IRS Proposes New Regulations for 2025 Tax Season

The IRS and Treasury Department have proposed new regulations aimed at corporate separations and reorganizations, intended to enhance the agency's ability to oversee tax-free treatments and improve transactional flexibility for corporations. The proposed guidance includes a new Form 7216 that filers must attach to their federal income tax returns, providing detailed information about multi-year corporate separations. Additionally, the IRS announced stricter regulations for the 2025 tax season to combat scams and fraudulent claims, emphasizing enhanced oversight and new reporting requirements, particularly for fuel tax credits. These changes are designed to protect taxpayers and improve the integrity of the tax system amidst rising fraudulent claims. The IRS plans to issue updated procedures incorporating these regulations and has called for public comments on the proposed changes. The agency is also updating rules for tax professionals under Circular 230 to ensure compliance and adherence to ethical standards.