Key Takeaways
- Clean Fuel Production Regulations
- Government Funding
- Trump Tax Break Woes
- IRS Disorganized?
- Backlog of Retirement Apps at IRS
- In the Courts
- Women’s Sports
Clean Fuel Production Regulations
Long-Awaited Clean Fuel Production Credit Regs Have Arrived – Trevor Sikes, Tax Notes ($):
The proposed regs (REG-121244-23), issued February 3 by Treasury and the IRS, also establish an extensive framework of rules for how to claim the credit, register as a fuel producer with the IRS, and provide documentation verifying the accuracy of the claim.
IRS Floats Clean Fuel Credit Rules With Foreign Restrictions – Kat Lucero, Law 360 ($):
The 170-page set of proposed regulations also addressed the sales attribution for fuel sold through related intermediaries, double-counting of other energy-related credits and the easing factors measuring greenhouse gas emissions rate under changes the budget law made to the credit, the U.S. Treasury Department and IRS said in a release.
Biofuels Notch Win With IRS Proposal, Await Further Guidance – Erin Schilling, Bloomberg ($):
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Fuel producers are still waiting on the Department of Energy to release an updated model for taxpayers to use when calculating their emissions rates for the fuel, which will dictate the value of the credit.
Trump plan confirms farm GHG cuts in clean fuels tax credit – Marc Heller, PoliticoPro:
The Treasury Department released a draft of proposed regulations for the tax credit, in Section 45Z of the tax code, reasserting that farm practices that reduce greenhouse gas emissions will count toward eligibility.
But some key aspects of the credit remain to be worked out, including the finer points of how the benefits of those practices are calculated. The modeling the government uses will determine, for instance, whether ethanol made from corn qualifies as a greenhouse gas-reducing product eligible for the credit.
Regulations: REG-121244-23
Government Funding
Trump Signs Funding Deal With IRS Cuts – Cady Stanton, Tax Notes ($):
Trump signed the measure into law February 3 after the House voted 217-214 to advance the five-bill fiscal 2026 appropriations minibus alongside a stopgap funding bill for the sixth remaining funding legislation focused on the Department of Homeland Security. About 20 Democrats joined the majority of Republicans in supporting the deal negotiated by the Senate and White House.
House Passes Funding Package With $11.2B IRS Budget – Asha Glover, Law 360 ($):
The House voted 217-214 to approve the Senate's amendments to H.R. 7148 and pass a massive funding package that would fund several government departments for the 2026 fiscal year. In addition to cutting IRS funding by 9% compared with last year, the bill would cut $11.7 billion from the IRS spending boost included in the Inflation Reduction Act.
US Shutdown Ends as Trump Signs His Funding Deal With Democrats – Erik Wasson, Alicia Diaz, Caitlin Reilly, and Matt Shirley, Bloomberg ($):
Trump applauded the funding package as “a great victory for the American people” and stressed that the legislation continues to fund deportation flights, which have provoked backlash from Democrats.
Federal Workers Win Another Layoff Reprieve in DHS Funding Bill – George Weykamp, Bloomberg ($):
The bill, approved by Congress Tuesday, extends language negotiated as part of the November funding deal that prevents the Trump administration from using federal funds to carry out any widespread reductions in force.
Trump Tax Break Woes
Those new tax breaks Trump is touting come with a catch – Brian Faler, Politico:
…
Republicans are counting on those benefits from their new tax law to drive up refunds this year, hoping they’ll be rewarded at the ballot box in November. But unlike familiar and relatively easy-to-understand breaks like the Child Tax Credit, President Donald Trump’s new provisions come with fine print that could frustrate taxpayers.
IRS Disorganized? *Scoff*
Will the IRS be disorganized this tax season? Here are 3 issues to watch. – Michelle Singletary, Washington Post:
This year, the IRS expects about 164 million individual returns to be filed by the April 15 deadline.
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“More recent filing seasons have demonstrated meaningful improvement,” National Taxpayer Advocate Erin Collins said in her annual report to Congress.
Backlog of Retirement Apps at IRS
House Dems Press Bessent About IRS Retirement Pay Delays – Asha Glover, Law 360 ($):
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The lawmakers asked Bessent to provide information including how many IRS employees chose to take the deferred resignation option, how many applications the agency has reviewed and how many applications were awaiting processing at the end of 2025. They asked for a response by Feb. 17.
Ways and Means Democrats Probe IRS Retirement Backlog – Benjamin Valdez, Tax Notes ($). “A group of House taxwriters urged Treasury to detail the status of the backlog of retirement applications at the IRS, which is creating lengthy annuity payments delays for former employees.”
In the Courts
Appellate Ruling Poised to Spark Self-Employment Tax Refund Wave – James Matheson, Bloomberg ($). “Ultra-wealthy partnerships in certain states have a new opportunity to seek retroactive refunds thanks to a recent Fifth Circuit court ruling that broadened a self-employment tax exception, though taxpayers in other regions of the US must wait to see if other courts follow suit.”
Tax Court Slices and Dices Chicken Research Credit Claim – Nathan J. Richman, Tax Notes ($). “Some of a poultry production company’s attempts to improve the health of its chickens qualified for the research credit, but others didn’t or were unsubstantiated, the Tax Court concluded.”
Tax Court Allows Some Credits For Co.'s Chicken Research – Anna Scott Farrell, Law 360 ($). “The owner of a poultry processing business is entitled to some of the tax credits he claimed for his company's chicken research, the U.S. Tax Court ruled Tuesday, disagreeing with the Internal Revenue Service's position that the work was routine and ineligible for a tax break.”
Court Rejects Easement Investors’ Bid to Thwart Settlement – Kristen A. Parillo, Tax Notes ($). “A group of syndicated conservation easement investors who object to an IRS settlement approved by the tax matters partner (TMP) gave no good reason for waiting until the last minute to ask to participate in the case, the Tax Court held.”
Tax Court Bars Partners From $49M Easement Suit – Anna Scott Farrell, Law360 ($). “A group of partners lost their chance to participate in a lawsuit challenging the IRS' rejection of their $49 million tax deduction for donating a conservation easement after their partnership brokered a settlement, the U.S. Tax Court said Tuesday.”
Penalties Challenge Was Too Little, Too Late, Tax Court Rules – Trevor Sikes, Tax Notes ($). “The Tax Court upheld the IRS’s rejection of a taxpayer’s abatement request for assessed penalties and interest, even considering his former return preparer’s crimes.”
What Day is it?
Today is National Girls and Women in Sports Day! “Keep supporting, celebrating, and inspiring others by being fearless and playing like a girl, because what better way is there to play?” Looking for a way to celebrate this day?? Start by watching women’s sports, because everyone is!
Make a habit of sustained success.
