IRS and Security Summit partners announce 10th Annual National Tax Security Awareness Week

IR-2025-118, Dec. 3, 2025

WASHINGTON —The Internal Revenue Service working with the Security Summit partners today announced that the 10th National Tax Security Awareness Week began this week to raise awareness about tax-related identity theft and scams as the holidays and the upcoming tax season approach.

The Security Summit is coalition of the IRS, state tax administrators, tax software companies, the tax professional community and others in the larger tax community, organized to combat tax-related identity theft through a public-private sector partnership that strengthened internal protections and raised awareness about security threats.

“With the holiday shopping season underway and tax season quickly approaching, we are urging taxpayers and tax professionals to take extra steps to protect their financial and tax information,” said IRS CEO Frank Bisignano. “During this holiday season, people face the heightened risk of identity theft as criminals ramp up efforts to trick people into sharing sensitive personal information: identity thieves might use this information to try filing false tax returns and stealing refunds.”

The work of the Security Summit to strengthen internal systems and share information across the tax system about fraudsters continues to show results. Since its inception, the work of the Security Summit has helped protect millions of taxpayers against identity theft and prevented billions of dollars from being wrongly paid out to fraudsters.

As the IRS and the Summit partners have strengthened their systems, identity thieves have increasingly turned their attention to stealing underlying tax and financial information from taxpayers, businesses, and tax professionals in hopes of slipping authentic-looking tax returns through the defenses.

The IRS and Summit partners continue to focus on combating identity thieves and their increasingly sophisticated scams. Identity thieves often impersonate the IRS and others in the tax community using fake emails, texts and online scams. These schemes frequently use recent tragedies or imitate charitable groups to coax people into sharing sensitive financial data, which can lead to tax-related identity theft.

There has been an increase of these activities on social media, including inaccurate tax advice that continues to mislead taxpayers. To help counter this, many of the Security Summit partners have joined together to form the Coalition Against Scam and Scheme Threats. This group will be increasingly active during the upcoming tax season.

A key tool in identifying and defending against these identity theft scams is the Identity Theft Information Sharing and Analysis Center, which was developed by the IRS and Security Summit partners to better identify and coordinate against fraudsters. As the group has strengthened defenses inside the tax system to spot emerging scams, identity thieves continue to look for new ways to obtain sensitive personal financial information to file fraudulent tax returns, making tax professionals and the sensitive tax information of their clients a target for scam artists.

Focus Areas

The IRS and Security Summit partners want taxpayers, tax professionals and businesses to be extra aware during the upcoming holiday season for the threats listed below.

• Social media scams: Bad tax advice on social media can mislead taxpayers about their credit or refund eligibility. Influencers may convince taxpayers to lie on tax forms or suggest the IRS is keeping a tax credit secret from them. Social media posts may put taxpayers in touch with scammers.
• Phishing and smishing: The IRS frequently warns against phishing emails and smishing texts, which are common tactics used by criminals to steal personal and financial information. The impersonator wants taxpayers to send them money. Opening links and attachments may harm their computer.
• Protection for seniors: Scammers target people over age 65 or nearing retirement for personal or financial information or money. Often, once seniors give them money, they ask for more. When scammers trick them to withdraw from their retirement account, it could affect their taxes.
• Protections for businesses and tax professionals: The IRS reminds tax professionals of their legal obligation to have a Written Information Security Plan and to use multi-factor authentication. Businesses are also advised to update their security measures and remain vigilant against cyberattacks.
• Identity Protection PIN: An identity protection PIN is a six-digit number that prevents someone else from filing a tax return using a taxpayers Social Security number or individual taxpayer identification number. If taxpayers don't already have an IP PIN, they may get an IP PIN as a proactive step to protect themselves from tax-related identity theft. Anyone with an SSN or an ITIN can get an IP PIN including individuals living abroad.

More resources

For more information on preventing tax information theft, visit Security Summit.

Victims of identity theft can visit Identity Theft Central.

Find additional information at Tax Scams.

Treasury, IRS issue guidance on Trump Accounts established under the Working Families Tax Cuts; notice announces upcoming regulations

IR-2025-117, Dec. 2, 2025

WASHINGTON – The Department of the Treasury and the Internal Revenue Service today issued a notice announcing upcoming regulations and providing guidance regarding Trump Accounts, which are a new type of individual retirement account (IRA) for eligible children.

Notice 2025-68 provides a general overview of how Trump Accounts work and addresses certain initial questions about creating initial and rollover Trump Accounts, the $1,000 pilot program contribution, other contributions – including qualified general contributions and section 128 employer contributions – eligible investments, distributions, reporting, and coordination with the rules applicable to other types of IRAs.

The Working Families Tax Cuts provides for establishing a Trump Account on behalf of every eligible child for whom an election is made, generally by a parent or guardian, and who has not turned age 18 before the end of the calendar year in which the election is made. Contributions to Trump Accounts cannot be made before July 4, 2026.

Additionally, the federal government will make a one-time $1,000 pilot program contribution to the Trump Account of each eligible child for whom an election is made, who is a U.S. citizen and who is born on or after Jan. 1, 2025, through Dec. 31, 2028.

Certain governmental entities and charities may also make qualified general contributions to Trump Accounts, if given to a qualified class of account beneficiaries. Other persons are also able to make contributions up to an aggregate limit of $5,000 per year. Furthermore, an employer may contribute to a Trump Account of the employee or the employee’s dependent up to $2,500 per year (which counts against the $5,000 annual limit) under an employer’s Trump Account contribution program, and the contribution will not count toward the employee’s taxable income. The annual contribution limits are indexed to inflation and will adjust starting after 2027.

The funds in Trump Accounts must be invested in certain mutual funds or exchange-traded funds that track the S&P 500 or another index of primarily American equities.

Amounts generally cannot be withdrawn from Trump Accounts before January 1^st of the calendar year in which the child turns 18 years old. After that point, the account generally is treated as a traditional IRA and generally is subject to the same rules as other traditional IRAs.

Today’s notice addresses certain areas of interest to prospective trustees of Trump Accounts and to those individuals, such as parents and guardians, who would like to establish and/or contribute to these accounts. The notice requests comments on numerous issues related to Trump Accounts.

The IRS is posting a draft version of Form 4547, Trump Account Election(s) to Draft tax forms. When final, the new form can be used to establish a Trump Account and to enroll in the pilot program.   

The IRS continues to provide updates and additional information related to the tax benefits from the Working Families Tax Cuts at IRS.gov.

Please visit http://trumpaccounts.gov for more information on Trump Accounts.

On Friday,  the IRS issued Notice 2025-69 which substantially relaxed employee requirements for taking the new tip and overtime deductions only for 2025. 2026 will still require reporting on the newly designed W-2, but this year’s deduction may rely on other methods and calculations.

Tip Deduction
For employees that do not have the tip amount reported correctly or completely, they may use the amounts on Box 7 of the W-2 or Form 4137 if employees, or their own tip logs if non-employees. Remember the tips need to have been reported as income to get the deduction, so if using a tip log make sure that the tip income was reported. 

Although the occupation of an employee receiving tips may not appear on the Form W-2 furnished to the employee in 2025, the employee is still responsible for determining whether the tips received by the employee were received in an occupation that customarily and regularly received tips on or before December 31, 2024. The Notice also provides transition treatment for the specified service trade or business rule, treating 2025 tips as eligible if the occupation customarily received them before 12/31/24.

Employers are not required to separately account to the IRS for cash tips on the written W-2, 1099, or other statements furnished to individuals for 2025.

Overtime Deduction
Because of the confusion regarding overtime reporting and potential employer inability to report the amounts, an employee that has not had qualified tips reported to them may use any reasonable method to estimate the tips, with the most common method being to use 1/3 of the amount reported on check stubs or other employer forms as overtime pay if the employer has not provided the qualified overtime amount.

Employers are not required to separately account to the IRS for overtime on the written W-2 or other statements furnished to individuals for 2025. As we previously noted in last week’s special newsletter, employer reporting of qualified overtime is the best approach to avoid employee issues.

Example 1:
Bob’s last pay stub for 2025 shows “overtime premium” of $10,000 paid in 2025 (which is
Bob’s overtime premium paid at a rate of two times the individual’s regular rate). For purposes of determining the amount of qualified overtime compensation received in tax year 2025, Bob may include $5,000 ($10,000 divided by 2).

Example 2:
Charlie works in law enforcement and is paid $15,000 of total annual overtime pay on a “work period” basis of 14 days. For purposes of determining the amount of qualified overtime compensation received in tax year 2025, Charlie may include $5,000 ($15,000 divided by 3).

Notice 2025-73 sets forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for September 2025 used under § 417(e)(3)(D), the 24-month average segment rates applicable for October 2025, and the 30-year Treasury rates, as reflected by the application of § 430(h)(2)(C)(iv). 

Notice 2025-73 will be in IRB: 2025-51, dated: December 15, 2025

Treasury, IRS provide guidance for individuals who received tips or overtime during tax year 2025  

IR-2025-114, Nov. 21, 2025

WASHINGTON — The Department of the Treasury and the Internal Revenue Service today issued guidance for workers eligible to claim the deduction for tips and for overtime compensation for tax year 2025. 

Notice 2025-69 clarifies for workers how to determine the amount of their deduction without receiving a separate accounting from their employer for cash tips or qualified overtime on information returns such as Form W-2 or Form 1099, as those forms remain unchanged for the current tax year.  It also provides transition relief to workers who receive tips in the course of a specified service trade or business. 

The IRS is in the process of updating income tax forms and instructions for taxpayers to use this filing season that will assist them in claiming these deductions.

No Tax on Tips

Under the One, Big, Beautiful Bill, workers may be eligible for new deductions for tax years 2025 through 2028 if they received qualified tips. For tipped workers, the maximum annual deduction is $25,000, which phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers).  

It is estimated that there are about 6 million workers who report tipped wages.

Examples of how the rules work for tipped employees

Today’s guidance provides examples to illustrate various situations tipped employees might encounter; below are abridged versions of some of those examples.

Waiter with reported tips in box 7, Form W-2

Ann is a restaurant server whose 2025 Form W-2, box 7 reports $18,000 of social security tips. Ann did not report any additional tips on Form 4137. Ann may use $18,000 in determining the amount of her qualified tips for tax year 2025.

Bartender with additional reported tips on Form 4137

Bob is a bartender who reports $20,000 in tips to his employer during the 2025 tax year on Forms 4070 and reports $4,000 of unreported tips on Form 4137, line 4. Bob’s 2025 Form W-2 reports $200,000 in box 1 and $15,000 in box 7.  Bob may use either the $15,000 in box 7 of the Form W-2, or the $20,000 of tips reported to Bob’s employer on Forms 4070 in determining the amount of qualified tips for tax year 2025.  Regardless of the option chosen, Bob may also include the $4,000 of unreported tips from Form 4137, line 4 in determining the amount of qualified tips.

Self-employed travel guide

Doug is a self-employed travel guide who operates as a sole proprietor. In 2025, Doug receives $7,000 in tips from customers paid through a third-party settlement organization (TPSO).  For tax year 2025, Doug receives a Form 1099-K from the TPSO showing $55,000 of total payments. The Form 1099-K does not separately identify the tips. However, Doug keeps a log of each tour that shows the date, customer, and tip amount received. Because Doug has daily tip logs substantiating the $7,000 tip amount, he may use the $7,000 tip amount in determining qualified tips for tax year 2025.

No Tax on Overtime

For tax years 2025 through 2028, individuals who receive qualified overtime compensation may deduct the pay that exceeds their regular rate of pay (generally, the “half” portion of “time-and-a-half” compensation) that is required by the Fair Labor Standards Act and reported on a Form W-2, Form 1099, or other specified statement furnished to the individual.

• Maximum annual deduction is $12,500 ($25,000 for joint filers).
• Deduction phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers).

The deduction is available for both itemizing and non-itemizing taxpayers.

Certain employees are exempt from the rules on overtime

Generally, the FLSA requires that most employees in the United States be paid at least the federal minimum wage for all hours worked and overtime pay at not less than time and one-half their regular rate of pay for all hours worked over 40 in a workweek. However, the law provides for certain exemptions.

Today’s guidance provides a series of examples illustrating situations that workers who receive qualified overtime might encounter. Today’s guidance does not affect any rights or responsibilities regarding tips or overtime compensation under the FLSA. Below are abridged versions of some of those examples.

Overtime examples

Andrew works overtime during 2025, and he receives a payroll statement from his employer that shows $5,000 as the “overtime premium” that he was paid during 2025. Andrew may include $5,000 (the FLSA overtime premium) to determine the amount of qualified overtime compensation received in tax year 2025.

Assume the same facts as in the first example except that Andrew’s payroll statement shows a total “overtime” amount of $15,000, which is the total amount Andrew was paid for working overtime (the FLSA overtime premium combined with the portion of his regular wages). Andrew may include the $5,000 FLSA overtime premium, computed by dividing $15,000 by 3 in determining the amount of qualified overtime compensation for 2025.

Brad’s employer has a practice of paying overtime at a rate of two times an employee’s regular rate of pay, and Brad was paid $20,000 in overtime pay during 2025. Brad’s last pay stub for 2025 shows “overtime” of $20,000 paid in 2025. For purposes of determining the amount of qualified overtime compensation received in tax year 2025, Brad may include $5,000 ($20,000 divided by 4).                                              

Carol is a covered, nonexempt employee under the FLSA and works in law enforcement and is paid $15,000 of overtime pay on a “work period” basis of 14 days that complies with the FLSA. See Fact Sheet #8: Law Enforcement and Fire Protection Employees Under the Fair Labor Standards Act (FLSA) | U.S. Department of Labor. For purposes of determining the amount of qualified overtime compensation received in tax year 2025, Carol may include $5,000 ($15,000 divided by 3).

Diane works for a State or local government agency that gives compensatory time at a rate of one and one-half hours for each overtime hour worked. In 2025, Diane was paid wages of $4,500 for compensatory time off based on that overtime. To determine the amount of qualified overtime compensation received in tax year 2025, Diane may include $1,500, one-third of these wages, for purposes of determining the qualified overtime compensation deduction.

Notice 2025-69 provides guidance to individual taxpayers who are eligible for the federal income tax deductions for qualified tips or qualified overtime compensation for tax year 2025. These new deductions were added by Public Law 119-21, 139 Stat. 72 (July 4, 2025), commonly known as the One, Big, Beautiful Bill Act (OBBBA). As part of the phased implementation of the OBBBA, there will be no changes to the 2025 Form W-2, Form 1099-NEC, Form 1099-MISC, or Form 1099-K to account for the new reporting requirements in the OBBBA. As a result, employers and other payors will not be required to separately account for cash tips or qualified overtime compensation on those forms furnished to individuals for 2025. In the absence of this information reporting, this Notice provides guidance for individual taxpayers on how to satisfy the requirements for the deductions, including how to determine the amount of the qualified tips or qualified overtime compensation, for tax year 2025. This Notice also provides transition relief for taxpayers regarding the requirement that qualified tips must not be received in the course of a trade or business that is a specified service trade or business. This Notice does not affect any rights or responsibilities regarding tips or overtime compensation under the Fair Labor Standards Act of 1938, as amended.

Notice 2025-71 provides interim rules under section 139L to clarify the partial exclusion from gross income of interest received by qualified lenders on loans secured by rural or agricultural property. The interim guidance defines key terms in section 139L and establishes standards for determining whether a loan is secured by rural or agricultural property. The interim guidance includes a safe harbor, which allows qualified lenders to treat a loan as secured by rural or agricultural property if certain parameters are met. The interim guidance also provides rules regarding refinancings.

Notice 2025-71 will be in IRB: 2025-50, dated: December 8, 2025

Treasury, IRS issue guidance on tax benefit for lenders on loans secured by farm or rural property under the One, Big, Beautiful Bill

IR-2025-113, Nov. 20, 2025

WASHINGTON – The Department of the Treasury and the Internal Revenue Service today issued guidance for a new tax benefit for certain lenders that make loans secured by rural or agricultural real property. Notice 2025-71 provides interim guidance that taxpayers may rely on until the Treasury Department and the IRS issue forthcoming proposed regulations.

OBBB added section 139L to the Internal Revenue Code, which allows certain lenders to exclude from gross income 25% of the interest they receive from loans secured by rural or agricultural real property. The interim guidance provided today defines key terms from section 139L, establishes standards for determining whether a loan is secured by rural or agricultural property, and provides rules regarding refinancings.

Interested parties are requested to submit comments about the notice to assist in the drafting of the forthcoming proposed regulations. Comments may be submitted through www.regulations.gov (type IRS-2025-0400 in the search field) or by mail, to Internal Revenue Service, CC:PA:01:PR (Notice 2025-71) Room 5503, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044.

For more information, please see the One, Big, Beautiful Bill provisions page on IRS.gov.

Inside This Issue

1. Reminder: Data Breach – You Might Be Next! What to Look For & How to Protect Yourself
2. Continuing Education Seminars Available on IRS Nationwide Tax Forum Online
3. 401(k) and IRA Contribution Limits Increased for 2026
4. Educate Yourself about Education Tax Benefits
5. Technical Guidance

1.  Reminder: Data Breach – You Might Be Next! What to Look For & How to Protect Yourself

IRS representatives continue hosting sessions to help educate tax professionals about warning signs and steps to take to prevent data breaches.

Sessions will be held on:

• Wednesday, November 19, 2025
• Tuesday, November 25, 2025

Join either day at one of the times listed below:

• Noon ET (11 a.m. CT, 10 a.m. MT, 9 a.m. PT) or
• 3 p.m. ET (2 p.m. CT, 1 p.m. MT, noon PT)

All sessions are 30 minutes long.

There’s no need to register for the briefings. Just join by clicking the link for the Microsoft Teams Meeting. All sessions use the same link.

IRS Speakers:

• Glenn Gizzi, senior tax analyst, Data Breach
• Mark Henderson, information technology specialist, Cybersecurity

Topics include:

• Practitioner Scams: IRS Cybersecurity will describe the most prolific scams for which practitioners should watch. See sample scam emails and learn about different ways scammers attempt to steal your clients’ information.
• Data Breaches: The IRS Data Breach program lead will describe what happens when you experience a data breach; the next steps involved; and the resources available to you, such as the Written Information Security Plan (WISP).
• Identity Protection PIN: Learn how you can help yourself and your clients protect federal tax return information.
• How This Affects You: Learn how your local area is affected by scams and data breaches.

Participants will receive helpful links to help themselves and their clients.

Please note: CE/CPE will not be granted for these sessions.

If you have a data breach/scam question, please email StakeholderLiaison@irs.gov in advance of the program.

Back to top

2.  Continuing Education Seminars Available on IRS Nationwide Tax Forum Online

The IRS encourages tax professionals to register for the IRS Nationwide Tax Forum Online to get access to 15 seminars recorded at the 2025 IRS Nationwide Tax Forum. The Nationwide Tax Forum Online offers tax professionals a convenient way to stay informed about current legislation, IRS procedures and key topics for the upcoming tax season.

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

Back to top

3.  401(k) and IRA Contribution Limits Increased for 2026

The IRS announced cost-of-living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2026. Tax professionals can share these limits with their clients to assist with retirement planning.

The amount individuals can contribute to their 401(k) plans in 2026 increases to $24,500, up from $23,500 for 2025. This annual contribution limit also applies to employees who participate in 403(b) plans, governmental 457 plans and the federal government’s Thrift Savings Plan.

The limit on annual contributions to an IRA increases to $7,500 from $7,000. The SECURE 2.0 Act of 2022 amended the IRA catch-up contribution limit for individuals aged 50 and over to include an annual cost-of-living adjustment increase to $1,100, up from $1,000 for 2025.

Also, the income ranges for determining eligibility to make deductible contributions to traditional Individual Retirement Arrangements (IRAs), to contribute to Roth IRAs and to claim the Saver’s Credit all increased for 2026.

All cost-of-living adjustments affecting dollar limitations – including phase-out limitations – for pension plans and other retirement-related items for tax year 2026 appear in Notice 2025-67.

Back to top

4.  Educate Yourself about Education Tax Benefits

Tax professionals can refresh their knowledge about tax benefits for education by visiting the information center on IRS.gov. It includes overviews of scholarships, education credits, deductions, savings plans and more.

To prepare for the upcoming filing season, tax professionals may want to educate their clients with student dependents about these topics.

Back to top

5.  Technical Guidance

Interest rates will remain the same for the calendar quarter beginning Jan. 1, 2026.

The rates are:

• 7% for overpayments (payments made in excess of the amount owed), 6% for corporations
• 4.5% for the portion of a corporate overpayment exceeding $10,000
• 7% for underpayments (taxes owed but not fully paid)
• 9% for large corporate underpayments

The rates are compounded daily.

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rates are the federal short-term rate plus 3 percentage points.

Generally, in the case of a corporation, the underpayment rate is the federal short-term rate, plus 3 percentage points, and the overpayment rate is the federal short-term rate, plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate, plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate, plus one-half (0.5) of a percentage point.

The interest rates above are computed from the federal short-term rate determined during October 2025.

See Revenue Ruling 2025-22 for details. The revenue ruling will appear in Internal Revenue Bulletin 2025-48, dated Nov. 24, 2025.

CORRECTED version of IR-2025-112: Yesterday's newswire incorrectly stated the interest rate for corporate overpayments exceeding $10,000; the correct interest rate is 4.5%.

Interest rates remain the same for the first quarter of 2026 

IR-2025-112, Nov. 13, 2025 

WASHINGTON — The Internal Revenue Service today announced that interest rates will remain the same for the calendar quarter beginning Jan. 1, 2026. 

For individuals, the rate for overpayments and underpayments will be 7% per year, compounded daily. 

The rates are as follows:

• 7% for overpayments (payments made in excess of the amount owed), 6% for corporations.
• 4.5% for the portion of a corporate overpayment exceeding $10,000.
• 7% for underpayments (taxes owed but not fully paid).
• 9% for large corporate underpayments.

 

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rates are the federal short-term rate plus 3 percentage points. 

Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point. 

The interest rates announced today are computed from the federal short-term rate determined during October 2025. See the revenue ruling for details. 

Revenue Ruling 2025-22 announcing the rates of interest will appear in Internal Revenue Bulletin 2025-48, dated Nov. 24, 2025.