Show Notes
Treasury & IRS Guidance on Tipped Occupations (One, Big, Beautiful Bill) Context: Guidance issued under the “no tax on tips” provision of the One, Big, Beautiful Bill. Proposed regulations identify which occupations customarily receive tips and define what counts as qualified tips eligible for deduction. Nearly 70 occupations are listed, ranging from bartenders to water taxi operators. Occupation Categories (Treasury Tipped Occupation Codes): 100s – Food & Beverage Service 200s – Entertainment & Events 300s – Hospitality & Guest Services 400s – Home Services 500s – Personal Services 600s – Personal Appearance & Wellness 700s – Recreation & Instruction 800s – Transportation & Delivery Definition of Qualified Tips: Must be cash or cash-equivalent, e.g., check, card, gift card, electronic payment (excluding most digital assets). Must be voluntary customer payments, or received via mandatory/voluntary tip pools. Cannot be service charges automatically added to bills (e.g., a restaurant’s 18% charge for large parties). Excludes illegal activity-related payments. Public Input: Comments due by Oct. 23, 2025, submitted via Regulations.gov. Effective Impact: Clarifies which workers can benefit from tip deductions. Narrows definition of qualified tips to ensure compliance and prevent abuse.
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IRS Reminder for Oct. 15 Filing Deadline (IR-2025-104) Date: Oct 14, 2025. Applies to tax year 2024 returns for those who filed extensions. Deadline: Oct 15 (midnight). IRS urges e-filing and electronic payments; paper filers can use Form 1040 and instructions for mailing addresses. Government shutdown note: Filing and payment obligations remain in effect; IRS will accept/process payments by mail or electronically. Possible extensions:
IRS Inflation Adjustments for Tax Year 2026 (IR-2025-103) Applies to 2026 returns filed in 2027; detailed in Revenue Procedure 2025-32. Standard deduction (2026): $32,200 MFJ; $16,100 Single/MFS; $24,150 HOH. Note: OBBB set 2025 SD at $31,500 MFJ; $15,750 Single/MFS; $23,625 HOH. Marginal brackets (Single; MFJ): 37% over $640,600; $768,700. 35% over $256,225; $512,450. 32% over $201,775; $403,550. 24% over $105,700; $211,400. 22% over $50,400; $100,800. 12% over $12,400; $24,800. 10% up to $12,400; $24,800. AMT exemption (2026): $90,100 Single (phaseout starts $500,000); $140,200 MFJ (phaseout starts $1,000,000). Estate tax exclusion: $15,000,000 (up from $13,990,000 in 2025). Adoption credit: Up to $17,670; up to $5,120 refundable. Employer-provided childcare credit (for employers): Max increased to $500,000 ($600,000 for eligible small businesses) under OBBB. Other indexed items: Unindexed items:
Treasury/IRS Penalty Relief for Remittance Transfer Providers (IR-2025-102) Date: Oct 7, 2025. IRS issues Notice 2025-55 granting limited deposit penalty relief for the first three quarters of 2026 related to the new remittance transfer excise tax under the One, Big, Beautiful Bill (OBBB). Relief conditions: Providers avoid deposit penalties if they make timely deposits (even if miscalculated) and pay any underpayment by the Form 720 due date for that quarter. Safe harbor: Providers may use excise tax deposit safe harbor rules for Q1–Q3 2026 despite underpayments, but must meet the reasonable cause standard. Tax details: Starting Jan 1, 2026, providers must collect a 1% tax on certain remittances made with cash, money orders, cashier’s checks, or similar instruments; make semimonthly deposits; and file quarterly returns. First deposit due Jan 29, 2026. More info: See Notice 2025-55 and Form 720 guidance.
Jarod Koopman to Lead IRS Enforcement (Acting CTCO) Jarod Koopman named Acting Chief Tax Compliance Officer, overseeing enforcement divisions: LBI, SB/SE, TE/GE, Criminal Investigation (CI), Office of Professional Responsibility, Return Preparer Office, and Whistleblower Office. Background: CI executive since 2016; built Cyber Crimes and Cyber and Forensics Services; led IRS-CI’s growth in crypto tracing and dark web investigations. Field leadership: Former ASAC in Chicago and SAC in Detroit; managed sensitive, high-profile cases in MI and IL. Earlier roles: Supervisory Special Agent (W.D.N.Y.), Senior Analyst at IRS HQ (ASLP graduate), worked on identity theft as a national priority in 2012. Bio: Upstate NY native; Nazareth University graduate; FLETC and IRS-CI training top graduate. Additional leadership move: Stewart Pearlman to serve as acting Deputy Chief in CTCO; prior roles include acting Deputy COO, ACA IT team lead, CIO Chief of Staff, and Procurement Chief of Staff (2019–2025).
IRS Appeals Launches Post Appeals Mediation (PAM) Pilot The IRS Independent Office of Appeals launched a two-year pilot to make PAM more attractive to taxpayers. Under the pilot, mediation cases are reassigned to an Appeals team not connected to the original case to provide a fresh, expedited look; other PAM features remain unchanged. PAM occurs after an unsuccessful Appeals process and typically lasts one day, with a neutral Appeals mediator; taxpayers may add a co-mediator at their expense. Goal: enhance ADR offerings, improve taxpayer experience, and encourage faster, mutually acceptable resolutions before potential litigation. Appeals also promotes broader use of its five ADR programs: Fast Track Settlement, Fast Track Mediation—Collection, PAM, Rapid Appeals Process, and Early Referral. Contact for questions: [email protected].