Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of December 30, 2024 – January 3, 2025.
December 30, 2024: The IRS released Internal Revenue Bulletin 2025-1, which includes the following:
- Revenue Procedure 2025-1, which contains the revised procedures for letter rulings and information letters issued by the different associate chief counsel offices. This revenue procedure also contains the revised procedures for determination letters issued by the Large Business and International Division, the Small Business/Self-Employed Division, the Wage and Investment Division, and the Tax Exempt and Government Entities (TE/GE) Division.
- Revenue Procedure 2025-2, which explains when and how associate chief counsel offices should provide advice in technical advice memoranda (TAM) as well as taxpayers’ rights when a field office requests a TAM.
- Revenue Procedure 2025-3, which provides a revised list of Internal Revenue Code (Code) areas under the jurisdiction of the following associate chief counsel offices: Corporate; Financial Institutions and Products; Income Tax and Accounting; Passthroughs and Special Industries; Procedure and Administration; and Employee Benefits, Exempt Organizations, and Employment Taxes. These relate to matters in which the IRS will not issue letter rulings or determination letters.
- Revenue Procedure 2025-4, which provides guidance on the types of advice the IRS offers to taxpayers on issues under the jurisdiction of the IRS Commissioner, TE/GE Division, and Employee Plans Rulings and Agreements. It also details the procedures that apply to requests for determination letters and private letter rulings.
- Revenue Procedure 2025-5, which provides the procedures for issuing determination letters on issues under the jurisdiction of the Exempt Organizations Rulings and Agreements. It also explains the procedures for issuing determination letters on tax-exempt statuses for organizations applying under Code Section 501 or 521, private foundation status, and other determinations related to tax-exempt organizations. Additionally, the revenue procedure applies to revocation or modification of determination letters and provides guidance on the exhaustion of administrative remedies for purposes of declaratory judgment under Code Section 7428.
- Revenue Procedure 2025-7, which provides the areas under the jurisdiction of the associate chief counsel (international) in which letter rulings and determination letters will not be issued.
December 30, 2024: The IRS published Treasury Decision 10018, which contains final regulations regarding the filing of consolidated returns by affiliated corporations. They modify the consolidated return regulations to reflect statutory changes, update language to remove antiquated or regressive terminology, and enhance clarity. The IRS separately issued proposed regulations under which a transferee’s assumption of certain liabilities from a member of the same consolidated group will not reduce the transferor’s basis in the transferee’s stock received in the transfer.
December 30, 2024: The IRS published final regulations clarifying when tax-exempt bonds are considered retired for federal income tax purposes under Code Section 103. The regulations affect state and local governments issuing tax-exempt bonds and address significant modifications to bond terms or the acquisition and resale of bonds.
December 30, 2024: The IRS published final regulations on information reporting by brokers who regularly provide services for digital asset sales and exchanges. The regulations require brokers to file information returns and furnish payee statements reporting gross proceeds from digital asset transactions. The regulations also provide transitional penalty relief for brokers adapting to these new requirements. The regulations take effect February 28, 2025.
January 2, 2025: The IRS issued proposed regulations pertaining to the Code Section 5000D excise tax on the sales of certain drugs. The proposed regulations outline the imposition and calculation of the excise tax and would affect manufacturers, producers, and importers of designated drugs. The IRS also issued Revenue Procedure 2025-9, which provides a safe harbor and safe harbor percentage that a manufacturer, producer, or importer may use to identify applicable sales of a designated drug described in Section 5000D(b).
January 3, 2025: The IRS announced that on January 10, 2025, it will release final regulations for the Clean Hydrogen Production Tax Credit under Code Section 45V. The regulations will provide rules for:
- Determining lifecycle greenhouse gas emissions rates resulting from hydrogen production processes
- Petitioning for provisional emissions rates
- Verifying the production and sale or use of clean hydrogen
- Modifying or retrofitting existing qualified clean hydrogen production facilities
- Using electricity from certain renewable or zero-emissions sources to produce qualified clean hydrogen
- Electing to treat part of a specified clean hydrogen production facility as property eligible for the energy credit.
These regulations will affect all taxpayers who produce qualified clean hydrogen and claim the Clean Hydrogen Production Tax Credit, elect to treat part of a specified clean hydrogen production facility as property eligible for the energy credit, or produce electricity from certain renewable or zero emissions sources used by taxpayers or related persons to produce qualified clean hydrogen.
January 3, 2025: The IRS reminded disaster-area taxpayers who received extensions to file their 2023 returns that, depending upon their location, their returns are either due by February 3 or May 1, 2025:
- Taxpayers in Louisiana, Vermont, Puerto Rico, and the Virgin Islands and parts of Arizona, Connecticut, Illinois, Kentucky, Minnesota, Missouri, Montana, New York, Pennsylvania, South Dakota, Texas, and Washington have until February 3, 2025, to file their 2023 returns.
- Taxpayers in Alabama, Florida, Georgia, North Carolina, and South Carolina and parts of Alaska, New Mexico, Tennessee, Virginia, and West Virginia have until May 1, 2025, to file their 2023 returns. For these taxpayers, May 1 will also be the deadline for filing their 2024 returns and paying any tax due.
Eligible taxpayers include individuals and businesses affected by various disasters that occurred during the late spring through the end of 2024. The filing deadline extension for 2023 returns does not apply to payments.
Taxpayers who live or have a business in Israel, Gaza, or the West Bank and certain other taxpayers affected by the attacks in Israel have until September 30, 2025, to file and pay. This includes all 2023 and 2024 returns.
