Notice 2025-03 provides transitional relief under provisions of the Internal Revenue Code with respect to the reporting of information and backup withholding on digital assets for digital asset brokers providing trading front-end services.

Notice 2025-03will be published in Internal Revenue Bulletin 2025-4, on Jan. 21,2025.

Inside This Issue

1. IRS announces special payments going this month to 1 million taxpayers who did not claim 2021 Recovery Rebate Credit
2. Get ready now to file 2025 taxes
3. Taxpayers can now submit Form 8898 digitally
4. e-Filing requirement for Information Returns
5. Treasury and IRS propose regulations to update rules for tax professionals who can practice before the IRS
6. ETAAC is accepting membership applications through Jan. 31
7. IRS needs your feedback on Form 6765 draft instructions
8. Tax pros: New continuing education seminars available on IRS Nationwide Tax Forum Online
9. News from the Justice Department’s Tax Division
10. Technical Guidance

1.  IRS announces special payments going this month to 1 million taxpayers who did not claim 2021 Recovery Rebate Credit

The Internal Revenue Service will issue automatic payments later this month to eligible people who did not claim the Recovery Rebate Credit on their 2021 tax returns. The IRS announced the special step Friday after reviewing internal data showing many eligible taxpayers who filed a return but did not claim the credit. The Recovery Rebate Credit is a refundable credit for individuals who did not receive one or more Economic Impact Payments (EIP), also known as stimulus payments.

No action is needed for eligible taxpayers to receive these payments, which will go out automatically in December and should arrive in most cases by late January 2025. The payments will be automatically direct deposited or sent by paper check; eligible taxpayers will also receive a separate letter notifying them of the payment.

Back to top

2.  Get ready now to file 2025 taxes

Tax pros: Remind your clients to get ready now to file their taxes in 2025. Visit the Get Ready page to view key information such as steps to make tax filing easier, 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, avoiding refund delays, understanding refund timing and more.

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3.  Taxpayers can now submit Form 8898 digitally

Effective Dec. 8, taxpayers can submit IRS Form 8898, Statement for Individuals Who Begin or End Bona Fide Residence in a U.S. Territory using the IRS Digital Mobile Application Format (DMAF). Many of these submissions originate from outside the 50 states and mailing these forms to ensure timely receipt may require extra effort. Using this format will provide taxpayers with:

• Paperless option to file Form 8898,
• Faster and easier submission process,
• Guaranteed timely receipt and
• Reduced burden.

To access this form, filers can go to IRS.gov and:

• Select Find Forms & Instructions.
• Select Mobile–friendly forms from the list on the left sidebar.
• Select F8898 from the menu.

There is no need to submit a paper copy to the IRS, and the filer can download or print a copy of what was submitted.

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4.  e-Filing requirement for Information Returns

The IRS reminds taxpayers of the filing requirements for information returns that must be filed on or before Jan. 1. Electronic submission is required for those who are filing 10 or more information returns. This includes Forms W-2, e-filed with the Social Security Administration. In addition, taxpayers may prepare to file information returns electronically by applying for a Transmitter Control Code (TCC) from the IRS as soon as possible, as it may take up to 45 days for processing. (Note: A TCC is not required to electronically file Form W-2, although registration with Business Services Online at SSA.gov is required. Form 8809, Application for Extension of Time to File Information Returns can be used to request an extension if a taxpayer needs more time to file information returns. E-Filing options can be found at IRS.gov/inforeturn. 

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5.  Treasury and IRS propose regulations to update rules for tax professionals who can practice before the IRS

The Department of the Treasury and the Internal Revenue Service today issued proposed regulations to update the rules for certain tax professionals who can practice before the IRS; these rules are contained in Treasury Department Circular 230.

The IRS Office of Professional Responsibility generally has responsibility for matters related to practitioner conduct, and exclusive responsibility for discipline, including disciplinary proceedings and sanctions. The proposed regulations, if finalized, would amend Circular 230 in various ways to account for changes in the law and the evolving nature of tax practice. Among other changes, the proposed regulations would remove or update the parts of Circular 230 related to registered tax return preparers and tax return preparation, as well as contingent fees to reflect changes in the law since the prior amendments to Circular 230 in 2011 and 2014. The proposed regulations would also revise or eliminate other provisions that are out of date.

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6.  ETAAC is accepting membership applications through Jan. 31

The IRS is seeking qualified applicants for nomination to the Electronic Tax Administration Advisory Committee (ETAAC), an organized public forum for discussion of issues in electronic tax administration, such as prevention of identity theft and refund fraud. New members will serve three-year terms beginning in September 2025. Applications will be accepted through Jan. 31. For more information about ETAAC, the application process and qualification criteria, email publicliaison@irs.gov.

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7.  IRS needs your feedback on Form 6765 draft instructions

Draft instructions for Form 6765, Credit for Increasing Research Activities, commonly referred to as the research credit, were released by the IRS today. The IRS is looking for feedback on the draft instructions, particularly on the Section G reporting for controlled groups, ASC 730 Directive, Section G business component detail and statistical sampling.

Feedback regarding the tax year 2024 draft or final instructions can be submitted to lbi.rt.team@irs.gov through June 30, 2025, using the subject line: “Instructions for Form 6765.” All responses will be considered to ensure the tax year 2025 (processing year 2026) instructions provide clear and updated guidance on completing the form. The IRS remains committed to engaging with stakeholders in preparation for tax year 2025 (processing year 2026).

For additional information, visit Form 6765, Credit for Increasing Research Activities on IRS.gov to learn more.

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8.  Tax pros: New continuing education seminars available on IRS Nationwide Tax Forum Online

The IRS encourages tax professionals to register for the IRS Nationwide Tax Forum Online to get access to 18 seminars recorded at the 2024 IRS Nationwide Tax Forum. The Nationwide Tax Forum Online offers tax professionals a convenient way to stay informed about current legislation, IRS procedures and key topics for the upcoming tax season.

Each seminar features a 50-minute interactive video presentation with synchronized slides, downloadable materials and complete transcripts. Courses can be taken for continuing education (CE) credit for a fee of $29, or they can be reviewed for free (no CE credit).

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9.  News from the Justice Department’s Tax Division

Monica McGinley was charged with tax fraud and theft of government funds in an indictment delivered by a federal grand jury in Greenbelt, Md. According to the indictment, McGinley assisted with the preparation and filing false tax returns, so that she may receive large refunds from the IRS to which she was not entitled from 2014 to 2024. McGinley allegedly claimed nonexistent payments or withholdings and requested nearly $12 million in refunds. The IRS issued refunds to McGinley totaling over $1.5 million. In one example, she allegedly received a U.S. Treasury check for over $1 million. McGinley faces a maximum penalty of 10 years in prison for the theft of government funds charge and a maximum penalty of three years in prison for each of the six counts of aiding and assisting in the preparation and presentation of false tax returns. IRS Criminal Investigation is investigating the case.

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10.  Technical Guidance

Announcement 2025-02 provides that the Treasury Department and the IRS anticipate that certain portions of future regulations finalizing the proposed regulations will apply beginning in the 2026 distribution calendar year.

Notice 2025-01 sets forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for November 2024 used under section 417(e)(3)(D), the 24-month average segment rates applicable for December 2024, and the 30-year Treasury rates, as reflected by the application of section 430(h)(2)(C)(iv).

Notice 2025-04 announces that the Department of the Treasury and the Internal Revenue Service intend to issue proposed regulations that, for purposes of applying section 482, provide a new simplified and streamlined approach ("SSA") for pricing certain controlled transactions involving baseline marketing and distribution activities.

Notice 2025-05 provides the optional 2025 standard mileage rates for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes.

Revenue Procedure 2025-08 modifies section 7 of Revenue Procedure 2024-23, 2024-23 I.R.B. 1334, to modify the procedures under section 446 of the Internal Revenue Code and section1.446-1(e) of the Income Tax Regulations for obtaining automatic consent of the Commissioner of Internal Revenue to change methods of accounting for research or experimental expenditures paid or incurred in taxable years beginning after Dec. 31, 2021.

Revenue Ruling 2025-01 provides various prescribed rates for federal income tax purposes including the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate, and the adjusted federal long-term tax-exempt rate. These rates are determined as prescribed by section 1274.

WASHINGTON - As part of continuing efforts to help taxpayers, the Internal Revenue Service today announced plans to issue automatic payments later this month to eligible people who did not claim the Recovery Rebate Credit on their 2021 tax returns.  

The IRS announced the special step after reviewing internal data showing many eligible taxpayers who filed a return but did not claim the credit. The Recovery Rebate Credit is a refundable credit for individuals who did not receive one or more Economic Impact Payments (EIP), also known as stimulus payments. 

No action is needed for eligible taxpayers to receive these payments, which will go out automatically in December and should arrive in most cases by late January 2025. The payments will be automatically direct deposited or sent by paper check; eligible taxpayers will also receive a separate letter notifying them of the payment. 

“The IRS continues to work hard to make improvements and help taxpayers,” said IRS Commissioner Danny Werfel. “These payments are an example of our commitment to go the extra mile for taxpayers. Looking at our internal data, we realized that one million taxpayers overlooked claiming this complex credit when they were actually eligible. To minimize headaches and get this money to eligible taxpayers, we’re making these payments automatic, meaning these people will not be required to go through the extensive process of filing an amended return to receive it.”  

The payments vary depending on several factors, but the maximum payment is $1,400 per individual. The estimated amount of payments going out will be about $2.4 billion. 

The IRS also reminded taxpayers who haven’t filed 2021 tax returns they might be eligible as well, but they face an April 15, 2025, deadline to file their returns to claim the credit and any other refund they might be owed.  

Most eligible taxpayers already claimed the credit 

Most taxpayers eligible for EIPs have already received their EIP or Recovery Rebate Credit. 

These December payments for the 2021 Recovery Rebate Credit are only going to taxpayers where IRS data demonstrates a taxpayer qualifies for the credit. Qualified taxpayers are those who filed a 2021 tax return, but where the data field for the Recovery Rebate Credit was left blank or was filled out as $0 when the taxpayer was actually eligible for the credit.  

How automatic payments work 

Taxpayers who qualify but did not claim any portion of the credit on their 2021 tax return should receive these payments by late January 2025. The payment will be sent to the bank account listed on the taxpayer’s 2023 tax return or to the address of record.  

An IRS letter will be sent to the taxpayer receiving these 2021 Recovery Rebate Credit payments. If the taxpayer closed their bank account since filing their 2023 tax return, taxpayers do not need to take any action. The bank will return the payment to the IRS and the refund will be reissued to the address of record. 

For questions regarding eligibility and how the payment was calculated, see 2021 Recovery Rebate Credit Questions and Answers.  

Taxpayers who didn’t file a 2021 tax return may be eligible to claim the credit if they file a return  

The IRS reminds taxpayers who have not yet filed their 2021 tax returns that they may be eligible for a refund if they file and claim the Recovery Rebate Credit by the April 15, 2025, deadline. 

Eligible taxpayers who did not file must file a tax return to claim a Recovery Rebate Credit, even if their income from a job, business or other source was minimal or non-existent. 

Additional information about automatic payments; filing 2021 tax returns 

To calculate the amount of Recovery Rebate Credit, taxpayers may access their IRS Online Account to determine the amount they received in Economic Impact Payment(s). See FAQ G2 2021 Recovery Rebate Credit — Topic G: Finding the Third Economic Impact Payment Amount to Calculate the 2021 Recovery Rebate Credit and 2021 Recovery Rebate Credit — Topic A: General Information. 

Any Recovery Rebate Credit received does not count as income when determining eligibility for federal benefits such as Supplemental Security Income (SSI), Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF) and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC).  

As the 2025 tax filing season approaches, the IRS is committed to helping taxpayers understand and claim the credits and deductions for which they are eligible including Coronavirus tax relief. Many taxpayers are unaware of tax credits and deductions for which they are eligible or face other barriers keeping them from claiming them. The IRS will be reminding taxpayers about these credits, including the Earned Income Tax Credit, during the 2025 filing season. 

WASHINGTON — The Department of the Treasury and the Internal Revenue Service today issued proposed regulations to update the rules for certain tax professionals who can practice before the IRS; these rules are contained in Treasury Department Circular 230. 

The IRS Office of Professional Responsibility generally has responsibility for matters related to practitioner conduct, and exclusive responsibility for discipline, including disciplinary proceedings and sanctions. The proposed regulations, if finalized, would amend Circular 230 in various ways to account for changes in the law and the evolving nature of tax practice. 

Among other changes, the proposed regulations would remove or update the parts of Circular 230 related to registered tax return preparers and tax return preparation, as well as contingent fees to reflect changes in the law since the prior amendments to Circular 230 in 2011 and 2014. The proposed regulations would also revise or eliminate other provisions that are out of date. 

Additionally, the proposed regulations would incorporate new provisions that better align Circular 230 with the current practice environment, such as requiring that practitioners maintain technological competency as part of their practice before the IRS. The proposed regulations would also clarify some provisions, such as confirming that OPR retains jurisdiction over practitioners who have been suspended or disbarred from practice. 

Finally, the proposed regulations would provide rules related to appraisers, including the standards for disqualification.

Issue Number:  2024-51

Inside This Issue

1. IRS announces special payments going this month to 1 million taxpayers who did not claim 2021 Recovery Rebate Credit
2. Get ready now to file 2025 taxes
3. Taxpayers can now submit Form 8898 digitally
4. e-Filing requirement for Information Returns
5. Treasury and IRS propose regulations to update rules for tax professionals who can practice before the IRS
6. ETAAC is accepting membership applications through Jan. 31
7. IRS needs your feedback on Form 6765 draft instructions
8. Tax pros: New continuing education seminars available on IRS Nationwide Tax Forum Online
9. News from the Justice Department’s Tax Division
10. Technical Guidance

1.  IRS announces special payments going this month to 1 million taxpayers who did not claim 2021 Recovery Rebate Credit

The Internal Revenue Service will issue automatic payments later this month to eligible people who did not claim the Recovery Rebate Credit on their 2021 tax returns. The IRS announced the special step Friday after reviewing internal data showing many eligible taxpayers who filed a return but did not claim the credit. The Recovery Rebate Credit is a refundable credit for individuals who did not receive one or more Economic Impact Payments (EIP), also known as stimulus payments.

No action is needed for eligible taxpayers to receive these payments, which will go out automatically in December and should arrive in most cases by late January 2025. The payments will be automatically direct deposited or sent by paper check; eligible taxpayers will also receive a separate letter notifying them of the payment. 

Back to top

2.  Get ready now to file 2025 taxes

Tax pros: Remind your clients to get ready now to file their taxes in 2025. Visit the Get Ready page to view key information such as steps to make tax filing easier, 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, avoiding refund delays, understanding refund timing and more.

Back to top

3.  Taxpayers can now submit Form 8898 digitally

Effective Dec. 8, taxpayers can submit IRS Form 8898, Statement for Individuals Who Begin or End Bona Fide Residence in a U.S. Territory using the IRS Digital Mobile Application Format (DMAF). Many of these submissions originate from outside the 50 states and mailing these forms to ensure timely receipt may require extra effort. Using this format will provide taxpayers with:

• Paperless option to file Form 8898,
• Faster and easier submission process,
• Guaranteed timely receipt and
• Reduced burden.

To access this form, filers can go to IRS.gov and:

• Select Find Forms & Instructions.
• Select Mobile–friendly forms from the list on the left sidebar.
• Select F8898 from the menu.

There is no need to submit a paper copy to the IRS, and the filer can download or print a copy of what was submitted.

Back to top

4.  e-Filing requirement for Information Returns

The IRS reminds taxpayers of the filing requirements for information returns that must be filed on or before Jan. 1. Electronic submission is required for those who are filing 10 or more information returns. This includes Forms W-2, e-filed with the Social Security Administration. In addition, taxpayers may prepare to file information returns electronically by applying for a Transmitter Control Code (TCC) from the IRS as soon as possible, as it may take up to 45 days for processing. (Note: A TCC is not required to electronically file Form W-2, although registration with Business Services Online at SSA.gov is required. Form 8809, Application for Extension of Time to File Information Returns can be used to request an extension if a taxpayer needs more time to file information returns. E-Filing options can be found at IRS.gov/inforeturn. 

Back to top

5.  Treasury and IRS propose regulations to update rules for tax professionals who can practice before the IRS

The Department of the Treasury and the Internal Revenue Service today issued proposed regulations to update the rules for certain tax professionals who can practice before the IRS; these rules are contained in Treasury Department Circular 230.

The IRS Office of Professional Responsibility generally has responsibility for matters related to practitioner conduct, and exclusive responsibility for discipline, including disciplinary proceedings and sanctions. The proposed regulations, if finalized, would amend Circular 230 in various ways to account for changes in the law and the evolving nature of tax practice. Among other changes, the proposed regulations would remove or update the parts of Circular 230 related to registered tax return preparers and tax return preparation, as well as contingent fees to reflect changes in the law since the prior amendments to Circular 230 in 2011 and 2014. The proposed regulations would also revise or eliminate other provisions that are out of date.

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6.  ETAAC is accepting membership applications through Jan. 31

The IRS is seeking qualified applicants for nomination to the Electronic Tax Administration Advisory Committee (ETAAC), an organized public forum for discussion of issues in electronic tax administration, such as prevention of identity theft and refund fraud. New members will serve three-year terms beginning in September 2025. Applications will be accepted through Jan. 31. For more information about ETAAC, the application process and qualification criteria, email publicliaison@irs.gov.

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7.  IRS needs your feedback on Form 6765 draft instructions

Draft instructions for Form 6765, Credit for Increasing Research Activities, commonly referred to as the research credit, were released by the IRS today. The IRS is looking for feedback on the draft instructions, particularly on the Section G reporting for controlled groups, ASC 730 Directive, Section G business component detail and statistical sampling.

Feedback regarding the tax year 2024 draft or final instructions can be submitted to lbi.rt.team@irs.gov through June 30, 2025, using the subject line: “Instructions for Form 6765.” All responses will be considered to ensure the tax year 2025 (processing year 2026) instructions provide clear and updated guidance on completing the form. The IRS remains committed to engaging with stakeholders in preparation for tax year 2025 (processing year 2026).

For additional information, visit Form 6765, Credit for Increasing Research Activities on IRS.gov to learn more.

Back to top

8.  Tax pros: New continuing education seminars available on IRS Nationwide Tax Forum Online

The IRS encourages tax professionals to register for the IRS Nationwide Tax Forum Online to get access to 18 seminars recorded at the 2024 IRS Nationwide Tax Forum. The Nationwide Tax Forum Online offers tax professionals a convenient way to stay informed about current legislation, IRS procedures and key topics for the upcoming tax season.

Each seminar features a 50-minute interactive video presentation with synchronized slides, downloadable materials and complete transcripts. Courses can be taken for continuing education (CE) credit for a fee of $29, or they can be reviewed for free (no CE credit). 

Back to top

9.  News from the Justice Department’s Tax Division

Monica McGinley was charged with tax fraud and theft of government funds in an indictment delivered by a federal grand jury in Greenbelt, Md. According to the indictment, McGinley assisted with the preparation and filing false tax returns, so that she may receive large refunds from the IRS to which she was not entitled from 2014 to 2024. McGinley allegedly claimed nonexistent payments or withholdings and requested nearly $12 million in refunds. The IRS issued refunds to McGinley totaling over $1.5 million. In one example, she allegedly received a U.S. Treasury check for over $1 million. McGinley faces a maximum penalty of 10 years in prison for the theft of government funds charge and a maximum penalty of three years in prison for each of the six counts of aiding and assisting in the preparation and presentation of false tax returns. IRS Criminal Investigation is investigating the case.

Back to top

10.  Technical Guidance

Announcement 2025-02 provides that the Treasury Department and the IRS anticipate that certain portions of future regulations finalizing the proposed regulations will apply beginning in the 2026 distribution calendar year.

Notice 2025-01 sets forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for November 2024 used under section 417(e)(3)(D), the 24-month average segment rates applicable for December 2024, and the 30-year Treasury rates, as reflected by the application of section 430(h)(2)(C)(iv).

Notice 2025-04 announces that the Department of the Treasury and the Internal Revenue Service intend to issue proposed regulations that, for purposes of applying section 482, provide a new simplified and streamlined approach ("SSA") for pricing certain controlled transactions involving baseline marketing and distribution activities.

Notice 2025-05 provides the optional 2025 standard mileage rates for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes.

Revenue Procedure 2025-08 modifies section 7 of Revenue Procedure 2024-23, 2024-23 I.R.B. 1334, to modify the procedures under section 446 of the Internal Revenue Code and section1.446-1(e) of the Income Tax Regulations for obtaining automatic consent of the Commissioner of Internal Revenue to change methods of accounting for research or experimental expenditures paid or incurred in taxable years beginning after Dec. 31, 2021.

Revenue Ruling 2025-01 provides various prescribed rates for federal income tax purposes including the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate, and the adjusted federal long-term tax-exempt rate. These rates are determined as prescribed by section 1274.

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WASHINGTON — The Internal Revenue Service today announced the release of draft Instructions for Form 6765, Credit for Increasing Research Activities, also known as the research credit. 

The IRS is seeking feedback regarding the draft instructions but specifically about Section G reporting for controlled groups, ASC 730 Directive, Section G business component detail and statistical sampling. 

Feedback regarding the tax year 2024 draft or final instructions can be submitted to lbi.rt.team@irs.gov through June 30, 2025, using the subject line: “Instructions for Form 6765.” All feedback will be considered to ensure the tax year 2025 (processing year 2026) instructions provide clear and updated guidance on completing the form. The IRS remains committed to engaging with stakeholders in preparation for tax year 2025 (processing year 2026). 

These instructions will be used in conjunction with revised draft Form 6765 released on Dec. 12, 2024, which includes a new Section E seeking other business information, a new Section F summarizing the qualified research expenses and a new Section G for reporting business component details. The IRS encourages taxpayers and their representatives to review and consider using the new format when preparing their tax year 2024 return. 

The IRS anticipates publishing the final tax year 2024 Form 6765 and Instructions by the end of January 2025. 

Section G will be optional for all filers for tax year 2024 (processing year 2025). For tax year 2025 (processing year 2026) and beyond, Section G will be mandatory for all filers with optional reporting for: 

• Qualified Small Business (QSB) taxpayers, defined under section 41(h)(1) & (2) of the Internal Revenue Code who check the box to claim a reduced payroll tax credit; or

• Taxpayers with total qualified research expenses (QREs) equal to or less than $1.5 million, determined at the control group level and equal to or less than $50 million of gross receipts, as determined under section 448(c)(3) (without regard to subparagraph (A) thereof), claiming a research credit on an original filed return. 

The Form 6765 improvement effort was informed by stakeholder feedback. The IRS released an early preview of Form 6765 changes on Sept. 15, 2023, and invited comments from interested parties on the proposed changes. In response, the IRS received numerous helpful comments from various external stakeholders and revised the form as discussed in the prior news release on June 21, 2024.  

Annually, the IRS receives thousands of returns claiming the research credit that involve hundreds of millions of dollars. There are a substantial number of cases examining research credit issues, which consume significant resources of both taxpayers and the IRS. Improvements to Form 6765 are intended to make tax reporting more consistent, improve the information received for tax administration and build an ongoing effort to manage resources in a more effective and efficient way. 

For more information visit IRS.gov to learn more about Form 6765

Notice 2025-05 provides the optional 2025 standard mileage rates for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes.  This notice also provides the amount taxpayers must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that may be used in computing the allowance under a fixed and variable rate plan.  Additionally, this notice provides the maximum fair market value of employer-provided automobiles first made available to employees for personal use in calendar year 2025 for which employers may use the fleet-average valuation rule in § 1.61-21(d)(5)(v) or the vehicle cents-per-mile valuation rule in § 1.61-21(e). 

Notice 2025-05 will be in IRB: 2025-4, dated January 21, 2025.

WASHINGTON — The Internal Revenue Service today announced that the optional standard mileage rate for automobiles driven for business will increase by 3 cents in 2025, while the mileage rates for vehicles used for other purposes will remain unchanged from 2024. 

Optional standard milage rates are used to calculate the deductible costs of operating vehicles for business, charitable and medical purposes, as well as for active-duty members of the Armed Forces who are moving. 

Beginning Jan. 1, 2025, the standard mileage rates for the use of a car, van, pickup or panel truck will be: 

• 70 cents per mile driven for business use, up 3 cents from 2024.
• 21 cents per mile driven for medical purposes, the same as in 2024.
• 21 cents per mile driven for moving purposes for qualified active-duty members of the Armed Forces, unchanged from last year.
• 14 cents per mile driven in service of charitable organizations, equal to the rate in 2024. 

The rates apply to fully-electric and hybrid automobiles, as well as gasoline and diesel-powered vehicles. 

While the mileage rate for charitable use is set by statute, the mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes, meanwhile, is based on only the variable costs from the annual study. 

Under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. And only taxpayers who are members of the military on active duty may claim a deduction for moving expenses incurred while relocating under orders to a permanent change of station. 

Use of the standard mileage rates is optional. Taxpayers may instead choose to calculate the actual costs of using their vehicle. 

Taxpayers using the standard mileage rate for a vehicle they own and use for business must choose to use the rate in the first year the automobile is available for business use. Then, in later years, they can choose to use the standard mileage rate or actual expenses. 

For a leased vehicle, taxpayers using the standard mileage rate must employ that method for the entire lease period, including renewals. 

Notice 2025-5 contains the optional 2025 standard mileage rates, as well as the maximum automobile cost used to calculate mileage reimbursement allowances under a fixed-and variable rate (FAVR) plan. The notice also provides the maximum fair market value of employer-provided automobiles first made available to employees for personal use in 2025 for which employers may calculate mileage allowances using a cents-per-mile valuation rule or the fleet-average-valuation rule

WASHINGTON — With the 2025 filing season quickly approaching, the Internal Revenue Service  encouraged taxpayers to take key steps now to prepare for filing their 2024 federal income tax returns next year. 

The IRS continues to improve taxpayer services to help people prepare for tax season with more digital tools and options available. The IRS encourages taxpayers to sign up now for an IRS Online Account to make tax season easier and help safeguard their tax information. 

There are a number of things taxpayers can do to get ready as the end of 2024 nears and the start of the 2025 tax season approaches. 

The IRS’s Get Readypage on IRS.gov offers practical tips and resources to help taxpayers prepare. It highlights key updates and important steps for taxpayers to consider to make tax filing easier in 2025. 

This reminder is part of a series designed to help taxpayers “Get Ready” for the upcoming filing season. Taking action now can reduce stress and ensure a smoother filing process next year. 

Do more with an IRS Online Account 

Individuals can create or access their IRS Online Account at Online account for individuals. With an IRS Online Account, they can:

• View key details from their most recent tax return, such as adjusted gross income.
• Request an Identity Protection PIN.
• Get account transcripts to include wage and income records.
• Sign tax forms like powers of attorney or tax information authorizations.
• View and edit language preferences and alternative media.
• Receive and view over 200 IRS electronic notices.
• View, make and cancel payments.
• Set up or change payment plans and check their balance.

 

Get an Identity Protection Personal Identification Number (IP PIN) 

An IP PIN is a six-digit number that prevents someone else from filing a federal tax return using an individual’s Social Security number or Individual Taxpayer Identification Number. It’s a vital tool for ensuring the safety of taxpayers’ personal and financial information. 

New for the 2025 filing season, the IRS will accept Forms 1040, 1040-NR and 1040-SS even if a dependent has already been claimed on a previously filed return, as long as the primary taxpayer on the second return includes a valid IP PIN. This change will reduce the time for the agency to receive the tax return and accelerate the issuance of tax refunds for those with duplicate dependent returns. 

The best way to sign up for an IP PIN is through the IRS Online Account. If an individual is unable to create an Online Account, alternative methods are available, such as in-person authentication at a Taxpayer Assistance Center. More information is available on how to sign up at Get an identity protection PIN (IP PIN).  

Deadline for 2024 last quarterly estimated payment is Jan. 15, 2025 

Taxpayers with non-wage income—such as unemployment benefits, self-employment income, annuity payments or earnings from digital assets—may need to make estimated or additional tax payments. The Tax Withholding Estimator on IRS.gov can help wage earners determine if they need to make an additional payment to avoid an unexpected tax bill when filing their return. 

1099-K reporting changes 

Taxpayers who received more than $5,000 in payments for goods and services through an online marketplace or payment app in 2024 should expect to receive a Form 1099-K in January 2025. A copy of this form will be sent to the IRS as well.

Although the IRS is taking a phased in approach to implementation of the Form 1099-K reporting threshold, there have been no changes to the taxability of income. All income, including proceeds from part-time work, side jobs or the sale of goods and services is taxable. Taxpayers must report all income on their tax return unless it's excluded by law, whether they receive a Form 1099-K or not. The law doesn’t allow taxpayers to avoid taxes on income earned just because they didn’t get a form reporting the payments received. 

It is important for taxpayers to understand why they received a Form 1099-K and how to use it along with their other records to figure and report the correct amount of income on their tax return. It is also important for taxpayers to know what to do if they received a Form 1099-K but shouldn't have. In either situation, good recordkeeping is key. Having good records will help make tax filing easier. 

Prepare to include digital assets on taxes in 2025 

Just like previous filing years, taxpayers must report all digital asset-related income when they file their 2024 federal income tax return. A digital asset is property that is stored electronically and can be bought, sold, owned, transferred or traded. Examples include convertible virtual currencies and cryptocurrencies, stablecoins and non-fungible tokens (NFTs).   

If a taxpayer had digital asset transactions last year, they should be sure to keep records that prove their purchase, receipt, sale, exchange or any other disposition of the digital assets and that includes the fair market value, as measured in U.S. dollars of all digital assets received as income or as a payment in the ordinary course of a trade or business.  

When filing 2024 federal income tax returns, taxpayers will be asked to answer “Yes” or “No” to the following question: 

“At any time during the tax year, did you:

(a) receive (as a reward, award or payment for property or services); or   (b) sell, exchange or otherwise dispose of a digital asset (or a financial interest in a digital asset)?” 

Taxpayers should be prepared to answer the question by reviewing the digital assets landing page and FAQ available on IRS.gov. In addition to checking the "Yes" box, taxpayers must report all income related to their digital asset transactions. Information on how to report digital asset transactions, including calculating capital gain or loss, determining basis and reporting the income on the correct form can also be found on the digital assets landing page. 

Understand refund timing and how to avoid delays 

Several factors can influence the timing of a refund after the IRS receives a tax return. While the IRS issues most refunds in less than 21 days, taxpayers are advised not to depend on receiving a 2024 federal tax refund by a specific date for major purchases or bill payments. Some returns may require additional review and take longer to process if there are possible errors, missing information, or indications of identity theft or fraud. 

Additionally, under the PATH Act, the IRS cannot issue refunds for tax returns claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) before mid-February. The IRS must hold the entire refund—not just the portion associated with these credits—until the review is complete. 

Gather and organize 2024 tax documents 

To make tax time easier, taxpayers should establish an effective record-keeping system, either electronic or paper, to organize all important documents in one place. This includes year-end income forms such as Forms W-2 from employers, Forms 1099 from banks or other payers, Forms 1099-K from third-party payment networks, Forms 1099-NEC for nonemployee compensation, Forms 1099-MISC for miscellaneous income, Forms 1099-INT for interest income and records of all digital asset transactions. 

Having all necessary documentation ensures taxpayers can file an accurate return and reduces the likelihood of processing delays or refund issues. 

Use direct deposit for a faster refund 

Filing electronically and selecting direct deposit remains the fastest and safest way for taxpayers to receive their 2024 tax refunds. Direct deposit ensures quicker access to refunds compared to receiving a paper check. 

For those without a bank account, resources are available to help. Individuals can learn how to open an account at an FDIC-insured bank or use the national Credit Union Locator tool. Veterans can explore the Veterans Benefits Banking Program for financial services at participating banks. 

Tax refunds can also be deposited onto prepaid debit cards or through mobile payment apps, provided they have routing and account numbers. Taxpayers should confirm with the mobile app provider or financial institution which numbers to use when completing their tax return. 

Free filing options 

Seventy percent of all taxpayers can use free brand name tax software to prepare and file their federal income tax return electronically using IRS Free File. All taxpayers, regardless of income level, can also use IRS Free File Fillable Forms. 

Taxpayers living in participating states with relatively simple tax returns can use Direct File and file their tax return online directly with the IRS. The Direct File program is another option for taxpayers to file their taxes. Taxpayers can see if they are eligible for Direct File. 

Older adults, members of the military and many other taxpayers—depending on their income—may also qualify for free tax return preparation and electronic filing by IRS-trained volunteers through the Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) programs.

Revenue Procedure 2025-08 modifies section 7 of Rev. Proc. 2024-23, 2024-23 I.R.B. 1334, to modify the procedures under section 446 of the Internal Revenue Code and §1.446-1(e) of the Income Tax Regulations for obtaining automatic consent of the Commissioner of Internal Revenue to change methods of accounting for research or experimental expenditures paid or incurred in taxable years beginning after December 31, 2021. The attached revenue procedure expands the waiver of the eligibility rules in section 5.01(1)(d) and (f) of Rev. Proc. 2015-13 to accounting method changes described in section 7.01 of Rev. Proc. 2024-23 that are made for any taxable year beginning in 2022, 2023, or 2024. This revenue procedure also permits a taxpayer to make a change under section 7.01 of Rev. Proc. 2024-23 regardless of whether the taxpayer made a change for the same item for any other taxable year beginning in 2022, 2023, or 2024. The attached revenue procedure will be effective for Forms 3115, Application for Change in Accounting Method, filed on or after the date this revenue procedure is released to the public. 

Revenue Procedure 2025-08 will be in IRB:  2025-4, dated January 21, 2025.