The immediate deadline is not nationwide. It applies primarily to residents, businesses and other affected taxpayers covered by the IRS disaster-relief rules for the Southeast Georgia event, which began April 18, 2026. The IRS issued notice GA-2026-03 on May 6 and corrected it on May 18.

What the August 20 deadline covers

Eligible taxpayers generally may postpone federal individual, corporate, estate and trust income-tax returns; partnership and S corporation returns; estate, gift and generation-skipping transfer tax returns; annual information returns for tax-exempt organizations; and employment and certain excise-tax returns with original or extended due dates on or after April 18 and before August 20.

The relief also covers estimated income-tax payments originally due on or after April 18. The IRS says affected taxpayers will not face estimated-tax penalties if those installments are paid by August 20.

The relief is not a blanket extension for every tax-related task. Unless specifically listed in the applicable IRS guidance, it does not apply to information returns in the W-2, 1094, 1095, 1097, 1098 or 1099 series, or to Forms 1042-S, 3921, 3922 and 8027. Employment- and excise-tax deposits generally were not postponed. However, penalties on deposits due on or after April 18 and before May 4 were to be abated if the deposits were paid by May 4.

Who may qualify

The IRS automatically identifies taxpayers who live in the covered counties or whose businesses have their principal place of business there. Relief can also apply to taxpayers outside the disaster area when necessary records are located there, as well as qualifying relief workers and certain people who were visiting the area and were killed or injured as a result of the disaster.

Tax practitioners whose records are needed for affected filings may also request relief. Taxpayers who believe they qualify but were not automatically identified should contact IRS Special Services at 866-562-5227.

How the refund rule changed

The broader change comes from the Disaster Related Extension of Deadlines Act, which became Public Law 119-64 on December 26, 2025. Congress.gov records show that the law was signed by the president that day.

The law amended the tax code so that a period disregarded because of a federally declared disaster is treated as an extension when calculating the limitation period for a refund or credit claim. In practical terms, that can preserve additional time for an eligible taxpayer to seek money owed by the IRS when a disaster-related postponement affected the normal refund deadline.

That is different from the IRS postponement itself. The IRS notice moves the date to file a return, pay tax or complete another covered act. Public Law 119-64 addresses a separate calculation: how much time remains to claim a refund or credit. The law does not guarantee a refund and does not make every disaster-related deadline longer. Its refund-period change applies to claims filed after enactment.

What taxpayers should do now

People relying on the Georgia relief should review each federal return, payment and estimated-tax installment due between April 18 and August 20, then file or pay by August 20. They should save the IRS notice, proof that their residence, business or necessary records were in the disaster area, filing confirmations and payment records.

If the IRS sends a penalty notice for a covered filing or payment deadline, taxpayers should call the number on the notice and request abatement. Relief payments connected to the wildfires may require an individual tax analysis under IRS Publication 525, so taxpayers should not assume automatically that those payments are taxable or nontaxable.

The IRS disaster-relief index continues to list the Georgia notice as GA-2026-03. Taxpayers should check the agency’s current disaster-relief index or consult a qualified tax professional before relying on the August 20 deadline. The guidance concerns federal tax obligations, not Georgia state taxes.

Sources

• IRS Southeast Georgia wildfire tax-relief notice
• Congress.gov H.R. 1491 actions

The advocate’s Fiscal Year 2027 Objectives Report to Congress describes a mixed filing season. The IRS processed nearly 139 million individual returns and issued more than 90 million current-year refunds. About 98% of individual returns were filed electronically. About 98% of refunds were delivered by direct deposit, although the report notes that the IRS’s direct-deposit and refund totals are not directly comparable because they include different tax-year populations.

Those topline figures do not capture the experience of millions of people whose returns were suspended, whose refunds could not be sent electronically or whose cases required identity-theft assistance.

Where automated processing breaks down

More than 14 million individual returns were suspended during processing for additional review. A suspension is not, by itself, a finding of fraud or identity theft. It can mean that an IRS filter flagged a return and the agency needs more information or verification before releasing a refund.

More than 1 million taxpayers did not receive refunds within the IRS’s normal processing time. Those taxpayers waited an average of about 5.5 weeks, according to the report. Other taxpayers experienced shorter delays that remained within the agency’s normal time frame.

The delays can be financially significant for households relying on a refund for rent, groceries, medical bills or other expenses. The report says taxpayers who need individualized help often struggle more than those whose returns can be completed through automated systems.

Phone access was also uneven. Across IRS telephone lines, assistors answered about 21% of 48.1 million calls during the filing season, compared with 25% of calls in the prior filing season. The report says some high-volume lines performed particularly poorly, including the Taxpayer Protection Program line used by people whose returns were suspended because of suspected identity theft.

Why paper-refund recipients faced extra obstacles

The IRS generally shifted toward electronic payments during the filing season. That approach does not work for everyone. People who are unbanked or underbanked, some older taxpayers, certain taxpayers living overseas and others without practical access to electronic payments may need a paper check.

By April 27, the IRS had issued about 4 million notices involving returns that lacked valid direct-deposit information or contained incorrect information. The notices generally directed taxpayers to use an online account to update payment information or request an exception for a paper check.

The National Taxpayer Advocate said the process was confusing because many taxpayers did not have online accounts or could not create them. The notices also did not clearly provide all the information needed to request an exception. The report says paper-refund problems caused delays of six weeks or more in some cases.

Identity-theft cases can take nearly two years

Identity-theft cases remained one of the most serious service problems. More than 500,000 cases were still pending at the end of the filing season, and the average resolution period was about 20 months.

That is an average, not a guaranteed wait for every taxpayer. But the backlog can leave affected households waiting for refunds long after ordinary processing timelines have passed.

Taxpayers who receive a CP5071-series notice or Letter 5447C should follow the instructions on the notice and use the official IRS verification service when available. The IRS says taxpayers should have the notice and the relevant Form 1040 return available. After verification, the agency says taxpayers should wait two to three weeks before checking refund status, and processing can take up to nine weeks.

What taxpayers should do

• Read every IRS notice carefully. Use the notice number and tax year to identify the required response and deadline.
• Verify identity only through official IRS tools. Do not send Social Security numbers, tax returns or bank information through unofficial websites, messages or callers claiming to represent the IRS.
• Check an IRS Online Account and Where’s My Refund? These tools provide different information. An online account can show notices and account details, while the refund tracker provides status updates.
• Consider an Identity Protection PIN. An IP PIN can help prevent someone else from filing a federal return using a taxpayer’s Social Security number or ITIN.
• Seek additional help when ordinary channels fail. Taxpayer Assistance Centers offer in-person service by appointment. The Taxpayer Advocate Service may help when a taxpayer faces financial hardship or cannot resolve a serious problem through normal IRS channels.

What happens next

The report sets out the Taxpayer Advocate Service’s priorities for fiscal year 2027, including reducing identity-theft delays, improving communication when returns are suspended and making paper-refund procedures clearer.

Those priorities are recommendations and advocacy objectives, not completed IRS reforms. The report’s central distinction is that digital-first tools can serve many taxpayers well, but they cannot replace meaningful telephone, in-person, correspondence and case-resolution options for people with unusual circumstances or limited digital access.

For taxpayers, the practical lesson is simple: a strong filing-season topline does not mean every refund is moving normally. If the IRS freezes a return or requests identity verification, the notice and official IRS tools are the starting point; if those channels fail and the delay creates serious hardship, in-person assistance or the Taxpayer Advocate Service may be the next step.

Sources

• IRS: National Taxpayer Advocate issues 2026 mid-year report to Congress
• Taxpayer Advocate Service: FY 2027 Objectives Report to Congress
• Associated Press: IRS watchdog cites long phone waits during tax season

The agreement came roughly two months before the funding deadline. It was reported as a deal between Senate leaders, not as a completed appropriations law. The next major step is Senate action, with a vote expected before the recess.

At the same time, the Internal Revenue Service is changing how some taxpayers receive relief from federal tax penalties. The agency announced July 8 that it would introduce an Automatic Exemption from Penalty during summer 2026 and phase out its First Time Abate program.

A funding deal still facing Senate action

The Senate agreement was aimed at reducing the risk of a shutdown when the current fiscal year ends on Sept. 30, 2026. A shutdown could affect federal operations and services, making the timing of the agreement significant even though the reported deal still required congressional action.

Democrats sought to extend an expiring health-insurance tax credit, putting the future of that benefit among the issues tied to the funding negotiations. Republicans and the White House emphasized spending accountability and preventing misuse of federal grants.

The reported agreement did not by itself establish that the government’s funding bills had been enacted. Senate approval remained the known next step, and the final statutory language was not identified in the report describing the deal.

What the IRS automatic relief would do

The IRS’s new process is designed to provide penalty relief without requiring an eligible taxpayer to submit a separate request. The automatic exemption would apply to failure-to-file, failure-to-pay and failure-to-deposit penalties.

Eligibility depends on a taxpayer’s filing and payment history. For annual returns, the IRS says a taxpayer must have three prior years of timely filing and payment. For quarterly returns, the requirement is 12 consecutive timely quarters.

The system applies to eligible original returns beginning with tax year 2025 and to 2026 quarterly returns. The IRS said the new approach would begin during summer 2026 while the First Time Abate program is phased out.

That distinction matters for taxpayers who have generally complied with their federal tax obligations but later face a qualifying penalty. The relief is not universal: eligibility depends on meeting the IRS requirements, including the specified record of timely filing and payment.

The budget backdrop

The funding negotiations are taking place against a federal budget outlook in which deficits and spending remain historically high. The Congressional Budget Office’s latest baseline projected a $1.9 trillion federal deficit for fiscal year 2026.

CBO projected $7.4 trillion in federal outlays and $5.6 trillion in revenues for the year. Those figures illustrate the scale of the budget decisions behind the short-term funding agreement and the continuing debate over spending controls.

CBO also projected that federal debt and deficits would remain historically high. That long-term outlook adds pressure to negotiations over spending accountability, even as lawmakers face the immediate need to keep the government funded beyond Sept. 30.

What happens next

The immediate congressional milestone is a Senate vote before the August recess. The funding agreement must move through that process before it can be treated as enacted law, and the Sept. 30 deadline remains the key date for avoiding a lapse in federal funding.

For taxpayers, the IRS’s next step is implementation of the automatic-relief system during summer 2026. Eligible annual and quarterly filers will not need to request the exemption under the agency’s announced process, but the relief will depend on satisfying the agency’s filing and payment-history rules.

For contributions made during tax year 2026, taxpayers who do not itemize deductions may be able to claim a federal deduction of up to $1,000 for qualifying cash contributions, or $2,000 for married couples filing jointly. The first tax returns affected by those gifts will generally be filed in 2027.

What changed for standard-deduction taxpayers

The new deduction is available without itemizing, but it is not a blanket deduction for every payment or recipient. The IRS says qualifying cash contributions must go to certain eligible tax-exempt organizations. Donations to individuals and individual fundraising accounts generally do not qualify.

Donors can use the IRS Tax Exempt Organization Search tool to check whether a recipient is eligible to receive tax-deductible contributions. They should also retain a bank record or written communication showing the charity’s name, the contribution date and the amount donated.

The deduction reduces taxable income; it does not mean every eligible donor will receive $1,000 or $2,000 back in reduced taxes. The actual tax effect depends on eligibility, filing status, income, tax rate and other circumstances.

Itemizers and corporations face separate limits

Taxpayers who itemize face a new 0.5% adjusted-gross-income floor beginning in 2026. Under the IRS’s 2026 guidance, only charitable contributions above that threshold may be deductible under the itemized charitable-contribution rules. Amounts below the floor cannot be deducted under that rule.

That limit is separate from the non-itemizer deduction. A gift’s treatment depends in part on whether the taxpayer uses the standard deduction or itemizes, so donors should not assume that the same contribution will receive identical treatment under both methods.

Corporations face a separate 1% floor tied to pretax profits under the new law. Nonprofits that depend on larger individual or corporate gifts will need to watch whether donors change the timing or size of their contributions.

Why donor counts and total giving could move in opposite directions

Research reported by The Associated Press projects that the new rules could encourage between 6 million and 8.7 million additional donors over time. The same research projects roughly $5.6 billion less in annual nonprofit giving because larger individual and corporate gifts could decline.

The Chronicle of Philanthropy reported a similar projection of a $5.7 billion annual net loss, based on research by Indiana University’s Lilly Family School of Philanthropy and CCS Fundraising. The figures are estimates, not IRS data or observed results from 2026.

The AP report also noted that broader economic conditions could have a much larger effect on giving in 2026 than the tax changes. The projected effects may unfold over several years and should not be presented as a confirmed decline in total giving or a guaranteed increase in donor counts this year.

For charities, the practical possibility is a wider donor base alongside pressure on average gift size, major gifts and corporate support. Nonprofits should watch both the number of donors and the total dollars raised.

What nonprofits should do now

Nonprofits should update donation pages, year-end appeals and customer-service scripts before 2026 giving peaks. Donor-facing language should identify the limited non-itemizer deduction accurately, explain that it applies to qualifying cash gifts, and avoid suggesting that every donor will receive a specific tax reduction.

Receipt systems should capture the organization’s legal name, contribution date, amount and payment information. For contributions of $250 or more, donors generally must obtain a contemporaneous written acknowledgment from the qualified organization before claiming a deduction. The IRS says the acknowledgment must generally be obtained no later than the date the donor files the return for the year of the contribution.

The acknowledgment should state the amount of cash or describe the property contributed, and it must say whether the organization provided goods or services in exchange. If goods or services were provided, the acknowledgment should include a good-faith estimate of their value.

Charities may also want to add donor database fields for gift size, recurring-gift activity, corporate relationships and major-gift timing. Filing status should not be collected unless there is a clear, voluntary and appropriate reason to do so. Cash-flow planning should include scenarios for more small-dollar donors but slower or smaller large gifts.

What donors should keep

Donors should save bank records, written communications and charity acknowledgments. A receipt alone may not establish that the recipient is eligible or show the value of goods or services received in exchange for a contribution.

The new non-itemizer provision described by the IRS applies to qualifying cash contributions. Noncash gifts have separate substantiation and valuation rules, which can include additional forms or appraisals for larger contributions.

People with complex tax situations should consult a qualified tax professional and the applicable IRS instructions. The key watch points for 2026 and 2027 will be donor awareness, average gift size, corporate giving, major-gift timing and how IRS forms and instructions are implemented.

Sources

• IRS Tax Tip 2026-57, “Tips for tracking charitable donations”
• Associated Press, “Trump’s tax law may increase the number of charitable donors but decrease gifts to nonprofits”
• Chronicle of Philanthropy, “Tax Law to Cost Charities $5.7 Billion. What to Do Now.”

The national warning is part of the five-week “Protect Your Clients; Protect Yourself” campaign launched July 7, 2026. The campaign is being reinforced through the IRS Nationwide Tax Forums, including the New Orleans forum taking place August 4-6.

What the IRS is warning about

The campaign identifies several schemes aimed at tax professionals. They include IRS impersonation by email, text, phone or direct message; misleading tax advice posted on social media; malicious messages from supposed new clients; and attempts to steal professional credentials and records, including an Electronic Filing Identification Number, or EFIN, a Preparer Tax Identification Number, or PTIN, and Centralized Authorization File, or CAF, information.

The IRS says criminals may pose as prospective clients and send links or attachments disguised as tax documents. Preparers are being urged to verify unusual requests through trusted channels instead of clicking unexpected links or opening files from unfamiliar contacts.

Why taxpayers can be affected

Taxpayers may not know when a preparer’s system has been compromised, but stolen Social Security numbers, income records or tax-account information can be used to submit fraudulent returns. A return can also be selected for identity verification, delaying a refund even when the taxpayer filed a legitimate claim.

The Taxpayer Advocate Service reported that, from January 1 through April 18, 2026, the IRS selected about 2.6 million returns for review through its Taxpayer Protection Program and released about 1.2 million of the associated refunds. The report said 887,000 refunds were released after taxpayers completed identity verification, while 269,000 were released using IRS records without taxpayer interaction.

Those selections do not mean every return was fraudulent. The Taxpayer Advocate Service has warned that IRS filters can also hold legitimate returns, creating delays while taxpayers verify their information.

The watchdog also reported that more than 500,000 identity-theft victim assistance cases remained open and that victims were waiting about 20 months on average for the IRS to resolve their cases or release refunds. That is an identity-theft case-resolution figure, not the normal timeline for an IRS refund.

Safeguards the IRS is emphasizing

The IRS is telling tax professionals to use multifactor authentication, train employees, verify unusual requests and keep security procedures current. It also says tax professionals must maintain a written information security plan under applicable law.

The plan should be tailored to the size, scope and complexity of the business and to the sensitivity of the customer information it handles. IRS guidance says the plan should address employee training, information systems, system failures, risk assessment, safeguards and oversight of service providers. It should also be reviewed and updated as the business changes.

If a tax professional suspects a data breach, the IRS says the incident should be reported quickly to the agency’s Stakeholder Liaison and to the appropriate state tax agency. Early reporting can give the IRS a chance to block fraudulent returns filed in clients’ names and help guide the preparer through the response process.

Steps taxpayers can take

People who use a paid preparer can ask how the firm protects client data, whether it uses multifactor authentication and whether it maintains a written information security plan. Taxpayers should be cautious about unsolicited messages requesting passwords, tax credentials, payment information or an Identity Protection PIN.

Taxpayers with a Social Security number or Individual Taxpayer Identification Number can request a free IRS Identity Protection PIN. The PIN is a unique six-digit number known to the taxpayer and the IRS and is issued for use on federal tax returns. It helps verify the taxpayer’s identity, but it is not a guarantee against every type of tax fraud and does not promise an immediate refund.

The IRS says taxpayers must verify their identity before receiving an IP PIN. People who cannot complete the process online or by phone may have other options, including submitting Form 15227 when eligible or making an appointment at a Taxpayer Assistance Center.

What happens next

The IRS forums and summer campaign provide guidance and prevention measures; they do not create new tax rules or enforcement powers. After the New Orleans session, the remaining 2026 Nationwide Tax Forums are scheduled for New York City on August 18-20, Orlando on September 1-3 and San Diego on September 15-17.

Sources

• Taxpayer Advocate Service filing-season report
• IRS written security plan guidance

The expansion is not universal. Access depends on the business’s tax classification, the user’s role and whether the IRS has the records needed to verify the account.

What changed in July

In Fact Sheet FS-2026-11, the IRS said Business Tax Account now includes an expanding library of digital notices. Designated officials can also download a CP575 notice confirming an employer identification number, or EIN. The notice can be used at banks and other financial institutions instead of a Letter 147C in situations that require EIN verification.

Eligible taxpayers can schedule a payment for any business day up to one year in advance, cancel a scheduled payment and review recently processed payments. The account can also be used for federal tax deposits, balance-due payments and certain Offer in Compromise payments. The availability of an Offer in Compromise payment function does not mean the IRS has approved an offer or forgiven tax debt.

Depending on the entity and user’s role, the account also allows users to view balances, see business information on file, request a tax compliance check, manage designated users and download selected payroll, income and excise tax transcripts. Multiple eligible entities can be accessed through the same account sign-in.

Which businesses may qualify

The IRS lists sole proprietors with an IRS-issued EIN, partnerships filing Form 1065, S corporations and C corporations among the supported business categories. Federal, state and local governments, Indian tribal governments and tax-exempt organizations may also have access.

For an LLC, the tax classification matters. A single-member LLC may qualify when it files as an S corporation or partnership. An LLC that files as a sole proprietor on Schedule C or Schedule F is not yet eligible for Business Tax Account access under the IRS’s current guidance.

An EIN or downloadable CP575 notice does not by itself guarantee registration. The IRS also considers identity verification, entity type, user role and the records available in its systems.

Owners and employees may see different information

Business Tax Account uses the same sign-in as an IRS Individual Online Account. A person associated with multiple eligible entities can select among them after signing in.

Individual partners and shareholders generally have limited access tied to Schedule K-1 records. The IRS says the currently available partnership K-1 records cover tax years 2012 through 2023, while shareholder K-1 records cover tax years 2006 through 2023. Limited users can generally view selected business information, balances, payments and transcripts, but not the full account.

A designated official may receive full access. For an S or C corporation, the person generally must be an eligible officer or managing member, a current employee who received a W-2 for the most recent tax filing year and someone authorized to legally bind the business. Partnership designated officials must be a general partner or managing partner of the LLC. Designated officials must renew their access annually. For officials registered in 2025, the 2026 renewal period ran from June 15 through July 29.

Businesses should confirm who is authorized to manage tax-account information before assigning work to an employee. The account can support designated-user management, but it does not replace the business’s responsibility to keep accurate records and follow filing and payment instructions.

Why the timing matters

The expanded tools arrive during the third-quarter tax calendar. For businesses using the semiweekly payroll-deposit rule, the next listed deposit date is August 5, 2026, followed by additional deposit dates throughout the month. Employers that timely deposited all required second-quarter payments generally have until August 10, 2026, to file Form 941. Monthly payroll-tax deposits for July are listed for August 17, 2026.

September 15, 2026, is another important date. The IRS calendar lists that date for the third installment of 2026 estimated tax for corporations and individuals, as well as calendar-year S corporation and partnership returns filed under a timely six-month extension. Other form-specific deadlines also fall on that date.

Businesses affected by disasters or other special circumstances may have different deadlines, and the IRS says taxpayers should check the current calendar and form instructions before relying on any date.

What small-business owners should do

• Check the entity’s federal filing classification, not just whether it uses an LLC name.
• Confirm whether the business files Form 1065, Form 1120-S, Form 1120 or an individual return with Schedule C or Schedule F.
• Sign in with the same credentials used for an IRS Individual Online Account, or create an account if needed.
• Confirm whether the person seeking access is an individual partner or shareholder, a designated official or another eligible user.
• Review the account’s notices, payment history, transcripts and business information for accuracy.
• Continue following the IRS tax calendar, deposit schedules and form-specific instructions.

Business Tax Account is best viewed as a management and records tool. It can put more IRS information and payment functions in one place, but eligibility remains limited and the account does not replace tax advice, required filings or the official tax calendar.

Sources

• IRS: Summer 2026 expanded features for Business Tax Account

Beginning with the 2026 filing cycle, those organizations generally must use Form 15644, Supplemental Group Ruling Information, to update the IRS about the organizations included in the group. The IRS announced the form requirement on July 14, 2026, after issuing Revenue Procedure 2026-8 on January 20, 2026.

The change does not require every nonprofit to file Form 15644. It generally applies to a central organization with one or more subordinate organizations covered by a group exemption letter. The form also does not replace separate Form 990-series returns, Form 990-N notices or other annual filing requirements that may apply.

What Form 15644 reports

The form is designed to keep IRS records current. A central organization can use it to add or remove subordinate organizations, report changes in names or mailing addresses, and notify the IRS about changes in a subordinate organization’s purpose, character or method of operation.

The annual submission also covers subordinate organizations that have been removed from the group, organizations being added, and subordinates whose tax exemptions were automatically revoked. The required lists include each organization’s name, mailing address and employer identification number.

A central organization may submit additional updates outside its annual filing window, including an update to add a new subordinate organization. Form 15644 can also be used to terminate a group exemption.

When the filing is due

The deadline is tied to the central organization’s annual accounting period, not necessarily the calendar year. The annual Supplemental Group Ruling Information submission generally must be made at least 30 days, but no more than 90 days, before the close of that accounting period.

For a central organization with a December 31 year-end, the practical filing window is October 2 through December 1, subject to the organization’s applicable accounting-period calculation.

The IRS’s current Form 15644 instructions say the form must be submitted by fax at 833-312-5228. Revenue Procedure 2026-8 uses broader language saying the required information must be submitted electronically and allows the IRS to change submission procedures through later guidance. Because the specific form instructions and the broader procedure use different wording, compliance teams should check the latest IRS instructions before filing.

Which churches are excepted

A central organization described in section 501(c)(3) that is a church, or a convention or association of churches, and that maintains a group exemption letter may submit the annual information but is not required to do so under the stated exception.

The exception applies to the qualifying central organization. It should not be read as a blanket exemption for every nonprofit connected to a religious group.

What existing groups must review by January 22, 2027

Revenue Procedure 2026-8 establishes a transition period for existing group exemption letters and preexisting subordinate organizations. Required actions under the applicable transition provisions must be completed by January 22, 2027.

For affected groups, the review can include whether the central organization has more than one group ruling, whether subordinate organizations meet the revised affiliation and general supervision or control standards, whether a subordinate’s section 501(c) classification matches the group exemption letter, and whether the group still has at least one subordinate organization.

Some organizations continuously included in the same group ruling as of January 20, 2026, may qualify for grandfather provisions affecting particular requirements. The transition rules are detailed, so central organizations should determine which provisions apply to their group rather than assume that every subordinate must immediately satisfy every new standard.

What nonprofit teams should do now

Central organizations should first confirm whether they maintain a group exemption letter and identify every subordinate organization covered by it. They should then calculate the annual filing window by working backward from the close of the central organization’s annual accounting period.

Before submitting Form 15644, teams should assemble current names, mailing addresses and EINs; review additions and removals; check for automatically revoked subordinates; and document changes in purposes or operations. They should also review the group’s affiliation, supervision and control structure ahead of the January 22, 2027, transition deadline.

The procedure lists failure to submit timely and complete Supplemental Group Ruling Information as one possible basis for IRS termination of a group exemption in applicable cases. That does not mean a late Form 15644 automatically revokes every organization’s tax-exempt status. Separate annual filing obligations continue to apply where required.

Sources

• IRS Exempt Organizations Update
• RSM US analysis

The accounts became available for funding on July 4, 2026, under the Working Families Tax Cuts. That date is separate from July 4, 2025, when the law was enacted. Trump Accounts are a special type of traditional IRA, not checking or ordinary savings accounts. Funds must be invested in qualifying mutual funds or exchange-traded funds that track a U.S. stock index.

Who can open an account

A parent, guardian or other authorized person can establish a Trump Account for a child who has a valid Social Security number and will not reach age 18 before the end of the calendar year in which the election is made.

Opening an account and qualifying for the federal seed contribution are separate questions. Older children may be eligible for an account, but they generally do not qualify for the $1,000 Treasury pilot-program contribution.

Who qualifies for the $1,000

The one-time Treasury contribution is limited to an eligible child who is a U.S. citizen, has a valid Social Security number and was born from January 1, 2025, through December 31, 2028. An authorized adult also must make the required election.

The $1,000 is deposited into the child’s account. It is not a cash payment that families can withdraw for diapers, rent, food, medical bills or other ordinary near-term expenses.

How to enroll through the IRS

Parents and other authorized individuals submit Form 4547, Trump Account Election(s). The IRS says taxpayers can submit the form electronically through an IRS Individual Account and view the submission status, including any next steps.

Families should use official IRS and Treasury websites when enrolling. Because the program is new, unsolicited messages asking for a Social Security number, bank information or payment to “claim” the benefit should be treated cautiously.

How families, employers and others can contribute

During the account’s growth period, authorized individual and employer contributions are generally subject to a combined $5,000 annual limit, with the limit adjusted for inflation after 2027. The $1,000 pilot contribution is treated separately, as are certain qualified government or nonprofit contributions and other contributions covered by the statute.

Employers may contribute up to $2,500 per year toward an employee’s or dependent’s Trump Account, subject to the statutory rules and applicable guidance. Employers should tell workers whether the benefit is available and how contributions will be handled.

Relatives and other individuals should keep records of their contributions. Treasury and the IRS issued Revenue Procedure 2026-25 with a gift-tax reporting safe harbor for qualifying cash contributions. For 2026, the annual gift-tax exclusion is $19,000 per beneficiary, but the safe harbor applies only when all of the procedure’s conditions are met. Those conditions include limits on other gifts and circumstances in which a gift-tax return is otherwise required. The safe harbor does not eliminate every possible gift-tax obligation or filing requirement.

Where the money goes

Trump Account funds are invested rather than held as ordinary bank savings. The permitted investments are certain mutual funds or exchange-traded funds that track a U.S. stock index, such as the S&P 500.

Investment returns are not guaranteed. Market losses, fund expenses and other fees can affect the account balance, so families should not treat the $1,000 contribution or future contributions as a guaranteed amount available later.

When the child can use the money

Generally, money cannot be withdrawn before the year the child turns 18, subject to limited exceptions and the account’s governing rules. After the growth period, the account is treated like a traditional IRA with similar tax rules.

That means a Trump Account is a long-term investment account, not an emergency fund. Even after the child reaches the applicable distribution period, withdrawals may have tax consequences and should be reviewed under the traditional-IRA rules.

The practical first step is to check the child’s citizenship, birth date and Social Security number, then submit Form 4547 through an IRS Individual Account. After that, families should confirm whether the account qualifies for the $1,000 pilot contribution, identify who will contribute and track whether contributions count toward the annual limit.

Sources

• IRS: Working Families Tax Cuts — Trump Accounts overview
• Associated Press: Trump Accounts launch July 4 — what families should know

On July 8, 2026, the agency announced its Automatic Exemption from Penalty program, or AEP. For eligible taxpayers, the IRS will prevent certain penalties during original return processing without requiring a separate request. First Time Abate, the existing request-based program, remains available for some earlier and transition-period returns.

What is changing

AEP is an IRS administrative program, not a new statutory tax exemption or a blanket waiver of penalties. It is designed for taxpayers who generally complied with their filing, payment and deposit obligations but have a one-time problem.

When a taxpayer qualifies, the IRS applies AEP automatically during original return processing. No application or separate request is required, and the agency says it will send a notice confirming that the penalty was not assessed because of the taxpayer’s timely compliance history.

Eligibility generally requires the same type of return to have been filed on time during the three prior years, with tax due paid on time. For quarterly returns, the relevant history is generally 12 consecutive quarters. Other conditions can apply, especially for business taxpayers.

The key date is Jan. 1, 2027

For eligible original returns with due dates on or after Jan. 1, 2027, AEP is expected to replace First Time Abate. The cutoff is based on the return’s original due date, not simply the date the IRS finishes processing it.

The IRS began phasing in AEP during summer 2026. The agency’s guidance says AEP consideration begins with eligible 2025 tax-year returns and 2026 quarterly returns, but some of those returns may still have been processed before the automated system was available.

Which returns may still require a request

First Time Abate remains available by request for eligible 2024 tax-year returns and eligible 2025 quarterly returns. It may also remain available for eligible 2025 tax-year returns and eligible 2026 quarterly returns that were processed before AEP began.

For those returns, First Time Abate will not be applied automatically. If a qualifying return receives a penalty notice and the taxpayer does not receive a separate notice saying AEP was applied, the taxpayer should contact the IRS and ask whether First Time Abate or another form of relief is available.

What AEP can cover

For eligible individuals, AEP can prevent failure-to-file and failure-to-pay penalties. For eligible business taxpayers, it can also cover failure-to-deposit penalties.

The IRS says AEP generally applies to certain recurring return series, including Forms 1040, 1065, 1120, 940, 941, 943, 944, 945 and CT-1. Event-based or infrequently filed returns, such as estate and gift tax returns, generally are not eligible.

AEP does not cover every penalty. IRS guidance excludes daily delinquency penalties, accuracy-related penalties, information-reporting penalties and other penalties outside the program. Business taxpayers also face additional conditions for failure-to-deposit relief, including limits related to prior penalty waivers and electronic-payment-system avoidance.

AEP does not erase the underlying tax or interest. Taxpayers remain responsible for filing, paying and making required deposits on time, as well as paying penalties that fall outside the program.

Why the change matters

The National Taxpayer Advocate says the old process left some eligible taxpayers without relief because they did not know to ask, could not reach the IRS or could not afford professional help. The advocate says that burden was especially significant for low-income taxpayers and people without access to a tax professional.

In fiscal year 2025, nearly 220,000 taxpayers received First Time Abate relief through the manual process. The Taxpayer Advocate Service estimates that more than 1.5 million taxpayers would have received relief if AEP had been in place during that same period. That is an estimate based on fiscal year 2025 data, not a guarantee of future recipients.

The National Taxpayer Advocate has also urged the IRS to preserve reasonable-cause relief when a taxpayer’s circumstances support it, rather than using an administrative waiver in a way that could affect eligibility for future AEP relief. That issue remains part of the implementation debate.

What taxpayers should do now

• Keep filing, paying and making required deposits by the deadline. AEP is limited relief, not permission to file or pay late.
• Check the return’s tax year, return type, original due date and processing timing before assuming relief will be automatic.
• If an eligible transition-period return receives a penalty notice, call the IRS using the number on the notice and ask whether First Time Abate applies.
• Keep the notice and records showing your filing and payment history available.
• If neither AEP nor First Time Abate applies, reasonable-cause relief may still be available depending on the facts.

The practical rule is simple: eligible original returns with due dates on or after Jan. 1, 2027, are expected to move to automatic relief. Earlier and transition-period returns may still require taxpayers to contact the IRS.

Sources

• IRS: Automatic Exemption from Penalty — What taxpayers should know
• National Taxpayer Advocate: The IRS implements automatic penalty relief

The committee postponed its planned vote during a July 30 executive business meeting as Sens. John Cornyn of Texas and Thom Tillis of North Carolina sought written assurances about a proposed anti-weaponization fund and tax-audit protections described in reporting on the settlement of President Donald Trump’s lawsuit against the IRS.

The dispute has placed Blanche’s nomination at the center of a broader question about Senate confirmation power: how far can senators press the executive branch for written commitments about Justice Department and IRS actions while deciding whether to advance a top administration official?

What the committee did

The Judiciary Committee’s official record lists its July 30 executive business meeting as postponed. Todd Blanche was the only nominee listed on the agenda for that meeting.

Committee Chairman Chuck Grassley, R-Iowa, later placed Blanche’s nomination on the calendar for Tuesday, August 4. The Associated Press reported that Grassley wants Blanche confirmed before the Senate’s August recess and that scheduling the vote gives the White House more time to secure the votes needed to advance the nomination.

A committee vote would decide whether to send the nomination to the full Senate. It would not guarantee confirmation by the full chamber.

What Cornyn and Tillis want

The senators’ objections concern terms described in reporting on the administration’s settlement of Trump’s lawsuit against the IRS. The agreement was reported to include a proposed $1.776 billion Anti-Weaponization Fund to compensate people who say they were mistreated by the Justice Department, along with protections from tax audits for Trump and members of his family.

The Justice Department said in June that it was no longer moving forward with the fund after bipartisan objections. Cornyn and Tillis have nevertheless sought written language stating that Blanche’s May 18 order establishing the fund has been rescinded and has no legal effect.

The senators also want clarification about the settlement’s tax-audit provisions. Cornyn has said the protections should apply only to existing matters and should not extend to future tax filings. The scope and legal effect of those provisions remain disputed, and the settlement should not be treated as a settled expansion of immunity beyond what the documented reporting describes.

Trump’s August 1 threat

On Saturday, August 1, Trump threatened to keep Blanche as acting attorney general if Cornyn and Tillis did not support the nomination. He also said he would push to restore the Anti-Weaponization Fund.

That was a stated threat, not a completed administrative action. It followed Trump’s comments on Friday, July 31, that the fund was “dead,” even as he continued to defend its purpose. The conflicting public positions have made it harder for the senators to accept verbal assurances alone.

Blanche is already serving as acting attorney general. That makes the dispute relevant beyond the confirmation calendar: the Justice Department has a leader in place, while the Senate is deciding whether to advance his nomination and give the full chamber the opportunity to consider him for the permanent position.

Why the dispute matters

The Senate’s advice-and-consent role gives senators the power to consider, delay or reject executive nominations. In practice, senators may also seek answers, documents or written commitments from the administration before deciding how to vote.

That authority does not give the Senate direct control over every executive-branch decision. The central question in this dispute is whether written assurances connected to a Justice Department and IRS settlement can resolve senators’ concerns enough for them to advance Blanche’s nomination.

The timing also matters. The administration is seeking confirmation before lawmakers leave Washington for the August recess, while Cornyn and Tillis are holding out for additional assurances about the fund and the tax-audit provisions.

What to watch next

The immediate question is whether the Judiciary Committee holds its scheduled vote on August 4 and whether Cornyn and Tillis receive the written assurances they have requested.

If the committee advances Blanche, Senate leaders would then have to decide whether to bring the nomination before the full chamber before the August recess. If the objections remain unresolved, the nomination could face another delay even though Blanche is already serving in an acting capacity.

The settlement questions will also remain important. The fund, the scope of the tax-audit protections and the administration’s authority to change or revive disputed terms are separate issues from the committee vote, but they are now directly tied to the Senate’s decision over whether to advance the nominee who is currently leading the Justice Department.

Sources

• U.S. Senate Judiciary Committee — Executive Business Meeting
• Associated Press — Trump’s threat to push ahead on settlement fund

The IRS announced the change on July 8, 2026, and said implementation began during summer 2026. AEP is replacing First Time Abate, the administrative relief process that previously required taxpayers to ask the IRS to remove certain penalties.

Who may qualify

In general, taxpayers must have timely filed the same type of return and paid the tax due during the prior three years. For quarterly filers, the lookback is 12 consecutive quarters. The IRS also considers whether penalties during that period were absent or were later removed because of reasonable cause or IRS error.

The program is not automatic forgiveness for every late filer. Business taxpayers face additional requirements, including limits on prior failure-to-deposit penalty waivers and restrictions involving the Electronic Federal Tax Payment System.

Which penalties and returns are covered

AEP can prevent certain failure-to-file, failure-to-pay and failure-to-deposit penalties from being assessed. IRS guidance lists Forms 1040, 1065, 1120, 940, 941, 943, 944, 945 and CT-1 among the return series eligible for consideration.

The program generally begins with 2025 tax-year returns and 2026 quarterly returns, along with later eligible periods. Event-based or infrequently filed returns, information reporting tied to another filing and the Daily Delinquency Penalty are among the exclusions listed by the IRS.

What taxpayers should do during the transition

For taxpayers who qualify, the IRS applies AEP when an eligible original return completes processing. The agency will send a notice explaining that relief was granted, and taxpayers generally will not need to respond.

The transition may be less straightforward for some 2025 and 2026 filings. The IRS says qualifying taxpayers may still receive a penalty notice while First Time Abate is being phased out. Anyone who receives a notice showing an assessed penalty but believes AEP should have applied should review the notice and contact the IRS using its instructions rather than ignoring it.

What the program does not erase

AEP is an administrative penalty-relief program, not a cancellation of the underlying tax bill. Taxpayers remain responsible for unpaid tax, interest and penalties that are outside the program. People who do not qualify may still request relief based on reasonable cause.

The IRS says AEP will replace First Time Abate for eligible returns with original due dates on or after January 1, 2027. Until then, taxpayers and businesses should keep records of filing and payment history and check each IRS notice carefully.

Sources

• IRS administrative penalty relief guidance
• National Taxpayer Advocate analysis

The case names Christopher Slater, a California man, and Mark Keagel of York, Pennsylvania. An indictment returned by a federal grand jury in Harrisburg, Pennsylvania, accuses Slater of helping recruit business owners, using their information to file false returns and laundering the proceeds. Prosecutors say at least 290 returns were filed for 35 businesses.

What the indictment alleges

The returns sought two pandemic-era credits: the Paid Sick and Family Leave Credit, which reimbursed qualifying wages paid to workers on COVID-related sick or family leave, and the Employee Retention Credit, which was designed to encourage businesses to keep employees on their payroll during the pandemic.

The Justice Department says the alleged claims totaled more than $52.7 million. That figure represents credits prosecutors say were sought, not confirmed losses. The department says the IRS paid more than $32.2 million.

The indictment also alleges that Keagel provided information from two defunct businesses to a co-conspirator. The Justice Department says false returns were filed for those businesses and that the IRS mailed approximately $3.6 million in Treasury checks to Keagel, who allegedly laundered the money.

Those are allegations, not findings of guilt. Slater and Keagel are presumed innocent unless proven guilty in court. If convicted, they could face prison terms on charges including conspiracy, mail fraud, money laundering and theft of government property.

Why GAO is watching the program

The case arrives as federal watchdogs continue reviewing how the IRS administered the Employee Retention Credit. In a report published February 10, 2026, the Government Accountability Office said the IRS had processed nearly 5 million ERC claims as of June 2025 and provided about $283 billion to employers.

GAO did not conclude that every ERC claim was improper. It found that the agency was overwhelmed by a surge of claims and faced challenges created by complex eligibility rules, paper-based amended returns, limited data collection and weaknesses in risk management. The IRS imposed a processing moratorium in September 2023 to address improper claims, and IRS officials told GAO that most claims had been closed by December 31, 2025.

GAO also said the IRS did not complete an improper-payment estimate for the ERC as required by law. The watchdog made four recommendations, including estimating improper payments, modernizing amended-return processing, updating the public about remaining claims and adopting stronger emergency-program risk policies.

As of the GAO report’s public status page, the recommendation to update the public had been closed after an IRS update in June 2026. The other three recommendations remained open, with additional IRS responses expected in summer 2026.

What happens next

IRS Criminal Investigation is investigating the case, while Justice Department prosecutors are handling the charges. The court proceedings will determine whether the allegations can be proven.

For taxpayers and businesses, the broader accountability question is whether federal agencies can build stronger controls before another emergency tax-credit program is launched. GAO’s findings suggest that speed can help deliver relief, but incomplete eligibility data, manual processing and delayed risk estimates can make it harder to identify improper payments while money is still recoverable.

Sources

• U.S. Department of Justice indictment announcement
• Government Accountability Office report GAO-26-107456
• IRS Criminal Investigation

The committee’s markup materials describe H.R. 9501 as a bill that would require the Treasury Department and the IRS to run a time-limited artificial-intelligence pilot aimed at identifying potentially inaccurate tax returns connected to identity theft, certain fraudulent claims tied to tax credits (including the earned income tax credit), and returns improperly prepared by third-party preparers who are not properly identified on the return.

In a Joint Committee on Taxation (JCT) estimate, Ways & Means also got the budget-watch answer: JCT said the proposal would have a negligible effect on federal fiscal year budget receipts—meaning it is not scored as a major revenue shift, even if it changes how the IRS screens certain returns.

What H.R. 9501 would require (if enacted)

The bill’s described structure centers on a pilot and an after-action oversight report:

• Timing to start: the Secretary of the Treasury would have to establish the AI pilot not later than 180 days after enactment.
• Duration: the pilot would operate for between 18 months and 2 years.
• Focus areas: potentially inaccurate returns tied to identity theft, fraudulent claims relating to tax credits, deductions, or refunds, and returns improperly prepared by third-party preparers who are not properly identified on the return.
• Oversight/reporting: within 180 days after the pilot ends, the Comptroller General would submit a report to the House Ways & Means Committee and the Senate Finance Committee.

That report would cover (1) the aggregate amount of improper refunds or reduced tax liability attributable to fraud detected through the pilot, (2) any government recovery, and (3) the accuracy of the AI tools used in identifying fraudulent tax returns.

How JCT scored the receipts impact

JCT estimated H.R. 9501 would have a negligible effect on federal fiscal year budget receipts. Practically, that points to a compliance-and-administration theme—Congress is primarily requiring an IRS pilot and an oversight review rather than treating the bill as a large revenue measure.

Why taxpayers and tax preparers may notice (conditional on enactment)

Even though the AI portion is designed as a temporary pilot, changes in IRS screening can still affect how quickly returns move, what documentation questions taxpayers face, and what follow-up activity triggers when fraud-risk flags are raised.

Ways & Means members supporting the bill have framed it as a limited pilot with guardrails, and they emphasize that the pilot would be subject to independent review by GAO before broader application is considered. The required Comptroller General report is the accountability checkpoint Congress would receive after the pilot ends.

What to watch next in the Congress-and-budget timeline

With committee approval, the key reader question becomes whether H.R. 9501 is scheduled for House floor action—and whether any Senate companion track takes shape alongside it.

If the bill becomes law, the 180-day timeline to establish the pilot would begin at enactment. After the pilot ends, the next visible accountability milestone would be the Comptroller General’s report to the two tax-writing committees within 180 days.

Sources

• JCT JCX-23-26: Description of H.R. 9501
• House Ways & Means markup event listing for H.R. 9501 — July 1, 2026
• Richard Neal opening statement at the H.R. 9501 markup

The order also restricts how the parties may describe a purported “settlement” and an “anti-weaponization” fund concept in future official proceedings, and it triggers potential attorney-discipline review at multiple bar authorities.

What the judge ruled: Rule 11 “improper purpose”

The court’s core finding was not a final decision on the underlying tax dispute. Instead, the judge concluded the case was filed and pursued for an “improper purpose” under Rule 11—framing it as misuse of the judicial process tied to the lawsuit’s settlement structure.

Judge Williams also made clear that voluntary dismissal does not necessarily end the court’s ability to address Rule 11 abuses tied to how the case was brought and handled.

Sanctions and referrals: Florida plus other bar authorities

The order imposed non-monetary sanctions and referrals, including:

• Referral to the Florida Bar: The court referred attorney Alejandro Brito for potential professional discipline.
• Pro hac vice restriction in S.D. Florida: The court denied future pro hac vice admission for attorney Daniel Z. Epstein for one year (or until further order).
• Copy mailed for potential discipline: The clerk was directed to send copies of the order to the State Bar of New York and the District of Columbia Bar for disciplinary proceedings involving Acting Attorney General Todd Blanche and Associate Attorney General Woodward.

In addition, the order described a schedule for possible further monetary sanctions related to court-appointed amici—separate from the non-monetary discipline and the evidentiary-use restrictions.

The court’s key restriction: no using or citing the “settlement” provisions

A central part of the sanctions is an order restricting future courtroom and government use of the deal-like terms. The court prohibited the parties from referring to the purported “settlement agreement,” and from using, offering, admitting, or citing any of its provisions in any judicial, administrative, regulatory, arbitration, or other official proceeding as evidence that a settlement was reached.

Where the “anti-weaponization” fund fit in—per court and DOJ descriptions

In explaining the settlement framework the judge addressed, the order recounted that the “anti-weaponization” fund was described as being financed by the U.S. Treasury’s Judgment Fund, totaling $1.776 billion.

Earlier, the Justice Department described a similarly named “anti-weaponization” fund, including its stated purpose and financing mechanism through the Judgment Fund.

What comes next (and what remains uncertain)

• Bar discipline takes time and may not end in sanctions: A referral or mailing of the order to bar authorities does not automatically mean discipline will be imposed.
• Limits on future “settlement” characterization are immediate: The restriction affects what parties can argue or submit in official proceedings going forward.
• Don’t read this as a merits win/loss on the IRS dispute: This is a sanctions and Rule 11 accountability ruling tied to litigation conduct and court-ordered limits after dismissal, not a conclusive national determination of the underlying tax/liability issues.

Next to watch: whether any parties seek further review of the sanctions, and how bar authorities handle the disciplinary referrals triggered by the order.

Sources

• Civil Rights Litigation Clearinghouse (University of Michigan) — PDF of Order (July 13, 2026) in Trump v. IRS (S.D. Florida)
• AP News — Judge says Trump IRS lawsuit was filed for “improper purpose,” refers lawyer for possible discipline (July 13, 2026)
• Axios — Sanctions details tied to the anti-weaponization fund (July 13, 2026)
• U.S. Department of Justice (Office of Public Affairs) — “Justice Department Announces Anti-Weaponization Fund” (May 18, 2026)
• Reuters (republished by Investing.com) — Judge finds Trump misused court in IRS case, refers lawyers for discipline (July 13, 2026)

What the IRS is changing

In an announcement dated July 8, 2026, the IRS said AEP is a new systemic process that replaces the long-standing First Time Abate administrative relief. Under AEP, eligible taxpayers generally do not need to request penalty relief—they’re instead expected to get a notice once relief is applied during processing.

When AEP starts

The IRS says AEP is expected to begin in summer 2026. It applies to eligible original returns beginning with:

• Tax year 2025 original returns
• 2026 quarterly returns and future tax periods

Who qualifies for AEP

Eligibility is tied to whether you have a history of timely filing and paying:

• You timely filed the same return type for the prior three years (or 12 consecutive quarters for quarterly returns), and
• You either had no penalty assessed (except the estimated tax penalty) or had a penalty assessed that was later abated for reasonable cause or IRS error.

For business taxpayers, the IRS adds additional conditions. For example, the IRS says it did not waive the failure to deposit penalty four or more times in the prior three years (or 12 consecutive quarters), and that the failure-to-deposit penalty was not charged for EFTPS avoidance.

What types of penalties AEP covers—and what it doesn’t

The IRS says AEP is designed to stop certain administrative penalties from being assessed during processing when AEP applies. The eligible penalty categories are:

• Failure to file
• Failure to pay
• Failure to deposit

But AEP is not universal. The IRS says you can’t get this relief for certain situations, including:

• Returns filed once or infrequently (event-based filing)
• the Daily Delinquency Penalty (DDP)
• Information reporting dependent on another filing

The IRS also gave examples in its newsroom release, saying some information returns and returns filed only in response to specific transactions or infrequent events—such as Form 706 and Form 709—generally are not eligible.

How the “automatic” process works for taxpayers

The IRS says AEP is applied when your original return completes processing. If your original return is eligible:

• the IRS won’t assess penalties for failure to file, failure to pay, or failure to make a deposit; and
• you should receive a notice explaining that AEP relief was granted.

The IRS says eligible taxpayers generally don’t need to contact the IRS or respond to the notice to get the relief.

If you receive a penalty notice during the transition

This is the scenario to watch next. The Taxpayer Advocate Service says taxpayers should not ignore an IRS notice assessing a failure-to-file, failure-to-pay, or failure-to-deposit penalty. If you received a penalty notice for a 2025 tax year return and you did not get a separate notice saying AEP was applied, it recommends:

• reviewing the notice carefully, and
• calling the IRS using the toll-free number on the notice to request penalty relief if you believe you qualify.

If you don’t qualify for AEP, the IRS says you may still be able to request penalty relief based on reasonable cause, and the IRS will notify you of its decision.

What to do now

• Keep your IRS letters. Don’t assume “automatic” means “no action ever.” Compare what the notice says about the penalty and whether it mentions AEP.
• If AEP isn’t mentioned and you think you qualify, check before paying. Follow the notice instructions and consider contacting the IRS using the number on the letter.
• Check whether your situation is excluded. AEP does not apply to all returns or penalty situations, including DDP and some event-based/information-reporting scenarios.

For eligible taxpayers, the IRS says AEP is meant to reduce burden by suppressing certain penalties during processing instead of forcing people to go through a request workflow. But during the rollout, your notice is still the practical place to confirm what happened for your specific return.

Sources

• IRS Newsroom (IR-2026-83) — “IRS Simplifies Penalty Relief: Introduces Automatic Process for Eligible Taxpayers” (July 8, 2026)
• Taxpayer Advocate Service (NTA Blog) — “A long-awaited taxpayer win: The IRS implements automatic penalty relief” (July 2026)

Why it matters now: Markup is an intermediate step, not final law. The key next question for taxpayers, tax professionals, and affected nonprofit hospital organizations is whether this package moves quickly to the full House—and whether any provisions change through floor amendments.

Seven bills, four reader-facing themes

Ways & Means says the package covers:

• Taxpayer rights (hostage/detention-related penalty relief; and expanding the National Taxpayer Advocate’s ability to appear in court as amicus curiae).
• IRS modernization (a fellowship/taskforce approach to modernization and data-driven methods, including guidance on AI use).
• Tax integrity and fraud enforcement (targeting fraud victims’ tax burdens and “ghost preparer” conduct).
• Nonprofit hospital transparency (facility-level reporting for large tax-exempt hospital organizations).

Specifically, the seven bills are: H.R. 9496 (End Tax Penalties on American Hostages Act), H.R. 9500 (Tax Relief for Fraud Victims Act), H.R. 9501 (AI Tax Integrity Act of 2026), H.R. 9498 (Taxpayer Advocate Participation Act), H.R. 9499 (Protecting Taxpayers from Ghost Preparers Act), H.R. 7972 (Taxpayer Workforce Modernization Act), and H.R. 9504 (Tax Exempt Hospital Transparency Act).

Taxpayer rights: penalties after wrongful detention, plus court participation

For taxpayers who were held hostage or wrongfully detained abroad, H.R. 9496 is designed to prevent situations where returning home could still trigger penalties for late tax payments “due to captivity,” according to the committee’s explanation.

H.R. 9498 targets court-room access: it would allow the National Taxpayer Advocate to appear as amicus curiae in certain federal tax cases, so the advocate can weigh in when taxpayer interests could be affected by decisions that carry broader implications.

IRS modernization and AI integrity: a limited pilot, then GAO oversight

The most prominent technology-focused measure is H.R. 9501, the AI Tax Integrity Act of 2026. The committee says it would require the Treasury Secretary to run a pilot program using AI to identify inaccurate tax returns tied to risks such as identity theft, fraudulent claims for credits/deductions/refunds, and improperly prepared returns by third-party return preparers.

Ways & Means also emphasizes guardrails: it describes the approach as testing proven technology on a limited basis to generate real results, and it says the bill requires a mandatory, independent GAO report to the Ways & Means and Finance Committees so Congress can decide whether to expand, modify, or end the effort.

Ghost preparers: clarifying how fraud ties into tax deadline rules

H.R. 9499, the Protecting Taxpayers from Ghost Preparers Act, is aimed at “ghost preparers”—described by the committee as unlicensed professionals who make a return appear as if the taxpayer prepared it, even when they did not.

The committee says the bill would clarify that the exception to the general statute-of-limitations rules for fraudulent returns applies only when it is the taxpayer who seeks to evade tax obligations—not misconduct solely by a return preparer.

Fraud victims: relieving tax burdens tied to theft and casualty losses

H.R. 9500, the Tax Relief for Fraud Victims Act, focuses on tax treatment of losses stemming from fraud. The committee says it would repeal a limitation that generally suspends the deduction for personal casualty and theft losses unless tied to a federally (or sometimes state) declared disaster.

Ways & Means also describes additional components intended to give fraud victims more flexibility, including flexible reporting and extended timeframes for filing claims related to theft losses and certain retirement-plan distributions tied to those losses.

Hospital transparency: facility-level reporting for large nonprofit systems

The hospital transparency measure, H.R. 9504, would require additional IRS reporting by tax-exempt hospital organizations—moving beyond what the committee says is currently less facility-specific disclosure.

The committee says the most enhanced reporting requirements would apply to large tax-exempt hospitals that have more than 100 inpatient beds and/or more than $100 million in net patient revenue. It describes updated reporting that includes:

• CMS certification numbers for each hospital facility (a facility-level identifier).
• Value of financial assistance and the number of completed financial assistance applications received, granted, and denied.
• Spending to address the three highest priority health needs from the most recent Community Health Needs Assessment, plus additional reporting on categories such as quality improvement, nonclinical programming, and advertising costs.
• Information on health service lines and the 340B drug discount program.

What to watch next as the bills move toward the House

Once a package leaves committee, the biggest practical storyline becomes how fast it reaches the House floor and what changes through amendments. For taxpayers and tax professionals, pay attention to how the “AI integrity” concept stays limited and reviewable, and how “ghost preparer” enforcement is defined in the final text. For qualifying nonprofit hospital organizations, focus on how the thresholds and facility-level reporting expectations are finalized in the bill language.

Sources

• Ways & Means committee package summary (July 1, 2026)
• JCX-26-26 (Joint Committee on Taxation bill descriptions)
• GovInfo related documents for H.R. 9504

The IRS says its Working Families Tax Cuts – Individuals and workers page was last reviewed or updated on July 1, 2026, and its main Working Families Tax Cuts landing page was last reviewed or updated on July 6, 2026. Among the most household-relevant changes are two deductions that can affect what tipped workers and overtime earners owe in federal income taxes: “no tax on tips” and “no tax on overtime.”

The IRS also warns that common pay documents (like W-2s and 1099s) may not separately spell out the qualified tip or overtime amounts you need—so recordkeeping and correct entries on your return matter for household budgeting, not just tax prep.

1) “No tax on tips”: limits, income phaseout, and who doesn’t qualify

For tax years 2025 through 2028, IRS guidance says eligible employees and self-employed individuals may deduct qualified tips they received in occupations the IRS identified as “customarily and regularly receiving tips” (identified on or before Dec. 31, 2024). The IRS defines “qualified tips” as voluntary cash or charged tips received from customers, including shared tips. The maximum annual deduction is $25,000.

For higher-income filers, the deduction phases out for modified adjusted gross income above $150,000 (or above $300,000 for married couples filing jointly). If you’re self-employed, the IRS also says the deduction can’t exceed your net income (before this deduction) from the trade or business where the tips were earned.

IRS guidance also sets a bright-line disqualifier for many workers: individuals who are self-employed in a Specified Service Trade or Business (SSTB) under Section 199A, or employees of an employer in an SSTB, do not qualify for the “no tax on tips” deduction.

2) “No tax on overtime”: how the math works and what’s capped

For tax years 2025 through 2028, IRS guidance says the “no tax on overtime” deduction applies to the portion of qualified overtime pay that exceeds your regular rate of pay—an example given is the “half” portion of “time-and-a-half.” Overtime must be reported on Form W-2, Form 1099, another statement furnished to you, or directly by you.

Like the tips deduction, the overtime deduction has both a cap and an income phaseout. The maximum annual deduction is $12,500 (or $25,000 for joint filers). It phases out for modified adjusted gross income above $150,000 (or $300,000 for joint filers).

To claim either deduction, IRS guidance says you need a Social Security number (SSN) and that you may claim the deduction whether you itemize or not. If you’re married, the IRS guidance says to file jointly to claim.

Don’t wait for your W-2 or 1099 to “label” your benefit

From a household-budget perspective, one of the most practical IRS points is that your tax forms may not tell the full story at a glance. For the 2025 tax year, IRS guidance warns that W-2s and 1099s may not separately identify the specific amounts you need—so your paperwork has to be more complete than what shows up in the “box” totals.

Still, the IRS says the tip or overtime amount you claim must be included in the total amounts reported on those forms—so it’s not enough to “trust the box that’s filled in.”

Instead, the IRS checklist emphasizes keeping records like:

• Daily or weekly tip logs, plus employer reports, point-of-sale summaries, or invoices showing tips
• Pay stubs or payroll summaries showing overtime pay

If you worked multiple jobs, switched employers, or worked as an independent contractor, the IRS guidance says you may need records from each employer or client/customer.

Where it shows up on your return: Schedule 1-A parts II and III

At filing time, IRS guidance directs taxpayers to claim the tips deduction on Schedule 1-A, Part II (“No Tax on Tips”) and the overtime deduction on Schedule 1-A, Part III (“No Tax on Overtime”). The IRS also points back to basic claim steps like including your SSN on the return and following the joint-filing instruction where applicable.

For gig and self-employed tipped work, IRS guidance additionally notes that qualified tips may show up across information returns such as W-2 forms and 1099-MISC and 1099-NEC records—and possibly a 2026 Form 1099-K in connection with 2025 activity. But the IRS emphasizes that forms may not separately report qualified tip amounts for 2025, so your own records still matter.

What to watch next for the 2025 tax year

IRS guidance references final regulations listing occupations where workers customarily and regularly receive tips. It also says Treasury and the IRS will provide penalty relief for tax year 2025 tip reporting, and transition relief for tax year 2025 overtime reporting.

For household budgets, the best next step is practical: confirm which tax year you’re dealing with, then align your records and Schedule 1-A entries to the IRS’s definitions—especially since W-2s and 1099s may not separately spell out the qualified tip or overtime amounts for you.

Sources

• IRS newsroom hub: Working Families Tax Cuts – Individuals and workers (includes “No tax on tips” and “No tax on overtime”)

The ruling matters because it directly targets how the case was used to obtain legal cover for tax/audit-related protections and the creation of a government-funded “Anti-Weaponization Fund,” which DOJ had announced months earlier.

What the judge said the lawsuit was for

According to the court’s order as described by AP, Williams said Trump manipulated the judicial process by suing a federal agency under his control—without the kind of real adversarial posture courts require. The judge said the effort was aimed at providing legitimacy to an agreement granting audit/tax-related immunity and channeling taxpayer money into a fund for people aligned with the President. The judge also emphasized that, even as a party to civil litigation, the President and the parties/lawyers are bound by the rules governing courts.

Background: DOJ’s “Anti-Weaponization Fund” plan

In a May 18, 2026 announcement, DOJ said the settlement framework created “The Anti-Weaponization Fund” to hear voluntary claims from people who said they suffered “weaponization and lawfare.” DOJ said the fund would receive $1.776 billion from the judgment fund (an appropriation used for certain DOJ settlements) and would send reports to the Attorney General on relief awarded. DOJ also said the fund would cease processing claims no later than December 1, 2028, and that any money left when the fund stops operations would revert to the federal government.

What Williams ordered on July 13

Williams’ sanctions and accountability steps include:

• Referred attorney Alejandro Brito to the Florida Bar for possible disciplinary action.
• Blocked Daniel Z. Epstein from seeking pro hac vice admission in the Southern District of Florida for one year (or until further order).
• Prohibited the parties from treating the purported deal like a “settlement”: the order bars referring to the “settlement agreement” and bars using, offering, admitting, or citing any of its provisions as evidence of a “settlement” in any judicial, administrative, regulatory, arbitration, or other official proceeding.

The judge also directed copies of the order to bar authorities in other jurisdictions where disciplinary proceedings were ongoing.

What changes now—and what’s still unclear

Immediately, the decision creates legal risk for anyone trying to rely on the settlement framework’s “settlement” label or its provisions as official “settlement” evidence.

At the same time, uncertainty remains about downstream effects. Axios reported that the administration abandoned the fund in June, though it also reported that the audit-immunity provision remained in place. AP likewise said the practical impact could be limited by the administration’s public statements that the fund had been abandoned.

What to watch next: whether any party appeals the July 13 order and/or seeks a stay, and whether the bar referrals lead to formal discipline.

Practical takeaway for readers

If you heard the settlement described as a court-validated “settlement” with enforceable protections, Williams’ order cuts against that framing—at least for how the purported agreement may be used in official proceedings.

Sources

• Associated Press
• Axios
• DOJ (Office of Public Affairs): Anti-Weaponization Fund announcement
• S.D. Florida July 13 order (Judge Kathleen M. Williams)

What the IRS says changed (and when)

The IRS guidance for individuals and workers lists “Page Last Reviewed or Updated: 01-Jul-2026.” The broader Working Families Tax Cuts hub lists “Page Last Reviewed or Updated: 06-Jul-2026.”

In a separate IRS Tax Tip, the agency also warns that some filing-season updates can apply retroactively to 2025—meaning your withholding or estimated tax may not match what you ultimately qualify to claim.

IRS items that can shift a 2025 refund or tax bill

The IRS’s individual-and-worker guidance highlights several provisions where eligibility (and documentation) matters. Depending on your situation, these can move the numbers behind your refund or tax due:

• Inflation-adjusted standard deduction for 2025: the IRS lists $31,500 for married couples filing jointly, $15,750 for single filers and married individuals filing separately, and $23,625 for heads of household.
• Additional deduction for seniors (effective 2025–2028): individuals age 65+ may claim an additional $6,000 deduction (phased out based on modified adjusted gross income).
• No tax on tips (effective 2025–2028): eligible tipped workers may deduct up to $25,000 for qualified tips (with specific reporting and eligibility rules).
• No tax on overtime (effective 2025–2028): eligible overtime pay can qualify for a deduction of up to $12,500 (or $25,000 for joint filers), if it meets the IRS requirements.
• No tax on car loan interest (effective 2025–2028): the IRS describes a deduction for qualified passenger vehicle loan interest up to $10,000, including that the loan originated after Dec. 31, 2024 and that you must include the VIN on your return when you claim the deduction.

Quick checklist before you file (or before you finalize a return)

• Check eligibility, not just your job title: the IRS provisions are conditional (for example, age, income phaseouts, and what counts as “qualified” tips, overtime, or vehicle-interest).
• Gather the specific documents: if you’re claiming items like qualified tips or overtime, make sure you have the IRS-described reporting you’ll need (commonly tied to how income is reported on tax forms).
• Re-check withholding/estimated-tax assumptions: if your refund or tax due surprises you, it may reflect that retroactive eligibility changed the deductions you can actually claim.

If your result is different from what you expected

The main household takeaway from the IRS warning is simple: because some changes can apply retroactively to the start of 2025, your withholding or estimated tax may not have been calibrated to your final eligible deductions and credits. If the outcome doesn’t match your expectation, consider updating future withholding (for W-4) or estimated tax so next year’s numbers better match your real tax situation.

Sources

• IRS newsroom: Working Families Tax Cuts – Individuals and workers

The change is the IRS’s administrative penalty relief called Automatic Exemption from Penalty (AEP), which the IRS says is replacing its prior First Time Abate (FTA) approach for the situations AEP covers.

What is AEP, and what actually changes?

The IRS says that if you file an eligible, original return late and/or pay the tax late, but you have a history of timely compliance, the IRS won’t assess certain penalties—including penalties for failure to file, failure to pay, or failure to make a deposit.

Practically, that can reduce “penalty-only” add-ons that can otherwise show up after processing, because—under AEP—the IRS says no penalty assessment is made for eligible cases.

When it starts: Summer 2026, with 2025 and 2026 filings

The IRS says AEP begins in Summer 2026 and relief starts with:

• 2025 tax year returns, and subsequent
• 2026 quarterly returns, and subsequent

The IRS also says you’ll know AEP was applied because you’ll receive a letter after your original return completes processing.

Who qualifies: the “timely compliance history” rule

Eligibility hinges on more than just being late this year. The IRS’s core rule is that, for the same return type, you generally must have:

• Timely filed for the prior three years (or 12 consecutive quarters for quarterly filers), and
• Either no penalty (except the estimated tax penalty) was assessed, or a penalty was assessed but later abated for reasonable cause or IRS error, and
• For business taxpayers, additional limits (including how often the IRS waived certain deposit penalties and whether the penalty was tied to EFTPS avoidance).

Which returns and penalties are covered

Eligible return series for AEP consideration include:

• Forms 1040, 1065, 1120
• Forms 940, 941, 943, 944, 945
• Form CT-1

Eligible penalty categories the IRS says are covered include:

• Failure to File (IRC 6651(a)(1) for tax returns; IRC 6698(a)(1) for partnership returns; IRC 6699(a)(1) for S corporation returns)
• Failure to Pay (IRC 6651(a)(2) and 6651(a)(3))
• Failure to Deposit (IRC 6656)

How you find out: an IRS letter, and no action required

The IRS says you’ll typically receive a letter explaining that, even if you filed late, paid late, or didn’t make a deposit timely, the applicable penalties weren’t assessed because of your timely compliance history.

The IRS also says you don’t need to contact or respond for AEP-covered penalties. If you see an assessed penalty and believe you should have qualified, the IRS says to contact the IRS.

What AEP does not do (important for “what I still owe”)

AEP is about penalty assessment/relief, not wiping out the underlying tax or every cost tied to a late return.

The IRS says you are still liable for any unpaid tax, interest, or other penalty assessments that aren’t subject to AEP relief.

The IRS also lists major situations where relief isn’t available, including:

• Returns filed once or infrequently (event-based filing requirements)
• The Daily Delinquency Penalty (DDP)
• Information reporting dependent on another filing

Interest still matters—and it’s handled differently than penalties

The IRS says it assesses interest on penalties, which increases what you owe until your balance is paid in full. But the IRS also says it will automatically reduce or remove the interest related to a penalty if your penalties are reduced or removed.

If you don’t qualify for AEP

If AEP doesn’t apply, the IRS says you may request penalty relief based on reasonable cause. In other words: AEP is designed to reduce the need for the “request it” pathway for eligible cases, but it doesn’t close every door for people who don’t meet the AEP rules.

Budget takeaway: if you usually file and pay on time but had a one-off late filing, payment, or deposit, AEP could reduce the penalty portion of your bill—but you won’t be able to confirm it until you see the IRS communication.

Sources

• IRS: Administrative penalty relief (AEP & FTA timeline, eligibility, exclusions)

The Advocate warns that missing the deadline can permanently block relief, even if the Kwong v. United States decision is ultimately upheld. In other words: if your situation falls within the Kwong framework, timing your claim may be as important as the underlying dispute.

What the July 10, 2026 cutoff is

The Advocate explains that, in most cases, taxpayers must file a claim for credit or refund within the later of three years from when they filed their return, or two years from when they paid the tax, penalty, or interest. But if, under the Kwong reasoning, affected returns or payments are treated as due on July 10, 2023, then July 10, 2026 becomes a critical deadline for many refund or protective claims.

The Advocate also stresses that relief is not automatic: many taxpayers may need to file a refund claim, amended return, original return, abatement request, or a protective claim to preserve their rights.

Who may be affected at the household level

According to the Taxpayer Advocate’s guidance, the potentially relevant group may include taxpayers who:

• Filed a return during the COVID-19 disaster relief postponement period and were assessed penalties or interest related to that return;
• Paid, or still owe, penalties or interest for filing or paying late during that period;
• Filed late international information returns; or
• Believe they may have missed other refund opportunities or refundable benefits for tax years affected by the COVID postponement period.

If Kwong-related reasoning ultimately applies to a particular taxpayer’s facts and the appropriate, timely claim is filed, relief described by the Advocate could include refunds or abatements of penalties and interest assessed for late filings or payments during the roughly 3.5-year COVID-19 period the court addressed. The Advocate also describes a potential spillover to some taxpayers who missed refund opportunities for tax years 2019 through 2022.

How to protect your rights (refund vs. protective claim)

The Advocate says taxpayers may need to take proactive steps depending on whether they need to change the underlying tax liability or just preserve the dispute while the law is unsettled.

For Kwong-related penalty and interest claims, the Advocate generally points taxpayers to Form 843, Claim for Refund and Request for Abatement. If a taxpayer needs to change income, deductions, credits, filing status, or other items that affect tax liability, the Advocate says they generally should file an original or amended return instead of using Form 843.

For some taxpayers with an IRS Online Account, the Advocate notes an online option to submit Form 843 electronically for claims related to fully paid interest and penalties. If filing by mail, the Advocate instructs taxpayers to label the Form 843 as related to Kwong v. United States.

A protective claim is also an option when the law is unsettled, and the Advocate says it can help preserve refund rights while awaiting final resolution.

What’s still uncertain

Even with a hard deadline, there is uncertainty about how relief will be delivered in practice. The Taxpayer Advocate Service report says the IRS may receive a significant volume of Kwong-related claims and that standardized processing steps have not yet been established.

The report also describes operational friction: many Form 843 submissions may be handled on paper and processed manually, potentially creating delays. It also notes taxpayers may not receive reliable online tracking after submitting paper claims, which could make it harder to time follow-up actions for household budgeting purposes.

What to do before July 10, 2026

• Review your COVID-19-era filing and payment timeline and identify any penalties or interest the IRS assessed during the postponement period.
• Compare your records to the Taxpayer Advocate’s description of potentially eligible situations under the Kwong framework.
• If you may need a claim to preserve rights, plan to submit it by July 10, 2026 and follow the Advocate’s Form 843 and labeling instructions.

For the most accurate steps, rely on the IRS and Taxpayer Advocate materials tied to the Kwong deadline and Form 843 requirements.

Sources

• IRS Newsroom: National Taxpayer Advocate issues 2026 mid-year report to Congress (introducing TAS priorities, including Kwong-related taxpayer-rights protection)
• National Taxpayer Advocate blog: “Act on or before July 10, 2026 to protect potential COVID-19 disaster relief refund claims”

Default fund at launch

At launch, Treasury said all contributions will go into State Street’s SPDR Portfolio S&P 500 ETF, known as SPYM. Treasury also named four additional low-cost index ETFs for later use: iShares Core S&P 500 ETF, Vanguard Total Stock Market ETF, State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF, and iShares Core S&P Total U.S. Stock Market ETF.

Those extra choices will not be available right away. Treasury said parents or guardians will be able to choose among them in the coming months, once the department turns on that feature.

Philanthropic stock path

Treasury and IRS also announced a process for accepting eligible donations of publicly traded stock. Under the new process, eligible philanthropic contributors may transfer approved stock to Treasury, which would then be contributed to Trump Accounts for eligible children under donor instructions and Treasury guidance.

The IRS guidance says Trump Accounts cannot be funded before July 4, 2026. It also says the federal government will make a one-time $1,000 contribution for each eligible child’s account, with annual contribution limits for individuals and employers. Money generally cannot be withdrawn before the year the child turns 18.

For families, the immediate takeaway is simple: the program is moving from announcement to implementation, but deposits have to wait until July 4. The next items to watch are the account-opening process, when the extra fund choices become available, and how Treasury handles the stock-contribution pathway in practice.

Sources

• U.S. Treasury: Treasury Announces Investment Lineup for Trump Accounts
• IRS: Working Families Tax Cuts guidance
• Associated Press: Trump Accounts launch — what to know