Edward L. Froelich | Mar 10, 2026 | Court Procedure Matters, IRS Guidance, Significant Court Decision, Tax Reform, Trial Courts

Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for March 3, 2026 – March 10, 2026.

IRS guidance

March 3, 2026: The IRS released Revenue Procedure 2026-15, which provides the inflation-adjusted luxury automobile depreciation limits under Internal Revenue Code (Code) Section 280F for passenger vehicles, including trucks and vans, placed in service in 2026 and the lease inclusion amounts for vehicles first leased in 2026. The guidance includes separate first-year depreciation caps depending on whether bonus depreciation under Section 168(k) applies.

March 4, 2026: The IRS released Revenue Procedure 2026-16, which provides information for individuals who failed to meet Code Section 911(d)(1) requirements for 2025 due to adverse conditions, listing countries and “date of departure on or after” thresholds (e.g., Haiti, Ukraine, and the Democratic Republic of the Congo, among others).

March 5, 2026: The IRS released Notice 2026-4, which requests comments on whether to modify requirements for electronic furnishing of certain payee statements, including for brokers and potentially other furnishers.

The IRS also released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums, and Chief Counsel Advice).

Recent court decisions

March 2, 2026: The US Tax Court held that a German parent company had zero basis in a $610 million promissory note that was contributed to a partnership after its wholly owned subsidiary elected to be disregarded for US tax purposes. Because the subsidiary’s retroactive “check-the-box” election caused the transaction to be treated as the parent’s contribution of its own note, the Tax Court concluded that the note had no tax basis since a taxpayer incurs no “cost” in issuing its own obligation, resulting in zero basis both in the partnership interest and in the partnership’s basis in the note.

IRS roundup: February 17 – February 27, 2026

by Suzanne Golshanara and Matthew J. Blaney | Mar 4, 2026 | IRS Guidance, Tax Reform

Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for February 17, 2026 – February 27, 2026.

February 17, 2026: The IRS released Revenue Ruling 2026-6, which provides the March 2026 applicable federal rates.

February 18, 2026: The IRS released Notice 2026-7, which provides additional interim guidance and updates existing guidance on the application of the corporate alternative minimum tax (CAMT) under Internal Revenue Code (Code) Sections 55, 56A, and 59. The notice modifies previously issued CAMT guidance, particularly Notices 2025‑49 and 2025‑46. It also introduces several new updates to adjusted financial statement income regarding intangibles and repairs under Code Section 197 and changes to domestic research amortization expenses based on changes brought by the One Big Beautiful Bill Act (OBBBA).

February 19, 2026: The IRS released Notice 2026-14, which provides the 24-month average corporate bond segment rates for February 2026, the yield curve and segment rates for single-employer plans, and the 30-year Treasury securities interest rates.

February 20, 2026: The IRS released Notice 2026-16, which provides interim guidance and announces forthcoming proposed regulations addressing the special depreciation allowance for qualified production property under Code Section 168(n), as created by the OBBBA.

The notice provides interim guidance regarding the definitions of “qualified production property” and “qualified production activity,” how to determine the special depreciation allowance for qualified production property, and how and when an election to treat property as qualified production property is made. Qualified production property generally includes nonresidential real property used as an integral part of a qualified production activity, such as manufacturing, chemical production, agricultural production, or refining, that results in the substantial transformation of a qualified product. The notice also explains how the depreciation recapture rules apply to property that ceases to meet the requirements to be qualified production property. Taxpayers may rely on Notice 2026-16 until proposed regulations are issued. Comments on the interim guidance are requested within 60 days.

February 23, 2026: The IRS released Announcement 2026-7, which states that certain portions of final regulations relating to required minimum distributions under Code Section 401(a)(9) will apply for the distribution calendar year that begins no earlier than six months after the date the final regulations are issued in the Federal Register.

February 25, 2026: The IRS released Notice 2026-17, which announces forthcoming proposed regulations under Code Section 987. The notice allows taxpayers to elect the equity and basis pool method for determining taxable income or loss and foreign currency gain or loss with respect to a qualified business unit.

The IRS also released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums, and Chief Counsel Advice).

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