e-News for Tax Professionals 2025-50

Preparer tax identification numbers expire on December 31. Anyone who receives compensation to prepare or help prepare a federal tax return or claim for refund must have a valid PTIN. All enrolled agents must also have a valid PTIN to maintain their active status.

Paid tax professionals who need to apply for an initial PTIN or renew a PTIN should use the online portal, which takes about 15 minutes to complete. A paper option, Form W-12, IRS Paid Preparer Tax Identification Number (PTIN) Application and Renewal, along with the instructions, are also available for PTIN applications and renewals. However, the paper form can take approximately six weeks to process. The cost to renew or get a PTIN for 2026 is $18.75.

2. IRS Seeks Public Comment on Voluntary Disclosure Practice Proposal

Tax professionals can submit comments during a 90-day public comment period, ending March 22, 2026, for proposed updates to the Voluntary Disclosure Practice.

Proposed updates include:

Standard disclosure and compliance requirements;
A more streamlined penalty framework;
An electronically filed Form 14457, Voluntary Disclosure Practice Preclearance Request and Application;
Clear payment terms, with full payment required within three months of a taxpayer’s conditional approval; and
Other required agreements.

Taxpayers who fully comply with the requirements will not be recommended for criminal prosecution.

Submit comments by email to [email protected], with the subject line “PROPOSED VDP PUBLIC COMMENT.” If finalized, the revised procedures are expected to take effect six months after publication of the final terms.

Find more information about the IRS Voluntary Disclosure Practice, including a list of frequently asked questions, at IRS.gov/vdp.

3. Scammers Target EFINs and PTINs

Some tax professionals may take a break during the holidays, but scammers do not. If a scammer stole an EFIN or PTIN, they may be using it to file tax returns. The IRS offers reports so tax professionals can check the number of returns filed with every EFIN and PTIN each week.

Always beware of emails asking for your EFIN. Scammers commonly pose as tax software providers and send fraudulent emails to tax professionals. Tax professionals who experience a data breach should report it to IRS Stakeholder Liaison.

4. Nationwide Tax Forum Online: Final Chance for 2025 CE Credits

Tax professionals needing to earn continuing education credits by the end of the year can find 15 seminars on IRS Nationwide Tax Forum Online (NTFO). Each NTFO self-study seminar costs $29 and provides one CE credit. Alternatively, tax professionals can audit a presentation for free.

5. Technical Guidance

This week’s technical guidance includes:

An announcement of forthcoming guidance related to excise tax on dyed fuel;
A notice about the tax credit for carbon capture and sequestration;
A notice about estimated tax penalty relief from sale of qualified farmland property;
A notice about paid family and medical leave programs; and
Updated FAQs about the limitation on the deduction for business interest expense.

The Department of the Treasury and the IRS announced forthcoming guidance on a new method for recovering federal excise tax paid on dyed fuel established under the One, Big, Beautiful Bill.

Announcement 2026-01 provides general information to interested taxpayers and potential claimants on claiming a payment under a new provision related to dyed fuel. The new law allows a taxpayer to recover federal excise taxes paid on clear diesel fuel or kerosene if that taxpayer later removed the fuel from a terminal as dyed fuel for nontaxable use.

When a pipeline shuts down or closes, fuel may be removed from one terminal, trucked to another terminal and reentered into the bulk transfer/terminal system. Federal law imposes an excise tax on the first removal even if it is subsequently removed as dyed fuel indicating it may only be used for nontaxable purposes. By establishing a statutory refund mechanism to recover the first tax imposed on the dyed fuel, OBBB addresses this issue for affected stakeholders and closes a gap in prior law.

Treasury and the IRS anticipate issuing this guidance in early 2026 and request that taxpayers hold any claims until this guidance is issued. The IRS will not process any claims until that time.

Notice 2026-01 provides guidance for taxpayers claiming the tax credit for carbon capture and sequestration, which was expanded and modified in the OBBB. The notice provides a safe harbor for taxpayers that wish to claim the credit for qualified carbon oxide captured and disposed of in secure geological storage occurring during calendar year 2025. This notice also informs taxpayers that Treasury and IRS intend to issue regulations under section 45Q, including with respect to measurement and verification standards, and that taxpayers may rely on this guidance until the regulations are issued.

Notice 2026-03 provides relief from the additions to tax under sections 6654 and 6655 for underpayment of estimated income tax. It also assists in implementing section 70437 of the OBBB, which added a new limited payment deferral election in section 1062(a) applicable in the case of a sale or exchange of qualified farmland property to a qualified farmer (qualified sale or exchange). In the interest of sound tax administration, the IRS will waive a portion of the addition to tax under sections 6654 and 6655 attributable to a qualified sale or exchange for which an election under section 1062(a) (section 1062 election) is properly made. The amount of the relief depends on the amount of tax the payment of which is deferred by the section 1062 election.

Notice 2026-06 extends the transition period provided in Revenue Ruling 2025-04 for an additional year to calendar year 2026 for states administering paid family and medical leave programs and employers participating in such programs. The notice provides states and employers additional time to make the necessary changes to their systems to comply with the tax and information reporting responsibilities set forth in Revenue Ruling 2025-04.

Notice 2026-01 will be in Internal Revenue Bulletin 2026-4, dated January 20, 2026. Notice 2026-03 and Notice 2026-06 will be in Internal Revenue Bulletin 2026-2, dated January 5, 2026.

The IRS updated frequently asked questions in Fact Sheet 2025-09 regarding changes to the limitation on the deduction for business interest expense (Section 163(j)) under the OBBB.

For tax years beginning after December 31, 2024, OBBB amended Section 163(j) by:

Allowing taxpayers to add back deductions for depreciation, amortization, or depletion when calculating Adjusted Taxable Income.
Expanding the definition of floor plan financing interest to treat, as a motor vehicle, any trailer or camper designed to provide temporary living quarters for recreational, camping or seasonal use and designed to be towed by, or affixed to, a motor vehicle.

For tax years beginning after December 31, 2025, OBBB amended Section 163(j) by:

Clarifying that business interest expense subject to Section 163(j) includes any interest incurred and capitalized during the tax year, except for interest capitalized under Sections 263(g) and 263A(f).

Excluding a U.S. shareholder’s controlled foreign corporation income inclusion items under Sections 951(a), 951A(a) and 78, and associated deductions, from the computation of Adjusted Taxable Income.

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