Tax News & Views Airs Postmark Grievances Roundup

Publication note: Tax News & Views will be taking December 24 and 25 off. Alex Parker will be here Friday with a Capitol Hill Recap. We hope you have a great holiday season!

A Simple Postmark Change Could Affect Your Taxes And Charitable Giving - Kelly Phillips Erb, Forbes:

For years, Americans have relied on a deceptively simple idea: when something important is mailed, it’s considered timely once it is received by the post office. This principle—often called the “mailbox rule”—has played a part in everything from tax compliance to court procedure to charitable giving. A recent change by the U.S. Postal Service (USPS) could change all of this.

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According to the USPS, because most postmarks are applied at processing facilities, they do not necessarily represent either the place at which, or the date on which, the Postal Service first accepted possession of the mail piece. This means the date stamped by a postmark applied at a processing facility may be later than the date the mailpiece was first accepted by the Postal Service.

The change, published in the Federal Register on November 24, 2025, is effective as of December 24, 2025.

The article explains that this complicates the "mailbox rule." This rule says that tax-significant events, such as return filing and the payment of taxes and deductible expenses, are deemed to occur on the postmark date. If that date is later than the day an item is dropped in the mailbox, it can result in a late filing or payment.

All the more reason to e-file tax returns and to make payments online.

Farms Sale Estimated Payment Relief

Taxpayers Get Penalty Relief for Farmland Sales - Trevor Sikes, Tax Notes ($):

Section 1062 allows a taxpayer to defer net income tax attributable to the gain on the sale or exchange of qualified farmland to a qualified farmer during the tax year. The deferral of income occurs in equal installments over four years.

However, if a taxpayer elects to defer income on a qualified farmland transaction under section 1062, they are not paying their full estimated tax payments for that year as generally required and can be subject to underpayment penalties under sections 6654 and 6655.

Subjecting a taxpayer that elects the farmland income deferral to penalties would “be contrary to the purpose of the section 1062,” the notice says. Thus, the notice states that the IRS will waive the applicable penalties for income that is properly elected and deferred under section 1062.

Sec. 1062, part of the OBBBA enacted this summer, is effective for qualifying sales of farmland in years beginning after July 4, 2025 - so starting in 2026 for most taxpayers.

To qualify, land that has been farmed or leased for farming by a taxpayer for 10 years can qualify if sold to an active farmer subject to a restriction that the land be used for farming for another 10 years.

Link: Notice 2026-3.

Refund Talk

Can’t stop talking about refunds - Bernie Becker, Politico:

Top Republicans keep pointing to enlarged refund checks as they seek to battle accusations that President Donald Trump and his team aren’t worried enough about voters’ concerns about costs and affordability. Trump himself made that same exact case in an even broader forum last week, during his televised address to the nation.

And comments like those might not be hyperbole, either. Republicans put more than a half-dozen tax relief items into place for 2025 during this summer’s megabill, after which the IRS declined to update withholding tables.

That means that beneficiaries of a larger standard deduction and new deductions for tipped income, overtime pay and seniors will reap any newfound profits through expanded refunds in the filing season that will start early next year.

The "declined to update withholding tables" is key. They kept taxpayer money to pay it back in an election year, without interest.

Senators Sound Alarm on IRS Readiness for Filing Season - Benjamin Valdez, Tax Notes ($):

“The Trump Administration’s relentless attacks on the IRS threaten its ability to serve the public and undercut its mission to provide taxpayers with top quality service and ensure that our tax laws are enforced with integrity and fairness,” Senate Finance Committee member Elizabeth Warren, D-Mass., and 16 other senators wrote in a December 21 letter to Treasury Secretary Scott Bessent and IRS Chief of Taxpayer Services Kenneth Corbin.

The senators cited a September report from the Treasury Inspector General for Tax Administration that highlighted the loss of employees in several key IRS operations, including submissions processing, return integrity and compliance services, accounts management, and field assistance.

In that report, TIGTA said the 18 percent reduction in return integrity employees threatens to allow nearly $360 million in fraudulent refunds to slip through the cracks. TIGTA also expressed concern that backlogged return inventories will carry over into 2026 and that cuts at taxpayer assistance centers will limit the filing season help taxpayers can receive.

Disclosure Discontents

The IRS Has a Chance to Fix Its Voluntary Disclosure Program - Andrew Leahey, Bloomberg ($):

The IRS voluntary disclosure program, intended to be a tool to bring tax cheats back into compliance, has become so punitive and high-risk that it undermines its own purpose.

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Revisions will be under public review until March 2026, making this the best time to fix what likely has become deterrent to compliance rather than a tool to achieve it—and to build a disclosure process that is fair, accessible, and effective.

To build on the proposed revisions, the IRS will still need to take meaningful additional steps: Relax rigid payment rules, scale back crypto reporting traps, and rethink its one-size-fits-all penalty structure. Unless these changes go deep, the program will continue to scare the wrong people away and chase tax cheats back into silence.

Dyeing for a Refund

Treasury, IRS announce forthcoming guidance on a new method for recovering federal excise tax paid on dyed fuel established under the One, Big, Beautiful Bill - IRS:

Taxpayers who paid tax on diesel fuel or kerosene and later removed the fuel from a terminal as eligible dyed fuel on or after Dec. 31, 2025, can submit a claim for refund, provided the following conditions are met:

1. The dyed fuel was previously taxed, and the tax was not credited or refunded.

2. The fuel is indelibly dyed by mechanical injection and removed from an approved terminal for a nontaxable use on or after Dec. 31, 2025.

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

Tariffs, Messes, Refunds

Tariff Refunds Would Be 'A Mess,' Economic Official Says - Natalie Olivo, Law360 Tax Authority ($):

It would be an "administrative problem" to issue tariff refunds in the aftermath of a potential U.S. Supreme Court ruling against the White House's trade measures, a top economic policy official said.

It's "pretty unlikely" that the Supreme Court is going to call for widespread tariff refunds, National Economic Council Director Kevin Hassettsaid Sunday during a CBS interview with journalist Margaret Brennan. In agreeing with Brennan that the process would be "a mess," Hassett said refunds in most cases would go to importers, but it would be "very complicated" to determine who should be cut a check.

Funny, they didn't have any problem collecting the tariffs.

Trump Is Raging at a Looming Supreme Court Loss on Tariffs. He’s Got a Point. - Ankush Khardori, Politico:

In terms of dealing with what has already transpired, we have seen a host of businesses — most notably Costco — file lawsuits to ensure that they can obtain refunds from the government in the event that the IEEPA tariffs are thrown out. One reason for this is to position themselves ahead in the line of companies that would receive refunds.

But another reason — one that has gotten comparatively little attention — is that the companies may not fully trust the Trump administration to manage the refund process in good faith without judicial oversight, according to Timothy Meyer, a law professor and expert on international trade law whom I first spoke with shortly after the very first round of IEEPA tariffs in February. In October, he published a white paper on what could happen if the Supreme Court rules against the Trump administration.

In particular, Meyer told me, Bessent and other members of the administration have spent months telling the public and the courts that refunding the IEEPA tariffs would lead to a fiscal calamity. The efforts by Bessent and others “to use refunds as a weapon in the litigation, kind of ham-handedly,” Meyer said, “has really just eviscerated any confidence that anyone would have that the administrative process would be administered efficiently, quickly and in good faith.”

Trump Order on Marijuana Rescheduling Doesn’t Cancel State Laws - Abraham Finberg and Simon Menkes, Bloomberg ($):

For now, cannabis remains under Section 280E of the Internal Revenue Code, which prohibits businesses trafficking in Schedule I or II substances from deducting ordinary business expenses. If cannabis officially moves to Schedule III, 280E no longer will apply to cannabis businesses, and operators can start taking standard deductions, slashing their tax burden.

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Section 280E’s language is clear that for businesses selling controlled substances prohibited by federal law “or the law of any State in which such trade or business is conducted,” deductions or credits don’t apply.

This means that even if cannabis is rescheduled federally, 280E will still apply on a federal level to businesses operating in states where cannabis remains illegal. The 280E ban on deductions is triggered by either federal or state illegality. If a state keeps cannabis as a Schedule I controlled substance, businesses in that state remain subject to 280E’s harsh tax treatment.

The article notes that even with rescheduling, legal cannabis businesses won't be out of the, um, weeds:

While the eventual rescheduling of cannabis will have positive tax implications, the country’s cannabis industry will still be out of compliance with the required federal treatment of a Schedule III controlled substance. This means that neither interstate commerce nor interstate banking and lending (the major banks) would automatically become available to cannabis.

Oops... I Got a K-1 Again

Britney Spears Disputes $720K IRS Bill In Tax Court - Kat Lucero, Law360 Tax Authority ($):

Britney Spears is challenging the IRS over the more than $720,000 it assessed against her in 2021, telling the U.S. Tax Court that the agency improperly increased income she received through her pass-through entity.

The Internal Revenue Service was wrong to find that the singer owed around $600,000, as well as a penalty of $120,000, for underreporting her share of the $1.4 million in income from an S corporation she owns, Shiloh Standing Inc., she said in a petition Dec. 18.

One more time: if the S corporation sends you a K-1 and you leave it off your return, the IRS will notice. I don't know whether this is what happened with Ms. Spears. It does happen surprisingly often.

Corporate Tax Rates Around the World, 2025 - Cristina Enache, Tax Foundation:

The countries with the highest corporate tax rates in the world are Comoros (50 percent), Puerto Rico (37.5 percent), France (36.13 percent), and Suriname (36 percent), while the countries with the lowest corporate rates are Turkmenistan (8 percent), Barbados, the United Arab Emirates, and Hungary (all at 9 percent). Fifteen jurisdictions do not impose a corporate tax.

Blogs and Bits

An Underused Tax-Free Investment Account Amps Up in the New Year - Ashlea Ebeling, Wall Street Journal:

On Jan. 1, millions more Americans across income levels will be eligible to open what is called an ABLE account.

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Previously, individuals had to be diagnosed with a disability that began before they turned 26 to be eligible. A law that goes into effect in 2026 raises that to age 46. That means 14 million Americans will be eligible, up from eight million today, according to the National Disability Institute.

Santa, Please Remember Taxpayers This Holiday Season - Erin Collins, NTA Blog. "Christmas Wish #3: Help the IRS Go Paperless (or as close as possible). To ensure future successful tax seasons, can you help the IRS go digital and move away from paper processing? Although the IRS is making progress on scanning and processing paper-filed tax returns electronically, way too much manual processing of paper returns remains."

As Wildfire Federal Tax Relief Expires, Victims Await Extension - Robert Wood, Forbes. "In late 2024, wildfire victims got a Christmas present from Congress when it passed a tax law to make many wildfire settlements tax free. The Federal Disaster Relief Act of 2023 covers many 2020 through 2025 wildfire legal settlements, but the law expires at the end of 2025."

A Top 10 List to Avoid

IRS-CI reveals top 10 cases of 2025 - IRS:

From tax evasion to cybercrime, IRS Criminal Investigation’s (IRS-CI) top cases of 2025 resulted in multiyear prison sentences and multimillion dollar financial settlements, highlighting the most significant criminal sentencings of year.

“Financial trails are criminals’ downfall. This year’s top 10 cases demonstrate how following the money exposed public corruption, complex tax and cyber schemes, and pandemic-era fraud, enabling us to hold criminals accountable for millions in illicit gains,” said IRS-CI Chief Guy Ficco.

Only one of the ten cases was strictly a tax case, involving a preparer known as "the Magician" for always generating refunds. Others involved embezzlement, money laundering, and other types of fraud. Cutting the IRS enforcement budget may well make fraud easier to get away with

What day is it?

Today marks Festivus, a holiday that was invented for a Seinfeld episode and that is marked by the airing of grievances and feats of strength. May your grievances be few and fully aired.

Tax News & Views Airs Postmark Grievances Roundup

Make a habit of sustained success.

Joe B. Kristan, CPA