e-News for Tax Professionals 2025-48

The Department of the Treasury and the IRS issued Notice 2026-05 providing guidance on new tax benefits for Health Savings Account participants under the One, Big, Beautiful Bill (OBBB). These changes expand HSA eligibility, which allows more clients to save and to pay for healthcare costs through tax-free HSAs.

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

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

Notice 2026-05 addresses each of these changes. Treasury and the IRS invite comments on all aspects of this Notice by Mar. 6, 2026. Commentors are encouraged to use the Federal e-Rulemaking portal to submit comments online (indicate “IRS-2025-0335”). Paper submissions should be sent to: Internal Revenue Service, CC:PA:01:PR (Notice 2026-05), Room 5503, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044.

For more information, please see the One, Big, Beautiful Bill provisions page on IRS.gov.

2. 2025 Nationwide Tax Forum Online: Distributions from Retirement Plans and IRAs

Tax professionals may want to review the IRS Nationwide Tax Forum Online (NTFO) seminar Distributions from Retirement Plans and IRAs: A Crash Course before the end of the year. This seminar explains when clients may be required to take distributions from retirement plans and IRA accounts and when they are allowed to access retirement savings while still working. The seminar also covers exclusions, distribution codes, expanded contribution options for Roth accounts and more.

All NTFO self-study seminars cost $29 each. Tax pros can earn one continuing education credit for each NTFO self-study seminar or audit a presentation for free. For more information, visit irstaxforumonline.com.

3. New Contact Information for Collection Advisory Offices

Tax professionals can use Publication 4235, Collection Advisory Offices Contact Information, to determine which IRS office to contact with questions about certain collection-related topics, notices of federal tax lien and where to submit requests for lien-related certificates. Tax professionals and their clients generally should not send correspondence to their local office.

In addition to contact information for IRS offices, Publication 4235 also includes updated information about where to file certain applications and forms, along with IRS resources for a variety of topics. For example, it includes links to the understanding a federal tax lien webpage, online account where clients can check the total amount of their tax debt, frequently asked questions on estate taxes and more.

4. Technical Guidance

The IRS released draft versions of Form 8964-ELE, Section 987 Elections, and Form 8964-TRA, Section 987 Transition Information, as well as draft versions of the Instruction 8964-ELE and Instruction 8964-TRA.

On Dec. 11, 2024, Treasury and the IRS issued final regulations under section 987 of the Internal Revenue Code. The regulations generally apply to taxable years beginning after Dec. 31, 2024. The Treasury Department and the IRS are considering possible modifications to the 2024 final regulations in connection with deregulatory efforts.

Tax professionals and taxpayers can use the new Form 8964-ELE to make or revoke elections under the 2024 final regulations as required under Regulations section 1.987-1(g). Individuals can use the new Form 8964-TRA to report the section 987 transition information required under Regulations section 1.987-10(k).

The IRS is developing another new form, Form 8964, to report amounts computed under the 2024 final regulations. The IRS expects to release a draft version of Form 8964 for comments in the first half of 2026. The published form is expected to be applicable to tax year 2027. This timing provides taxpayers sufficient notice and opportunity to comment and allows time for consideration of modifications to the 2024 final regulations.

To minimize taxpayer burden, until tax year 2027, taxpayers should continue to report section 987 gain or loss amounts on Form 8858, Information Return of U.S. Persons With Respect to Foreign Disregarded Entities and Foreign Branches. Taxpayers should also complete the new Form 8964-ELE and Form 8964-TRA, as applicable.

The IRS expects to publish final versions of Form 8964-ELE, Form 8964-TRA and the related instructions in the first quarter of 2026.

Three recent IRS notices detail international tax law provisions under Public Law 119-21, 139 Stat. 72 (July 4, 2025), commonly known as the One, Big, Beautiful Bill Act:

Notice 2025-75 announces that the Department of the Treasury and the Internal Revenue Service intend to issue proposed regulations regarding the transition rule for dividends (the “transition rule”) in section 70354(c)(2). The transition rule modifies the application of section 951(a)(2)(B) of the Internal Revenue Code for certain taxable years of foreign corporations beginning before Jan. 1, 2026.
Notice 2025-77 describes proposed regulations Treasury and the IRS intend to issue under section 70312, providing guidance on the effective date and application of section 960(d)(4) of the Internal Revenue Code.
Notice 2025-78 announces that Treasury and the IRS intend to issue regulations regarding the new rules for calculating DEI. This notice primarily addresses the meanings of intangible property, “any other property of a type,” and sale or other disposition for section 250.

Notice 2025-75, Notice 2025-77 and Notice 2025-78 will be in Internal Revenue Bulletin 2025-52, dated Dec. 22, 2025.

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