e-News for Small Business Issue 2025-13

Billy Long was sworn in as the 51st Commissioner of the IRS on June 16. Long was confirmed by the Senate on June 12 and will run through Nov. 12, 2027. In his initial message to employees, he said he intends to develop a more taxpayer friendly culture at the IRS.

Security Summit summer series to help tax pros

The IRS and the Security Summit partners just launched the summer campaign, Protect Your Clients; Protect Yourself. This campaign is designed to help tax professionals protect themselves against new and ongoing tax-related identity theft threats.

This summer’s effort will run every other Tuesday, coinciding the IRS Nationwide Tax Forums.

IRS relief for brokers required to file information returns and backup withhold on certain digital asset sales

The Treasury Department and the IRS issued Notice 2025-33 extending and modifying the transition relief for brokers who are required to file Form 1099-DA, Digital Asset Proceeds From Broker Transactions to report certain digital asset sale and exchange transactions by customers.

This notice extends the transition relief from backup withholding tax liability and associated penalties for any broker who fails to withhold and pay the backup withholding tax for any digital asset sale or exchange transaction during calendar year 2026.

The notice also extends the limited transition relief from backup withholding tax liability for an additional year and provides additional transition relief for brokers for sales of digital assets during calendar year 2027 for certain customers who haven’t been previously classified by the broker as U.S. persons.

IRS improves Pre-Filing Agreement Tax Certainty Program

The Pre-Filing Agreement program provides greater tax certainty for large business and international taxpayers. The IRS renews its commitment to expand access to cooperative tax compliance strategies that prevent disputes before they arise.

The PFA program allows businesses under the Large Business and International Division jurisdiction to resolve potential tax issues before filing their tax return, offering certainty, reducing audit risk, and encouraging voluntary compliance.

Key enhancements:

Redesigned PFA landing page with program statistics, a streamlined process overview and direct navigation to dispute prevention resources.
New step-by-step instructions to submit a PFA request.
A Pre-Filing Agreement likely suitable issues and documentation page.
Updated program guidelines to help businesses strategically align their PFA submissions with tax filing deadlines.

To learn more or provide feedback, visit Dispute prevention and resolution for large business and international taxpayers or email [email protected] with the subject line Feedback on PFA Program.

Tax relief for Mississippi, Oklahoma and Texas disaster victims

The IRS announced tax relief for businesses and individuals in parts of Mississippi affected by severe storms.

In addition, parts of Oklahoma affected by wildfires and straight-line winds also qualify for tax relief; as do victims of recent severe storms and flooding in parts of Texas. These businesses and individual taxpayers now have until November 3, 2025, to file various tax returns and make tax payments.

Visit the IRS Disaster Relief page for full details.

Help to decide between a hobby or business

Hobbies and businesses are treated differently when it comes to filing taxes. The biggest difference between the two is that businesses operate to make a profit while hobbies are for pleasure or recreation.

One question to consider when determining if they have a business or hobby is whether there is an intent to make a profit and do they depend on the income for their livelihood?

People should consider a few other things when deciding whether their project is a business or hobby, including reviewing the Code of Federal Regulations. No single thing is the deciding factor. Taxpayers should review all the factors to make the best decision.

National Taxpayer Advocate issues mid-year report to Congress

National Taxpayer Advocate Erin M. Collins recently released the Fiscal Year 2026 Objectives Report to Congress. The report credits the IRS with the most successful filing season in years and highlights improvements to the business account features of IRS online accounts. It also identifies the Taxpayer Advocate Service’s key objectives for the next fiscal year. These include advocating for the processing completion of Employee Retention Credit claims and improving the overall taxpayer experience through increased automation.

Visit the Taxpayer Advocate Service website more information.

Check out National Taxpayer Advocate blog about key issues in tax administration. Click here to subscribe. Past blog post are available here.

Other tax news

These topics may be of interest to small businesses, their employees and community partners:

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