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.