Season's Greetings from the Beverly & Bucker Team!
We hope that everyone has a wonderful holiday season and greets this time of year in good health. As we approach the 2025 tax filing season, our office would like to provide updates and information on upcoming changes. Please use this Newsletter and the Links available on our Website to stay up-to-date.
Tax Season will begin on January 26th, 2026. We encourage all of our clients who require a face-to-face appointment to call now to ensure that your preferred time and date are available. Please note that we book up quickly! Call our office at (540) 371-0691 to schedule.
As in years prior, clients who received $600 or more through cash-sharing apps like Venmo, Zelle, and PayPal will receive a Form 1099-K by mail or through the app. If you receive this form, please include it with your tax documents as we will not be able to complete your return without it. If you believe you received $600 or more through a cash-sharing app but did not receive a Form 1099-K, please contact the company. Please be prepared to explain where the funds came from and what they were used for to determine how the amount should be applied on the Tax Return.
For our Virginia clients who are over the age of 55 and receive military retirement, you may be able to claim a subtraction for certain military benefits of up to $10,000. This means that qualifying recipients may receive up to $10,000 of military retirement pay tax-free. Qualifying benefits include military retirement income received for service in the US Armed Forces or paid to the surviving spouse of a veteran under the Survivor Benefit Plan program. If you have questions concerning this change, please contact our office or consult the Virginia Department of Taxation website.
Now that we've covered changes in tax code, here's what you can expect in our office. As we continue to prioritize the safety of our staff and clients this cold and flu season, we encourage anyone who does not require a face-to-face appointment to use our Drop Off option. Many of our clients used this method for the first time during the pandemic and found that it was easier and much faster than waiting for an available appointment time. The Tax Return will be prepared in your absence and our staff will contact you when it has been completed. If you are dropping off your Tax Return but would still like to discuss your concerns with a Tax Preparer, a Phone Appointment option is now available! To schedule a Phone Appointment, please contact our office or select the Phone Appointment option on our website when scheduling. Due to IRS guidelines, we are not able to use online phone call platforms such as Zoom, FaceTime, Google Chats, or Signal. These third-party calling platforms do not provide the level of security required for discussing sensitive personal information. For clients who are able to Drop Off Tax Documents, we would like to make sure you are aware of our variety of Drop Off methods.
Drop Offs:
Tax Documents can be mailed to our office, dropped off with our staff during our office hours, or dropped off after hours via the mail slot beside our front door. We also have a contact-free, digital option available. If you would like to virtually submit your documents, please contact our office via phone or email to request a link to our secure, Document Sharing Portal. Upon request, a link will be sent to you via email. This link will be randomly generated and, for your security, should not be shared. Once you have received the link, you will be able to upload your documents to our Secure Portal, at which point our staff will be notified and will be able to view your documents to prepare your Tax Return. Please do not email sensitive documents to our office or submit them via Facebook. These are not secure options to submit sensitive information. If you have any questions concerning our Digital Drop Off method or any of our other methods for receiving documents, please let us know. When mailing documents, we request that you mail copies, not original documents. Original documents that are lost in the mail are difficult to replace so, if possible, please only mail copies.
No matter how you Drop Off this year, please include your Name, Phone Number, Address, and a list of any changes in family structure such as Marriage, sale of a property, or changes in the number of Dependents. If you have questions concerning what documents to include when dropping off, our staff will be more than happy to assist.
Appointments:
For our clients who necessitate a face-to-face appointment, please schedule either through our website or by phone. We ask that if you or someone in your household is experiencing Covid-related symptoms to please wear a mask during your appointment. Our front desk staff will have extras available. If you or someone in your household has tested positive for Covid-19 or RSV within four days of your appointment, please contact our office to reschedule.
Client Organizers:
Client Organizers are available! These are helpful tools that list what documents we will require to prepare your Tax Return. Client Organizers are based off of the information you provided to our office for the prior Tax Year, so they will not include any information that has changed since we last saw you. With Client Organizers, we will include an additional checklist that outlines any changes in Tax Code for the upcoming year. If you are new to our office this year, welcome! We have blank Client Organizers available for you in our office and on our website in "Info Center." While they will not have a list of documents that you have used for prior Tax Returns, they will have a summation of documents you may need to bring in depending on your needs. If you have any questions or would like to request a Client Organizer, please contact our office.
I would like to, once again, thank our amazing clients. Our team is excited to assist with the approaching tax season and we're looking forward to seeing everyone. We hope everyone has a great New Year and we look forward to working together in 2026!
Ryan Beverly E.A.
Beverly & Bucker Inc.
NEW YORK—The Internal Revenue Service needs to find ways to better communicate how it is handling technology modernization and transformation, including in areas such as the use of artificial intelligence in its processes, agency Office of Internal Consulting Chief Joseph Zeigler said.
NEW YORK—The Internal Revenue Service needs to find ways to better communicate how it is handling technology modernization and transformation, including in areas such as the use of artificial intelligence in its processes, agency Office of Internal Consulting Chief Joseph Zeigler said.
Speaking during a plenary session August 18, 2026, at the IRS Nationwide Tax Forum, Zeigler said it is his “hope that the IRS is going to a better job of telling this story” about how the agency is using technology to help improve its operations and make lives easier for taxpayers and the tax professionals who assist them.
As an example, Zeigler specifically highlighted some of the work the agency is doing with AI.
“When we talk about AI, AI is not meant to replace bodies or people and computers doing the work and there is no human input,” he said. Rather it is about how the IRS “can give our employees tools and resources [and] technology to make them better, more efficient” and improve the quality of their work. “All of those things is what I believe that AI and technology were meant for.”
He continued: “It’s taking our world-class employees and putting them on steroids, giving them the ability to come to the right answer sooner.”
And at the end is the ultimate goal of making the taxpayer experience that much better and more in line with what they expect from their customer interactions with the private sector.
“If we can come to an answer that right the first time, and we can come to it quick, and we can report it to the taxpayer [and say] here’s what’s going on,” he said. “All those things are at our fingertips.”
The IRS issued guidance in the form of sample forms and proposed rollover procedures to simplify, standardize, and expedite the completion of direct rollovers to or from a retirement plan. The guidance is designed to comply with Section 324 of the SECURE 2.0 Act (P.L. 117-328). Use of the sample forms and proposed rollover procedures is optional.
The IRS issued guidance in the form of sample forms and proposed rollover procedures to simplify, standardize, and expedite the completion of direct rollovers to or from a retirement plan. The guidance is designed to comply with Section 324 of the SECURE 2.0 Act (P.L. 117-328). Use of the sample forms and proposed rollover procedures is optional.
The IRS indicates that these sample forms are not inftended to be used for rollovers and transfers between IRAs. According to reports made by the Government Accountability Office and the IRS's conversations with IRA stakeholders, IRA-to-IRA transfers are already completed through an electronic transfer system that is considered uniform and efficient.
The guidance includes:
- (1) a proposed rollover procedure;
- (2) the participant's rollover request form;
- (3) the receiving plan's request to the distributing plan;
- (4) the distributing plan's rollover certification; and
- (5) the receiving plan's rollover acceptance.
The IRS is considering additional guidance to facilitate rollovers. Guidance under consideration includes: (1) eliminating the safe harbor that allows plans to send paper checks to participants to complete a direct rollover; (2) requiring administrators and trustees to complete rollovers via electronic transfers or paper checks sent directly to the receiving plan; and (3) providing for new safe harbors based on the use of sample forms.
Notice 2026-49
IR 2026-91
The IRS and Treasury have announced their intension to propose regulations relevant to Code Sec. 6433 and the SECURE 2.0 Act of 2022 (P.L. 117-328). For tax years beginning after December 31, 2026, Code Sec. 6433 allows certain low- and moderate-income individual taxpayers who have made qualified retirement savings contributions to receive matching contributions of up to $1,000 as saver’s match contributions.
The IRS and Treasury have announced their intension to propose regulations relevant to Code Sec. 6433 and the SECURE 2.0 Act of 2022 (P.L. 117-328). For tax years beginning after December 31, 2026, Code Sec. 6433 allows certain low- and moderate-income individual taxpayers who have made qualified retirement savings contributions to receive matching contributions of up to $1,000 as saver’s match contributions.
Background
On April 30, 2026, President Trump issued an executive order to (1) increase public awareness of saver’s match contributions; (2) facilitate participation in eligible retirement savings vehicles; and (3) establish a website that informs about high-quality, low-cost IRAs and taxpayers without an employer-sponsored retirement plan. These taxpayers include independent contractors.
Saver’s Match Contributions vs Saver’s Credit
For tax years beginning after December 31, 2026, Saver’s Match contributions would replace the Saver’s Credit under Code Sec. 25B. This would apply to elective contributions, qualifying retirement plans and IRAs.
However, the Saver’s Credit would continue to be available after December 31, 2026, with respect to contributions made to ABLE accounts under Code Sec. 529A. Saver’s match contributions would be claimed on a new (unpublished) Form 8880-A, Saver’s Match for Qualified Retirement Savings Contributions.
Eligibility
Individual taxpayers who make qualified retirement savings contributions could be eligible for a Saver's Match contribution based on those contributions. The contributions to a new or already-existing IRA after the end of a tax year could be made until the tax filing deadline. The contributions should be designated as being made for the prior tax year.
Tax Status
An eligible individual taxpayer’s saver’s match contribution directly paid by the Treasury to a retirement plan is generally treated as an elective deferral made by the individual taxpayer. The contribution is not taken into account for any elective deferral and catch-up limitations that apply to Code Secs. 401(k), 403(b), or governmental 457(b) plans.
Comments Requested
The Treasury Department and the IRS request comments on the issues addressed on or before October 5, 2026. Comments can be submitted electronically via the Federal eRulemaking Portal at www.regulations.gov.
Notice 2026-48
IR 2026-89
The Treasury Department and IRS have issued initial guidance on the employer credit under Code Sec. 45S for premiums paid on family and medical leave insurance as provided by the One Big Beautiful Bill Act (OBBBA) (P.L. 119-21). Beginning in 2026, an employer may elect to determine the credit based on premiums paid or incurred during the tax year with respect to an insurance policy that provide such leave instead of based on wages paid to a qualifying employee during paid family and medical leave. The Treasury intends to issue proposed regulations that include this guidance.
The Treasury Department and IRS have issued initial guidance on the employer credit under Code Sec. 45S for premiums paid on family and medical leave insurance as provided by the One Big Beautiful Bill Act (OBBBA) (P.L. 119-21). Beginning in 2026, an employer may elect to determine the credit based on premiums paid or incurred during the tax year with respect to an insurance policy that provide such leave instead of based on wages paid to a qualifying employee during paid family and medical leave. The Treasury intends to issue proposed regulations that include this guidance.
Premium Method for Credit
The credit may be claimed under the premium method beginning in 2026 only to the extent the insurance premium funds a benefit that would be creditable under the wage method. Thus, the premium must be for insurance coverage with respect to leave that is:
- paid family and medical leave as defined under the Family Medical Leave Act (FMLA), or required by state local law or paid for by a state or local government,
- payable to an individual who is a qualifying employee of the employer at the time the premium is paid or incurred, and
- provides a benefit that would constitute wages to the employee.
In the case of a premium paid or incurred for an insurance policy that provides both creditable coverage and noncreditable coverage, the employer must allocate the premium between the creditable coverage and the noncreditable coverage using any reasonable method. For example, a blended premium would be a premium for coverage that provides both qualifying paid family and medical leave and other types of leave, or coverage for qualifying employees and nonqualifying employees.
An employer may calculate the tax credit using both the wage method with respect to certain leave and the premium method with respect to other leave. However, an employer may not use the wage method to claim a credit for wages paid to the extent that the employer claims a credit using the premium method for creditable coverage that funds such benefits (or vice versa).
Notice 2026-28
IR 2026-86
The IRS updated frequently asked questions (FAQs) for qualified overtime compensation. The FAQs update guidance on (1) the qualified overtime compensation deduction; (2) coverage and exemptions under the Fair Labor Standards Act (FLSA); (3) Form W-2, Form 1099-MISC, and Form 1099-NEC requirements; and more.
The IRS updated frequently asked questions (FAQs) for qualified overtime compensation. The FAQs update guidance on (1) the qualified overtime compensation deduction; (2) coverage and exemptions under the Fair Labor Standards Act (FLSA); (3) Form W-2, Form 1099-MISC, and Form 1099-NEC requirements; and more.
Qualified Overtime Compensation Deduction
The deduction is up to $12,500 of qualified overtime compensation earned for the year per individual tax return. It is $25,000 for joint return. The deduction is reduced if a taxpayer’s modified adjusted gross income (MAGI) for the tax year exceeds $150,000, and $300,000 for joint filers.
Coverage and Exemptions Under FLSA
The IRS noted that overtime under the FLSA must be paid to individual taxpayers who are (1) covered by the FLSA; and (2) not exempt from the FLSA’s overtime requirement. Ineligible taxpayers would not receive qualified overtime compensation regardless of other laws or circumstances. Employees who are exempt from the FLSA’s overtime requirement include teachers, academic administration personnel, employees of certain seasonal amusement or recreational establishments and more.
Employee-owners of businesses are not FLSA overtime-eligible employees. An employee who owns at least a bona fide 20-percent equity interest in the enterprise in which they are employed is ineligible.
Reporting Requirements
Starting in tax year 2026, payors and employers are required to separately report qualified overtime compensation on a Form 1099-MISC, Form 1099-NEC or Form W-2. Independent contractors would only report qualified overtime compensation on a Form 1099- MISC or Form 1099-NEC.
FS-2026-13
IR 2026-88
The Fifth Circuit Court of Appeals held that the original public meaning of "limited partner" in Code Sec. 1402(a)(13) is a partner who plays no significant role in managing or running a business. The court rejected the "passive investor" rule followed by the IRS and the Tax Court in Soroban Capital Partners LP (Dec. 62,310). The Fifth Circuit also withdrew its prior opinion in Sirius Solutions, L.L.L.P. (this was the prior name of the limited liability limited partnership in this litigation).
The Fifth Circuit Court of Appeals held that the original public meaning of "limited partner" in Code Sec. 1402(a)(13) is a partner who plays no significant role in managing or running a business. The court rejected the "passive investor" rule followed by the IRS and the Tax Court in Soroban Capital Partners LP (Dec. 62,310). The Fifth Circuit also withdrew its prior opinion in Sirius Solutions, L.L.L.P. (this was the prior name of the limited liability limited partnership in this litigation).
Background
A limited liability limited partnership operated a business consulting firm, and was owned by several limited partners and one general partner. For the tax years at issue, the limited partnership allocated all of its ordinary business income to its limited partners. Based on the limited partnership tax exception in Code Sec. 1402(a)(13), the limited partnership excluded the limited partners’ distributive shares of partnership income or loss from its calculation of net earnings from self-employment during those years, and reported zero net earnings from self-employment.
The IRS adjusted the limited partnership's net earnings from self-employment, and determined that the distributive share exception in Code Sec. 1402(a)(13) did not apply because none of the limited partnership’s limited partners counted as "limited partners" for purposes of the statutory exception. The Tax Court upheld the adjustments, stating it was bound by Soroban.
Limited Partners and Self Employment Tax
Code Sec. 1402(a)(13) excludes from a partnership's calculation of net earnings from self-employment the distributive share of any item of income or loss of a limited partner, as such, other than guaranteed payments in Code Sec. 707(c) to that partner for services actually rendered to or on behalf of the partnership to the extent that those payments are established to be in the nature of remuneration for those services.
In Soroban, the Tax Court determined that Congress had enacted Code Sec. 1402(a)(13) to exclude earnings from a mere investment, and intended for the phrase "limited partners, as such" to refer to passive investors. Thus, the Tax Court there held that the limited partner exception of Code Sec. 1402(a)(13) did not apply to a partner who is limited in name only, and that determining whether a partner is a limited partner in name only required an inquiry into the limited partner's functions and roles.
No Significant Role in Management
The Fifth Circuit stated that the backdrop against which Congress enacted Code Sec. 1402(a)(13) in 1977 suggested that some participation is allowed, so long as the partners do not exercise control over the business, and that the plain text of the statute points towards this conclusion. The court observed that all relevant sources suggested that when the statute was enacted, the ordinary public meaning of"limited partner" included a partner who did not play a significant role in managing or running the business.
The Fifth Circuit rejected the Tax Court’s Soroban decision, which held that that the term "limited partner" could refer only to passive investors. The court stated that the Tax Court had selected a rule that was divorced from statutory text and that appeared to prohibit even the most minor involvement in corporate affairs. In the Fifth Circuit's view, it would have been understood at the time Congress enacted Code Sec. 1402(a)(13) that a limited partner could not manage the partnership, but perhaps could participate in certain nonmanagerial aspects of the business.
The court also stated that the Soroban decision could not be squared with decades of IRS-approved guidance insisting that what mattered was limited liability alone. The court characterized the IRS's position to be that it could change the meaning of "limited partner" from "limited liability alone" to the "passive investor" standard with no action from Congress to amend the text of Code Sec. 1402(a)(13). Even assuming that the IRS could unilaterally effectuate such changes through tax instructions, the court stated that the IRS's instructions must comport with the original public meaning of the text enacted by Congress.
Withdrawing Sirius Solutions, L.L.L.P., CA-5, 2026-1 ustc ¶50,109, and vacating and remanding an unreported Tax Court opinion.
K Alain, L.L.L.P., CA-5
The IRS has issued final regulations that clarify when backup withholding applies to payments made in settlement of third party network transactions. The final rules reflect amendments to Code Secs. 6050W and 3406 made by the One Big Beautiful Bill Act (OBBBA) (P.L. 119-21), and apply to payments made in calendar years beginning after December 31, 2024.
The IRS has issued final regulations that clarify when backup withholding applies to payments made in settlement of third party network transactions. The final rules reflect amendments to Code Secs. 6050W and 3406 made by the One Big Beautiful Bill Act (OBBBA) (P.L. 119-21), and apply to payments made in calendar years beginning after December 31, 2024.
Under the de minimis payment rule of Code Sec. 6050W(e) for information reporting purposes, a third party settlement organization (TPSO) must report payments made in settlement of third party network transactions to a payee only if the payments exceed $20,000 and 200 transactions in a calendar year. The final regulations align the backup withholding obligations under Code Sec. 3406 with this reporting threshold.
A payment will be considered a reportable payment subject to backup withholding only if both the $20,000 and 200 transaction thresholds are exceeded during the calendar year. The amount subject to backup withholding includes the entire amount of the transaction that causes either threshold to be breached, whichever occurs later, and the amount of any subsequent transactions made to the payee during the same calendar year. Further, if the TPSO made payments in settlement of third party network transactions to the payee in the previous calendar year that were reportable payments under the backup withholding rules, the de minimis exception to backup withholding would not to payments made to that payee in the current calendar year.
Participating Payees
In the preamble to the Treasury Decision, the Treasury Department and the IRS used the opportunity to clarify that de minimis TPSO reporting and the backup withholding thresholds apply with respect to each participating payee, as defined by Code Sec. 6050W(d)(1).
T.D. 10053
The Financial Crimes Enforcement Network (FinCEN) has issued a final rule that permanently removes the requirement that U.S. companies and U.S. persons must report beneficial ownership information (BOI) to FinCEN under the Corporate Transparency Act. The final rule adopts, with limited changes, an interim final rule issued on March 26, 2025, that narrowed the BOI reporting requirements.
The Financial Crimes Enforcement Network (FinCEN) has issued a final rule that permanently removes the requirement that U.S. companies and U.S. persons must report beneficial ownership information (BOI) to FinCEN under the Corporate Transparency Act. The final rule adopts, with limited changes, an interim final rule issued on March 26, 2025, that narrowed the BOI reporting requirements.
The Corporate Transparency Act (CTA) was enacted in 2021 as part of the broader Anti-Money Laundering Act of 2020. Its reporting requirement had been characterized as an important step in the fight against money laundering, financing of terrorism, proliferation financing, serious tax fraud, human and drug trafficking, counterfeiting, piracy, securities fraud, financial fraud, and acts of foreign corruption.
In late 2024 and early 2025, however, several federal district courts preliminarily enjoined FinCEN from implementing and enforcing the reporting rule. The Treasury Department announced in March 2025 that it was suspending enforcement of the CTA and its reporting requirements against U.S. citizens, domestic reporting companies, and their beneficial owners, and issued the interim final rule.
BOI Reporting Exemptions
The final rule:
- adopts exemptions that make the rollback of beneficial ownership reporting by U.S. companies permanent,
- exempts foreign pooled investment vehicles registered in the United States from reporting the BOI of a U.S person in control of the investment vehicle, and
- confirms that FinCEN will delete information about any individual that it reasonably believes is a U.S. person (for example, information that is linked to a U.S. passport or U.S. driver's license).
The final rule also makes substantive changes that expand on the relief in the interim final rule, by:
- exempting foreign companies from the requirement to report U.S. person “company applicants” (i.e., the individuals who helped those foreign companies register to do business in the United States), and
- exempting U.S. persons who have applied for FinCEN Identifiers (FinCEN IDs) from having to update or correct the information they provided to FinCEN when they applied.
Foreign entities that are reporting companies are still required under the final rule to report BOI for foreign individuals.
FinCEN has also issued answers to frequently asked questions on the final rule.
FinCEN Final Rule RIN-1506-AB67
