Inside This Issue

1. IRS: 2025 tax filing season to start on Jan. 27; agency continues historic improvements to expand, enhance tools and filing options
2. National Taxpayer Advocate delivers annual report to Congress
3. Get Ready to file taxes in 2025
4. Final 2024 quarterly estimated tax payment due Jan. 15
5. Don’t miss out on the upcoming EITC Awareness Day
6. Treasury, IRS issue proposed regulations on new Roth catch-up rule, other SECURE 2.0 Act provisions
7. Treasury, IRS issue final rules identifying partnership related-party “basis shifting” transactions as transactions of interest
8. Upcoming webinars for tax professionals
9. Technical Guidance

1.  IRS: 2025 tax filing season to start on Jan. 27; agency continues historic improvements to expand, enhance tools and filing options

The nation’s 2025 tax season will start on Monday, Jan. 27, and will feature expanded and enhanced tools to help taxpayers due to the agency’s historic modernization efforts. Since last tax season, the improvements include more access to tax account information from text and voice virtual assistants, expanded features on the IRS Individual Online Account, more access to dozens of tax forms through cell phones and tablets, and expanded alerts for scams and schemes that threaten taxpayers. The IRS is once again working to provide taxpayers expanded help in-person through more hours at Taxpayer Assistance Centers nationwide. The IRS also will be focused on continuing high levels of service on its main taxpayer phone lines, with a goal of up to 85% level of service. “These taxpayer-focused improvements we’ve done so far are important, but they are just the beginning of what the IRS needs to do,” said IRS Commissioner Danny Werfel. “More can be done with continued investment in the nation’s tax system.”

The IRS expects more than 140 million individual tax returns for tax year 2024 to be filed ahead of the Tuesday, April 15 federal deadline. More than half of all tax returns are expected to be filed this year with the help of a tax professional, and the IRS urges people to use a trusted tax pro to avoid potential scams and schemes.

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2.  National Taxpayer Advocate delivers annual report to Congress

National Taxpayer Advocate Erin M. Collins released her 2024 Annual Report to Congress on Jan. 8. For the first time since 2020, Collins reports the taxpayer experience has noticeably improved, but backlogs in identity theft cases, the processing of Employee Retention Credit claims and scams targeting taxpayers and tax professionals continue to be problems. By law, the Advocate’s report must identify the 10 most serious problems taxpayers are experiencing in their dealings with the IRS and makes administrative and legislative recommendations to address those problems. Some key recommendations include protecting taxpayers in federally declared disaster areas who receive filing and payment relief from inaccurate and confusing collection notices, adjusting estimated tax payment deadlines to occur quarterly, and establishing a uniform mileage deduction rate for all purposes.

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3.  Get Ready to file taxes in 2025

Tax pros: Remind your clients to Get Ready now to file their taxes. Visit the Get Ready page for key information about gathering and organizing tax records, life changes that can affect a refund, what to do with a Form 1099-K, home and energy related credits, how to avoid refund delays and refund timing.

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4.  Final 2024 quarterly estimated tax payment due Jan. 15

If you have clients who paid too little tax in 2024, encourage them to make a fourth quarter estimated tax payment on or before Jan. 15. The Tax Withholding Estimator, available on IRS.gov, can help people determine if they need to make an estimated tax payment. It also helps taxpayers calculate the correct amount of tax to withhold throughout the year based on their complete set of tax facts and circumstances.

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5.  Don’t miss out on the upcoming EITC Awareness Day

Preparations are underway for the 19th annual Earned Income Tax Credit (EITC) Awareness Day, taking place on Jan. 31. IRS partners will be hosting awareness day events nationwide and sharing EITC outreach to ensure taxpayers are aware of the credit. Tax pros: the IRS asks you to share the details about EITC with your clients. Individuals who qualify for the EITC must file a tax return to claim the credit. Visit the EITC Awareness day webpage for more information.

EITC started as a modest tax credit that provided financial assistance to low-income, working families with children. Through numerous legislative changes over the past 50 years, the credit is one of the federal government’s largest anti-poverty programs providing cash support to low-income working families.

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6.  Treasury, IRS issue proposed regulations on new Roth catch-up rule, other SECURE 2.0 Act provisions

The Department of the Treasury and the IRS issued proposed regulations addressing several SECURE 2.0 Act provisions relating to catch-up contributions, which are additional contributions under a 401(k) or similar workplace retirement plan that generally are allowed with respect to employees who are age 50 or older. This includes proposed rules related to a provision requiring that catch-up contributions made by certain higher-income participants be designated as after-tax Roth contributions. The proposed regulations provide guidance for plan administrators to implement and comply with the new Roth catch-up rule and reflect comments received in response to Notice 2023-62, issued in August 2023.

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7.  Treasury, IRS issue final rules identifying partnership related-party “basis shifting” transactions as transactions of interest

The Department of the Treasury and the IRS issued final regulations identifying certain partnership related-party “basis shifting” transactions as transactions of interest subject to the rules for reportable transactions. They apply to related partners and partnerships that participated in the identified transactions through distributions of partnership property or the transfer of an interest in the partnership by a related partner to a related transferee. The affected taxpayers and their material advisors are subject to the disclosure requirements for reportable transactions.

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8.  Upcoming webinars for tax professionals

The IRS offers the upcoming live webinars to the tax pro community:

• The ABCs of Due Diligence on Jan. 14 at 2 p.m. ET. Earn up to 1CE credit (Federal Tax). Visit the webinar’s registration page for more information and to register.
• Steering Clear of Mistakes – A Review of Refundable Credits Eligibility Rules on Jan. 16 at 2 p.m. ET. Earn up to 1 CE credit (Federal Tax). Visit the webinar’s registration page for more information and to register.
• Document Upload Tool on Jan. 21 at 2 p.m. ET. Earn up to 1 CE credit (Federal Tax). Visit the webinar’s registration page for more information and to register.
• New Features for Tax Pros: Do Business Faster and Easier with IRS Online on Jan. 23 at 2 p.m. ET. Earn up to 2 CE credits (Federal Tax). Visit the webinar’s registration page for more information and to register.

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9.  Technical Guidance

Notice 2025-06 requests comments on any potential implications if the characterization rules currently contained in sections 1.861-18 and 1.861-19, as amended and added, respectively, by Treasury Decision 10022, were to apply to all provisions of the Internal Revenue Code, including the need for additional guidance, and seeks specific comments on the possible impacts and guidance that may be necessary with respect to certain identified provisions.

Revenue Procedure 2025-10 modifies and supersedes Revenue Procedure 85-18, 1985-1 CB 518; it clarifies the provisions of Rev. Proc. 85-18 with respect to the definition of employee, the section 530 requirement for the filing of required returns, and the reasonable basis safe harbor rules.

Revenue Procedure 2025-11 provides the process under section 48E(h) of the Internal Revenue Code to apply for an allocation of Capacity Limitation as part of the Clean Electricity Low-income Communities Bonus Credit Amount Program for 2025 and subsequent years.

Revenue Ruling 2025-3 addresses the application of section 530 of the Revenue Act of 1978 (section 530), section 3509 rates, and the requirements to issue a Notice of Employment Tax Determination Under IRC section 7436 (section 7436 Notice) in several distinct factual situations.