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The IRS has announced that, under the phased implementation of the One Big Beautiful Bill Act (OBBBA), there will be no changes to individual information returns or federal income tax withholding tables for the tax year at issue. 

The IRS has announced that, under the phased implementation of the One Big Beautiful Bill Act (OBBBA), there will be no changes to individual information returns or federal income tax withholding tables for the tax year at issue. Specifically, Form W-2, existing Forms 1099, Form 941 and other payroll return forms will remain unchanged for 2025. Employers and payroll providers are instructed to continue using current reporting and withholding procedures. This decision is intended to avoid disruptions during the upcoming filing season and to give the IRS, businesses and tax professionals sufficient time to implement OBBBA-related changes effectively.

In addition to this, IRS is developing new guidance and updated forms, including changes to the reporting of tips and overtime pay for TY 2026. The IRS will coordinate closely with stakeholders to ensure a smooth transition. Additional information will be issued to help individual taxpayers and reporting entities claim benefits under OBBBA when filing returns.

IR-2025-82

The IRS issued frequently asked questions (FAQs) relating to several energy credits and deductions that are expiring under the One, Big, Beautiful Bill Act (OBBB) and their termination dates. The FAQs also provided clarification on the energy efficient home improvement credit, the residential clean energy credit, among others.

The IRS issued frequently asked questions (FAQs) relating to several energy credits and deductions that are expiring under the One, Big, Beautiful Bill Act (OBBB) and their termination dates. The FAQs also provided clarification on the energy efficient home improvement credit, the residential clean energy credit, among others.

Energy Efficient Home Improvement Credit

The credit will not be allowed for any property placed in service after December 31, 2025.

Residential Clean Energy Credit

The credit will not be allowed for any expenditures made after December 31, 2025. Due to the accelerated termination of the Code Sec. 25C credit, periodic written reports, including reporting for property placed in service before January 1, 2026, are no longer required.

A manufacturer is still required to register with the IRS to become a qualified manufacturer for its specified property to be eligible for the credit.

Clean Vehicle Program

New user registration for the Clean Vehicle Credit program through the Energy Credits Online portal will close on September 30, 2025. The portal will remain open beyond September 30, 2025, for limited usage by previously registered users to submit time-of-sale reports and updates to such reports.

Acquiring Date

A vehicle is “acquired” as of the date a written binding contract is entered into and a payment has been made. Acquisition alone does not immediately entitle a taxpayer to a credit. If a taxpayer acquires a vehicle and makes a payment on or before September 30, 2025, the taxpayer will be entitled to claim the credit when they place the vehicle in service, even if the vehicle is placed in service after September 30, 2025.

FS-2025-5

IR-2025-86

The IRS has provided guidance regarding what is considered “beginning of constructions” for purposes of the termination of the Code Sec. 45Y clean electricity production credit and the Code Sec. 48E clean electricity investment credit. The One Big Beautiful Bill (OBBB) Act (P.L. 119-21) terminated the Code Secs. 45Y and 48E credits for applicable wind and solar facilities placed in service after December 31, 2027.

The IRS has provided guidance regarding what is considered “beginning of constructions” for purposes of the termination of the Code Sec. 45Y clean electricity production credit and the Code Sec. 48E clean electricity investment credit. The One Big Beautiful Bill (OBBB) Act (P.L. 119-21) terminated the Code Secs. 45Y and 48E credits for applicable wind and solar facilities placed in service after December 31, 2027. The termination applies to facilities the construction of which begins after July 4, 2026. On July 7, 2025, the president issue Executive Order 14315, Ending Market Distorting Subsidies for Unreliable, Foreign-Controlled Energy Sources, 90 F.R. 30821, which directed the Treasury Department to take actions necessary to enforce these termination provisions within 45 days of enactment of the OBBB Act.

Physical Work Test

In order to begin construction, taxpayers must satisfy a “Physical Work Test,” which requires the performance of physical work of a significant nature. This is a fact based test that focuses on the nature of the work, not the cost. The notice addresses both on-site and off-site activities. It also provides specific lists of activities that are to be considered work of a physical nature for both solar and wind facilities. Preliminary activities or work that is either in existing inventory or is normally held in inventory are not considered physical work of a significant nature.

Continuity Requirement

The Physical Work Test also requires that a taxpayer maintain a continuous program of construction on the applicable wind or solar facility, the Continuity Requirement. To satisfy the Continuity Requirement, the taxpayer must maintain a continuous program of construction, meaning continuous physical work of a significant nature. However, the notice provides a list of allowable “excusable disruptions,” including delays related to permitting, weather, and acquiring equipment, among others.

The guidance also provides a safe harbor for the Continuity Requirement. Under the safe harbor, the Continuity Requirement will be met if a taxpayer places an applicable wind or solar facility in service by the end of a calendar year that is no more than four calendar years after the calendar year during which construction of the applicable wind or solar facility began. Thus, if construction begins on an applicable wind or solar facility on October 1, 2025, the applicable wind or solar facility must be placed in service before January 1, 2030, for the safe harbor to apply.

Five Percent Safe Harbor for Low Output Solar Facilities

A safe harbor is available for a low output solar facility, which is defined as an applicable solar facility that has maximum net output of not greater than 1.5 megawatt. A low output solar facility may also establish that construction has begun before July 5, 2026, by satisfying the Five Percent Safe Harbor (as described in section 2.02(2)(ii) of Notice 2022-61).

Additional Guidance

The notice provides additional guidance regarding: construction produced for the taxpayer by another party under a binding written contract; the definition of a qualified facility; the definition of property integral to the applicable wind or solar facility; the application of the 80/20 rule to retrofitted applicable wind or solar facilities under Reg. §§ 1.45Y-4(d) and 1.48E-4(c); and the transfer of an applicable wind or solar facility.

Effective Date

Notice 2025-42 is effective for applicable wind and solar facilities for which the construction begins after September 1, 2025.

Notice 2025-42

The Treasury Inspector General for Tax Administration suggested the way the Internal Revenue Service reports level of service (ability to reach an operator when requested) and wait times does not necessarily reflect the actual times taxpayers are waiting to reach a representative at the agency.

The Treasury Inspector General for Tax Administration suggested the way the Internal Revenue Service reports level of service (ability to reach an operator when requested) and wait times does not necessarily reflect the actual times taxpayers are waiting to reach a representative at the agency.

"For the 2024 Filing Season, the IRS reported an LOS of 88 percent and wait times averaging 3 minutes," TIGTA stated in an August 14, 2025, report. "However, the reported LOS and average wait times only included calls made to 33 Accounts Management (AM) telephone lines during the filing season."

TIGTA stated that the agency separately tracks Enterprise LOS, a broader measure of of the taxpayer experience which includes 27 telephone lines from other IRS business units in addition to the 33 AM telephone lines.

"The IRS does not widely report an Enterprise-wide wait time- as the reported average wait time computation includes only the 33 AM telephone lines," the report states. "According to IRS data, the average wait times for the other telephone lines were much longer than 3 minutes, averaging 17 to 19 minutes during the 2024 Filing Season."

TIGTA recommended that the IRS adjust its reporting to include Enterprise LOS in addition to AM LOS and provide averages across all telephone lines.

"The IRS disagreed with both recommendations stating that the LOS metric does not provide information to determine taxpayer experience when calling, and including wait times for telephone lines outside the main helpline would be confusing to the public," the Treasury watchdog reported. "We maintain that whether a taxpayer can reach an assistor is part of the taxpayer experience and providing average wait times across all telephone lines for the entire fiscal year demonstrates transparency."

The Treasury watchdog also noted that the National Taxpayer Advocate has stated the AM LOS is "materially misleading" and should be replaced as a benchmark.

TIGTA also warned that the reduction in workforce at the IRS could hurt recent improvements to LOS and wait times, noting that the agency will lose about 23 percent of its customer service representative employees by the end of September 2025.

"The staffing impact on the remainder of Calendar Year 2025 and the 2026 Filing Season are unknown, but we will be monitoring these issues."

It also noted that the IRS is working on a new metric – First Call/Contact Resolution – to measure the percentage of calls that resolve the customer’s issue without a need to transfer, escalate, pause, or return the customer’s initial phone call. TIGTA reported that analysis of FY 2024 data revealed that 33 percent of taxpayer calls were transferred unresolved at least once.

By Gregory Twachtman, Washington News Editor

The Financial Crimes Enforcement Network (FinCEN) has granted exemptive relief to covered investment advisers from the requirements the final regulations in FinCEN Final Rule RIN 1506-AB58 (also called the "IA AML Rule"), which were set to become effective January 1, 2026. This order exempts covered investment advisers from all requirements of these regulations until January 1, 2028.

The Financial Crimes Enforcement Network (FinCEN) has granted exemptive relief to covered investment advisers from the requirements the final regulations in FinCEN Final Rule RIN 1506-AB58 (also called the "IA AML Rule"), which were set to become effective January 1, 2026. This order exempts covered investment advisers from all requirements of these regulations until January 1, 2028.

The regulations require investment advisers (defined in 31 CFR §1010.100(nnn)) to establish minimum standards for anti-money laundering/countering the financing of terrorism (AML/CFT) programs, report suspicious activity to FinCEN, and keep relevant records, among other requirements.

FinCEN has determined that the regulations should be reviewed to ensure that they strike an appropriate balance between cost and benefit. The review will allow FinCEN to ensure the regulations are consistent with the Trump administration's deregulatory agenda and are effectively tailored to the investment adviser sector's diverse business models and risk profiles, while still adequately protecting the U.S. financial system and guarding against money laundering, terrorist financing, and other illicit finance risks. Covered investment advisers are exempt from the obligations of the regulations while the review takes place.

FinCEN intends to issue a notice of proposed rulemaking (NPRM) to propose a new effective date for these regulations no earlier than January 1, 2028.

This exemptive relief is effective from August 5, 2025, until January 1, 2028.

FinCEN Exemptive Relief Order

Congress ended 2016 passing a few targeted tax bills and lawmakers focused on the incoming Trump administration and tax reform in 2017. President-elect Donald Trump campaigned on tax cuts for individuals and businesses. Already, lawmakers from both sides of the aisle are preparing for what is expected to be spirited debate over tax cuts in 2017.

Congress ended 2016 passing a few targeted tax bills and lawmakers focused on the incoming Trump administration and tax reform in 2017. President-elect Donald Trump campaigned on tax cuts for individuals and businesses. Already, lawmakers from both sides of the aisle are preparing for what is expected to be spirited debate over tax cuts in 2017.

Year-end legislation

In December, President Obama signed the 21st Century Cures Act and the Combat-Injured Veterans Tax Fairness Act. Under the 21st Century Cures Act, eligible small employers may adopt qualified small employer health reimbursement arrangements (QSEHRAs) to reimburse employees for the cost of premiums for individual or family health coverage without being subject to group-health plan requirements. The new law also extends transition relief for small employers. Without the new law, small employers ran the risk of a costly excise tax. The Combat-Injured Veterans Tax Fairness Act will refund money that was improperly withheld for tax purposes from severance payments to certain veterans of the U.S. Armed Forces. Both bills enjoyed bipartisan support in the House and Senate.

Unlike past years, Congress did not take up the so-called tax extenders in December. The Protecting Americans from Tax Hikes Act of 2015 (PATH Act) extended or made permanent many extenders but left out some incentives for energy efficiency and production, along with a few incentives for individuals. These remaining extenders could be taken up in 2017 as part of tax reform.

New administration

On the campaign trail, President-elect Donald Trump called for reducing the tax rates on individuals, lowering the corporate tax rate, repealing the federal estate tax, and creating new incentives for families. President-elect Trump also called for eliminating some unspecified tax preferences and taxing carried interest as ordinary income. More details are expected to be unveiled after President-elect Trump’s takes office on January 20.

House Republicans in June 2016 put forth a tax reform package that has many similar features to President-elect Trump’s proposals. The House GOP plan calls for individual and business rate cuts. However, there are differences. One difference is the House GOP’s so-called border adjustability; another difference is the GOP’s elimination of the IRS Oversight Board. These and other provisions are certain to generate debate in the early part of 2017.

Any tax reform package will need not only to pass the House but also the Senate before reaching the White House. While Republicans have a majority in the Senate, the chamber’s rules generally require a super-majority to pass tax bills. Republicans could use a process known as reconciliation to pass a tax reform bill with a simple majority. Any move to use reconciliation will also likely spark debate among lawmakers.

If you have any questions about year-end 2016 tax legislation or the prospects for tax reform in 2017, please contact our office.

One month after the presidential election, taxpayers are learning more about President-elect Donald Trump’s tax proposals for his administration. Although exact details, including legislative language, are likely months away, taxpayers have a snapshot of the president-elect’s tax proposals for individuals and businesses.

One month after the presidential election, taxpayers are learning more about President-elect Donald Trump’s tax proposals for his administration. Although exact details, including legislative language, are likely months away, taxpayers have a snapshot of the president-elect’s tax proposals for individuals and businesses.

Note. At the time this article was prepared, the primary descriptions of President-elect Trump’s tax proposals are on his campaign and transition websites. The materials on these websites are not the same as legislation, which would amend the Tax Code. Rather, they discuss the President-elect’s tax proposals in very general and broad language.

Tax reform

Tax reform has been a regular topic in recent years. While numerous tax reform proposals were unveiled during the Obama administration, an overhaul of the Tax Code remained elusive. President Obama released a tax reform framework that called for a reduction in the corporate tax rate in exchange for the elimination of some energy tax preferences and other unspecified business tax preferences. Former House Ways and Means Chair Dave Camp, R-Mich., made a detailed tax reform proposal several years ago. Many members of Congress have also introduced tax reform bills. The election of Trump, along with GOP majorities in the House and Senate, is expected to give momentum to tax reform in 2017.

Proposals

During the campaign, President-elect Trump described a number of tax reform proposals, including (not an exhaustive list):

• Reduce the number of individual income tax rates from seven to three with rates at 12, 25 and 33 percent
• Eliminate the alternative minimum tax (AMT) for individuals and businesses
• Create new Dependent CARE Savings accounts
• Provide “spending rebates” for lower-income taxpayers for childcare expenses through the earned income tax credit (EITC)
• Increase standard deduction to $15,000 for single individuals and $30,000 for married couples filing a joint return
• Enhance Code Sec. 179 small business expensing
• Reduce the top corporate tax rate to 15 percent
• Tax carried interest as ordinary income
• Eliminate head of household filing status
• Cap itemized deductions for higher-income taxpayers

Affordable Care Act

The Affordable Care Act (ACA) includes a number of taxes, such as the excise tax on medical devices and the excise tax on high-dollar health insurance plans (often called the “Cadillac plan” tax), the net investment income (NII) tax, and the additional Medicare tax. The ACA also created new health-related tax incentives, including the Code Sec. 36B premium assistance tax credit and the Code Sec. 45R small employer health insurance tax credit.

During the campaign, President-elect Trump proposed to repeal the ACA. Post-election, it appears that the president-elect is open to retaining some of the ACA. The president-elect has mentioned coverage for children under age 26 as one provision of the ACA that he views favorably.

Congress

The 115^th Congress will convene in January. Republicans have majorities in the House and Senate. Being the majority means that Republicans will chair the tax writing committees in the 115^th Congress: the House Ways and Means Committee and the Senate Finance Committee.

Looking to 2017, tax reform legislation will likely have its start in the House Ways and Means Committee. In the House, Republicans have already unveiled a tax reform blueprint. There are similarities between the House GOP blueprint and President-elect Trump’s tax proposals. For example, both call for reducing the federal income tax rates for individuals along with lowering the corporate tax rate.

Please contact our office if you have any questions about these or any other tax proposals. Our office will keep you posted of developments.