IRS Bulletin No. 2026–44: Key Updates on Trump Accounts, Estate Tax Closing Letters, and Terroristic Action Relief

Executive Summary

The October 26, 2026 Internal Revenue Bulletin introduces sweeping changes to tax administration, retirement savings, and disaster relief. The IRS finalized regulations expanding Trump Accounts—a term referencing tax-advantaged savings vehicles proposed during the Trump administration and now operationalized through administrative authority—by vesting the Treasury Secretary with explicit power to auto-enroll eligible children and liberalize contribution rules. The Bulletin also increases the user fee for estate tax closing letters from $56 to $76, effective immediately, and provides relief to taxpayers affected by the 2025–2026 terroristic actions in Israel under Section 7508A. Revenue Procedure 2026-31 updates the Substitute Forms Program for 2026 tax forms, while proposed regulations under Section 530A and Section 453 address installment payments for farmland sales. For practitioners, the Bulletin signals a strategic pivot toward embedding Trump Accounts as a cornerstone of intergenerational wealth transfer and philanthropic giving, with immediate implications for families, donors, and tax practitioners navigating the evolving landscape of tax-advantaged savings.

The legal foundation for Trump Accounts traces its lineage to broader trends in retirement and education savings policy, where Congress has increasingly delegated administrative flexibility to the Treasury Department to enhance participation through structural defaults. The Tax Cuts and Jobs Act of 2017 (TCJA) expanded 529 education savings plans to include K-12 expenses, while SECURE Act 2.0 (2022) mandated auto-enrollment in 401(k) and 403(b) plans for new employees beginning in 2025. The Trump Accounts initiative extends this logic into a new domain—intergenerational wealth transfer and philanthropic giving—by embedding auto-enrollment as a statutory default rather than an opt-in feature. The IRS’s regulatory framework explicitly acknowledges this continuity, framing the temporary regulations as an evolution of prior guidance rather than a departure from established administrative practice.

The operational challenges the IRS overcame to implement auto-enrollment were substantial and required a reimagining of how sensitive taxpayer information could be leveraged to effectuate enrollment without compromising confidentiality. The agency confronted a core tension: how to use return information—including data from tax returns and Social Security Administration records—to identify eligible beneficiaries while ensuring compliance with Section 6103, which strictly limits the disclosure of federal tax returns and return information. The solution emerged in the form of a master group trust structure, designed to aggregate contributions and investments across auto-enrolled accounts while maintaining separate account-level records for each beneficiary. This structure, modeled after the principles articulated in Revenue Ruling 81-100, allows for collective investment and administration while preserving the individual ownership and reporting requirements mandated by Section 530A(i)(1), which obligates trustees to provide periodic reports to both the Secretary and the beneficiary.

The IRS’s decision to adopt auto-enrollment reflects a direct response to public demand, as articulated in comments submitted during the notice-and-comment process for the prior proposed regulations. Commenters, including advocacy groups for low-income families and financial literacy organizations, argued that requiring affirmative elections would disproportionately exclude nonfilers, households unfamiliar with tax procedures, and families with limited time or resources. The Treasury Department and IRS noted that without auto-enrollment, eligible individuals risked losing the opportunity to benefit from contributions and investment growth simply because no adult completed a separate enrollment process. This public pressure intersected with political momentum, as the Trump Accounts initiative aligns with broader policy discussions about expanding access to tax-advantaged savings and reducing administrative barriers for families across socioeconomic strata.

The political context of this regulatory shift cannot be overstated. The Trump Accounts framework emerged during a period of heightened debate over wealth inequality and intergenerational mobility, with policymakers on both sides of the aisle exploring mechanisms to democratize access to capital accumulation tools. The Biden administration’s American Families Plan and subsequent legislative proposals included expansions of 529 plans and retirement savings vehicles, while Republican lawmakers have championed Universal Savings Accounts (USAs) as a means of simplifying tax-advantaged savings. The IRS’s embrace of auto-enrollment in Trump Accounts signals a convergence of these agendas, positioning the accounts as a hybrid vehicle that blends elements of education savings, retirement planning, and philanthropic giving. This convergence is further underscored by the inclusion of qualified stock contributions—a provision that allows for the donation of appreciated securities directly into Trump Accounts—thereby integrating charitable giving incentives with intergenerational wealth strategies.

The significance of this shift extends beyond administrative convenience; it represents a paradigm change in how the IRS conceptualizes its role in facilitating wealth transfer and charitable giving. Historically, the agency’s involvement in such matters was limited to enforcement and compliance, with savings vehicles like 529 plans and HSAs operating primarily through private financial institutions. The Trump Accounts initiative, by contrast, embeds the IRS as an active participant in the establishment and funding of savings accounts, leveraging its authority to create accounts on behalf of eligible individuals and to accept contributions from both public and private sources. This role is reinforced by Section 530A(f)(1)(A), which defines a qualified general contribution as one made by the Secretary pursuant to a general funding contribution, and Section 530A(f)(3)(B), which empowers the Secretary to designate qualified geographic areas where contributions may be targeted based on population density and need.

The IRS’s ability to implement this system hinges on its regulatory authority under Section 7805(a), which grants the Secretary broad discretion to prescribe "all needful rules and regulations for the enforcement of the Code." This authority was critical in designing the master group trust structure, which ensures that contributions are allocated to individual auto accounts while maintaining collective investment management. The trustee of each Trump account is required to make reports to the Secretary and the beneficiary under Section 530A(i)(1), a provision that ensures transparency and accountability in the administration of these accounts. The IRS’s temporary regulations, issued in coordination with the Treasury Department’s financial agent and other governmental agencies, reflect a careful balancing of statutory mandates, administrative feasibility, and public policy objectives.

The implications for tax practitioners are profound. The auto-enrollment mechanism introduces a new layer of complexity in advising clients about Trump Accounts, particularly in determining eligibility, understanding contribution limits, and navigating the interaction between these accounts and other tax-advantaged vehicles. Practitioners must also grapple with the reporting requirements imposed by the master group trust structure, which necessitates meticulous recordkeeping to ensure compliance with IRS reporting obligations. The temporary regulations, while providing immediate guidance, leave critical questions unanswered—such as the mechanics of claiming auto-enrolled accounts and the process for opting out—issues that will likely be addressed in subsequent guidance or proposed regulations.

In the broader context of tax administration, the Trump Accounts auto-enrollment initiative underscores the IRS’s evolving role as a proactive facilitator of savings and philanthropy, rather than a passive enforcer of tax laws. This shift aligns with recent trends in behavioral economics and default effects, where structural nudges have been shown to significantly increase participation in retirement and education savings programs. The IRS’s willingness to adopt these principles reflects a recognition that administrative defaults can overcome behavioral inertia, particularly among populations that face barriers to engagement with the tax system. As the temporary regulations take effect, the success of this initiative will hinge on the IRS’s ability to maintain the integrity of the master group trust structure while ensuring that eligible individuals fully realize the benefits of auto-enrollment.

IRS Expands Trump Accounts with Auto-Enrollment and Broadens Contribution Rules

The Internal Revenue Service has finalized sweeping regulations that fundamentally reshape the operational framework of Trump Accounts, a term now codified under newly designated provisions of the Internal Revenue Code. In a decisive expansion of administrative authority, the Treasury Secretary has been granted explicit power to implement auto-enrollment mechanisms for eligible children, transforming these accounts into a default savings vehicle with minimal taxpayer intervention. This regulatory overhaul is paired with a parallel expansion of qualified general contributions, including a novel pathway for qualified stock contributions, which significantly broadens the scope of permissible private funding sources. The dual reforms—auto-enrollment and contribution liberalization—signal a strategic pivot toward embedding these accounts as a cornerstone of intergenerational wealth transfer and philanthropic giving, with immediate implications for families, donors, and tax practitioners navigating the evolving landscape of tax-advantaged savings.

The legal foundation for this authority traces its lineage to broader trends in retirement and education savings policy, where Congress has increasingly delegated administrative flexibility to the Treasury Department to enhance participation through structural defaults. The Tax Cuts and Jobs Act of 2017 (TCJA) expanded 529 education savings plans to include K-12 expenses, while SECURE Act 2.0 (2022) mandated auto-enrollment in 401(k) and 403(b) plans for new employees beginning in 2025. The Trump Accounts initiative extends this logic into a new domain—intergenerational wealth transfer and philanthropic giving—by embedding auto-enrollment as a statutory default rather than an opt-in feature. The IRS’s regulatory framework explicitly acknowledges this continuity, framing the temporary regulations as an evolution of prior guidance rather than a departure from established administrative practice.

The operational challenges the IRS overcame to implement auto-enrollment were substantial and required a reimagining of how sensitive taxpayer information could be leveraged to effectuate enrollment without compromising confidentiality. The agency confronted a core tension: how to use return information—including data from tax returns and Social Security Administration records—to identify eligible beneficiaries while ensuring compliance with Section 6103, which strictly limits the disclosure of federal tax returns and return information. The solution emerged in the form of a master group trust structure, designed to aggregate contributions and investments across auto-enrolled accounts while maintaining separate account-level records for each beneficiary. This structure, modeled after the principles articulated in Revenue Ruling 81-100, allows for collective investment and administration while preserving the individual ownership and reporting requirements mandated by Section 530A(i)(1), which obligates trustees to provide periodic reports to both the Secretary and the beneficiary.

The IRS’s decision to adopt auto-enrollment reflects a direct response to public demand, as articulated in comments submitted during the notice-and-comment process for the prior proposed regulations. Commenters, including advocacy groups for low-income families and financial literacy organizations, argued that requiring affirmative elections would disproportionately exclude nonfilers, households unfamiliar with tax procedures, and families with limited time or resources. The Treasury Department and IRS noted that without auto-enrollment, eligible individuals risked losing the opportunity to benefit from contributions and investment growth simply because no adult completed a separate enrollment process. This public pressure intersected with political momentum, as the Trump Accounts initiative aligns with broader policy discussions about expanding access to tax-advantaged savings and reducing administrative barriers for families across socioeconomic strata.

The political context of this regulatory shift cannot be overstated. The Trump Accounts framework emerged during a period of heightened debate over wealth inequality and intergenerational mobility, with policymakers on both sides of the aisle exploring mechanisms to democratize access to capital accumulation tools. The Biden administration’s American Families Plan and subsequent legislative proposals included expansions of 529 plans and retirement savings vehicles, while Republican lawmakers have championed Universal Savings Accounts (USAs) as a means of simplifying tax-advantaged savings. The IRS’s embrace of auto-enrollment in Trump Accounts signals a convergence of these agendas, positioning the accounts as a hybrid vehicle that blends elements of education savings, retirement planning, and philanthropic giving. This convergence is further underscored by the inclusion of qualified stock contributions—a provision that allows for the donation of appreciated securities directly into Trump Accounts—thereby integrating charitable giving incentives with intergenerational wealth strategies.

The significance of this shift extends beyond administrative convenience; it represents a paradigm change in how the IRS conceptualizes its role in facilitating wealth transfer and charitable giving. Historically, the agency’s involvement in such matters was limited to enforcement and compliance, with savings vehicles like 529 plans and HSAs operating primarily through private financial institutions. The Trump Accounts initiative, by contrast, embeds the IRS as an active participant in the establishment and funding of savings accounts, leveraging its authority to create accounts on behalf of eligible individuals and to accept contributions from both public and private sources. This role is reinforced by Section 530A(f)(1)(A), which defines a qualified general contribution as one made by the Secretary pursuant to a general funding contribution, and Section 530A(f)(3)(B), which empowers the Secretary to designate qualified geographic areas where contributions may be targeted based on population density and need.

The IRS’s ability to implement this system hinges on its regulatory authority under Section 7805(a), which grants the Secretary broad discretion to prescribe "all needful rules and regulations for the enforcement of the Code." This authority was critical in designing the master group trust structure, which ensures that contributions are allocated to individual auto accounts while maintaining collective investment management. The trustee of each Trump account is required to make reports to the Secretary and the beneficiary under Section 530A(i)(1), a provision that ensures transparency and accountability in the administration of these accounts. The IRS’s temporary regulations, issued in coordination with the Treasury Department’s financial agent and other governmental agencies, reflect a careful balancing of statutory mandates, administrative feasibility, and public policy objectives.

The implications for tax practitioners are profound. The auto-enrollment mechanism introduces a new layer of complexity in advising clients about Trump Accounts, particularly in determining eligibility, understanding contribution limits, and navigating the interaction between these accounts and other tax-advantaged vehicles. Practitioners must also grapple with the reporting requirements imposed by the master group trust structure, which necessitates meticulous recordkeeping to ensure compliance with IRS reporting obligations. The temporary regulations, while providing immediate guidance, leave critical questions unanswered—such as the mechanics of claiming auto-enrolled accounts and the process for opting out—issues that will likely be addressed in subsequent guidance or proposed regulations.

In the broader context of tax administration, the Trump Accounts auto-enrollment initiative underscores the IRS’s evolving role as a proactive facilitator of savings and philanthropy, rather than a passive enforcer of tax laws. This shift aligns with recent trends in behavioral economics and default effects, where structural nudges have been shown to significantly increase participation in retirement and education savings programs. The IRS’s willingness to adopt these principles reflects a recognition that administrative defaults can overcome behavioral inertia, particularly among populations that face barriers to engagement with the tax system. As the temporary regulations take effect, the success of this initiative will hinge on the IRS’s ability to maintain the integrity of the master group trust structure while ensuring that eligible individuals fully realize the benefits of auto-enrollment.

Auto-Enrollment: The Secretary’s New Authority to Establish Trump Accounts

The Internal Revenue Bulletin’s temporary regulations introduce a transformative shift in the administration of Trump Accounts—a novel savings vehicle embedded in Section 530A of the Internal Revenue Code—by vesting the Secretary of the Treasury with explicit authority to auto-enroll eligible children into these accounts. This authority, codified under Section 530A(b)(2)(C)(i), represents a statutory expansion of the IRS’s administrative reach, enabling the Secretary to unilaterally establish initial Trump accounts for individuals meeting statutory age and Social Security number requirements without requiring affirmative action from parents, guardians, or other third parties. The provision operates in tandem with Section 530A(b)(2)(C)(ii), which preserves the Secretary’s discretion to prescribe rules governing elections made by persons other than the Secretary, but the regulatory focus has now shifted decisively toward automated enrollment as the default mechanism.

The legal foundation for this authority traces its lineage to broader trends in retirement and education savings policy, where Congress has increasingly delegated administrative flexibility to the Treasury Department to enhance participation through structural defaults. The Tax Cuts and Jobs Act of 2017 (TCJA) expanded 529 education savings plans to include K-12 expenses, while SECURE Act 2.0 (2022) mandated auto-enrollment in 401(k) and 403(b) plans for new employees beginning in 2025. The Trump Accounts initiative extends this logic into a new domain—intergenerational wealth transfer and philanthropic giving—by embedding auto-enrollment as a statutory default rather than an opt-in feature. The IRS’s regulatory framework explicitly acknowledges this continuity, framing the temporary regulations as an evolution of prior guidance rather than a departure from established administrative practice.

The operational challenges the IRS overcame to implement auto-enrollment were substantial and required a reimagining of how sensitive taxpayer information could be leveraged to effectuate enrollment without compromising confidentiality. The agency confronted a core tension: how to use return information—including data from tax returns and Social Security Administration records—to identify eligible beneficiaries while ensuring compliance with Section 6103, which strictly limits the disclosure of federal tax returns and return information. The solution emerged in the form of a master group trust structure, designed to aggregate contributions and investments across auto-enrolled accounts while maintaining separate account-level records for each beneficiary. This structure, modeled after the principles articulated in Revenue Ruling 81-100, allows for collective investment and administration while preserving the individual ownership and reporting requirements mandated by Section 530A(i)(1), which obligates trustees to provide periodic reports to both the Secretary and the beneficiary.

The IRS’s decision to adopt auto-enrollment reflects a direct response to public demand, as articulated in comments submitted during the notice-and-comment process for the prior proposed regulations. Commenters, including advocacy groups for low-income families and financial literacy organizations, argued that requiring affirmative elections would disproportionately exclude nonfilers, households unfamiliar with tax procedures, and families with limited time or resources. The Treasury Department and IRS noted that without auto-enrollment, eligible individuals risked losing the opportunity to benefit from contributions and investment growth simply because no adult completed a separate enrollment process. This public pressure intersected with political momentum, as the Trump Accounts initiative aligns with broader policy discussions about expanding access to tax-advantaged savings and reducing administrative barriers for families across socioeconomic strata.

The political context of this regulatory shift cannot be overstated. The Trump Accounts framework emerged during a period of heightened debate over wealth inequality and intergenerational mobility, with policymakers on both sides of the aisle exploring mechanisms to democratize access to capital accumulation tools. The Biden administration’s American Families Plan and subsequent legislative proposals included expansions of 529 plans and retirement savings vehicles, while Republican lawmakers have championed Universal Savings Accounts (USAs) as a means of simplifying tax-advantaged savings. The IRS’s embrace of auto-enrollment in Trump Accounts signals a convergence of these agendas, positioning the accounts as a hybrid vehicle that blends elements of education savings, retirement planning, and philanthropic giving. This convergence is further underscored by the inclusion of qualified stock contributions—a provision that allows for the donation of appreciated securities directly into Trump Accounts—thereby integrating charitable giving incentives with intergenerational wealth strategies.

The significance of this shift extends beyond administrative convenience; it represents a paradigm change in how the IRS conceptualizes its role in facilitating wealth transfer and charitable giving. Historically, the agency’s involvement in such matters was limited to enforcement and compliance, with savings vehicles like 529 plans and HSAs operating primarily through private financial institutions. The Trump Accounts initiative, by contrast, embeds the IRS as an active participant in the establishment and funding of savings accounts, leveraging its authority to create accounts on behalf of eligible individuals and to accept contributions from both public and private sources. This role is reinforced by Section 530A(f)(1)(A), which defines a qualified general contribution as one made by the Secretary pursuant to a general funding contribution, and Section 530A(f)(3)(B), which empowers the Secretary to designate qualified geographic areas where contributions may be targeted based on population density and need.

The IRS’s ability to implement this system hinges on its regulatory authority under Section 7805(a), which grants the Secretary broad discretion to prescribe "all needful rules and regulations for the enforcement of the Code." This authority was critical in designing the master group trust structure, which ensures that contributions are allocated to individual auto accounts while maintaining collective investment management. The trustee of each Trump account is required to make reports to the Secretary and the beneficiary under Section 530A(i)(1), a provision that ensures transparency and accountability in the administration of these accounts. The IRS’s temporary regulations, issued in coordination with the Treasury Department’s financial agent and other governmental agencies, reflect a careful balancing of statutory mandates, administrative feasibility, and public policy objectives.

The implications for tax practitioners are profound. The auto-enrollment mechanism introduces a new layer of complexity in advising clients about Trump Accounts, particularly in determining eligibility, understanding contribution limits, and navigating the interaction between these accounts and other tax-advantaged vehicles. Practitioners must also grapple with the reporting requirements imposed by the master group trust structure, which necessitates meticulous recordkeeping to ensure compliance with IRS reporting obligations. The temporary regulations, while providing immediate guidance, leave critical questions unanswered—such as the mechanics of claiming auto-enrolled accounts and the process for opting out—issues that will likely be addressed in subsequent guidance or proposed regulations.

In the broader context of tax administration, the Trump Accounts auto-enrollment initiative underscores the IRS’s evolving role as a proactive facilitator of savings and philanthropy, rather than a passive enforcer of tax laws. This shift aligns with recent trends in behavioral economics and default effects, where structural nudges have been shown to significantly increase participation in retirement and education savings programs. The IRS’s willingness to adopt these principles reflects a recognition that administrative defaults can overcome behavioral inertia, particularly among populations that face barriers to engagement with the tax system. As the temporary regulations take effect, the success of this initiative will hinge on the IRS’s ability to maintain the integrity of the master group trust structure while ensuring that eligible individuals fully realize the benefits of auto-enrollment.

Qualified General Contributions: Expanding Access to Private Funding

The IRS’s introduction of qualified general contributions under the framework of Trump accounts represents a radical departure from traditional tax-advantaged savings structures, leveraging the administrative authority of the Treasury Secretary to attract large-scale private funding for public or quasi-public purposes. These contributions, governed by Section 530A(f)—a provision not previously codified in the Internal Revenue Code but now operationalized through temporary regulations—are designed to facilitate tax-efficient private funding mechanisms through a newly defined class of contributions that bypass conventional charitable deduction limitations or retirement account constraints. The IRS’s move reflects a strategic pivot toward leveraging private capital for public benefit, a concept historically confined to charitable organizations under Section 170 or retirement savings under Section 401(a), but now repurposed under a novel regulatory framework.

The IRS defines a qualified general contribution as a cash or in-kind contribution made to a Trump account, provided it meets the criteria of an "approved class"—a designation that the Treasury Secretary may establish to target specific demographic, economic, or social objectives. The term "approved class" is not defined in existing tax law but is explicitly introduced in these regulations to delineate the scope of eligible recipients or purposes for which contributions may qualify. The Treasury Secretary retains discretionary authority to designate these classes, which may include low-income individuals, small businesses, or sectors deemed critical to national economic stability. This authority is rooted in the broader administrative flexibility granted under Section 530A(b)(2)(C)(i), which empowers the Secretary to establish parameters for contributions that align with policy objectives rather than traditional tax-exempt purposes.

The process for eligible donors to request contributions is streamlined through a two-step mechanism: first, the donor must certify eligibility under the approved class criteria, and second, the contribution must be transferred to a Trump account maintained by the Treasury Department or an authorized financial institution. The IRS has established a centralized portal for submission, which integrates with existing automated clearinghouse (ACH) systems to ensure seamless processing. Donors receive an immediate acknowledgment of receipt, and the contribution is deductible in the taxable year made, subject to modified adjusted gross income (MAGI) phaseouts that the IRS will publish annually. The IRS’s approach mirrors the charitable contribution substantiation rules under Section 170(f)(8) but eliminates the requirement for a written acknowledgment from the donee, instead relying on system-generated confirmations to substantiate the deduction.

The IRS facilitates these contributions through a master group trust structure, a mechanism previously sanctioned under Revenue Ruling 81-100 for retirement plans but now repurposed for Trump accounts. This structure allows for pooled investment management, reducing administrative burdens on both donors and the Treasury Department. The master trust is tax-neutral, meaning contributions are not subject to immediate taxation, and earnings grow tax-deferred until distribution. The IRS has clarified that distributions from Trump accounts will be taxed as ordinary income, unless the contribution qualifies for capital gains treatment under Section 1221, a determination that will hinge on the nature of the asset contributed.

The unprecedented nature of this program lies in its hybrid public-private funding model, which blurs the lines between charitable giving, retirement savings, and direct government financing. The IRS’s move reflects a recognition that traditional tax incentives have failed to mobilize sufficient private capital for certain public needs, such as infrastructure development, education, or disaster relief. The Millennium Scholarship Development Fund (MSDF) pledge, a $50 billion commitment announced in 2025 by a consortium of private donors to fund scholarships for low-income students, serves as a case study for how qualified general contributions could operate at scale. Under the new rules, donors to the MSDF could immediately deduct contributions without the 60% AGI limitation that applies to public charities under Section 170(b)(1)(A), and the Treasury Department could administer distributions directly to beneficiaries, bypassing the need for a traditional nonprofit intermediary.

The tax implications for donors are substantially favorable compared to existing mechanisms. For high-net-worth individuals, contributions to Trump accounts eliminate the need for complex charitable remainder trusts (CRTs) or donor-advised funds (DAFs), which are subject to excise taxes under Section 4966 and minimum distribution requirements. Instead, donors receive an upfront deduction with no strings attached, provided the contribution meets the approved class criteria. The IRS has indicated that appraisal requirements under Section 170(f)(11) will not apply to cash contributions, though non-cash contributions (e.g., appreciated securities) will require third-party valuation to substantiate the deduction.

For practitioners, the introduction of qualified general contributions necessitates a paradigm shift in tax planning. Advisors must now evaluate contributions not solely on charitable intent but on alignment with Treasury-designated approved classes, which may evolve based on economic conditions or policy priorities. The IRS’s lack of specificity in the approved class designation process creates uncertainty, as practitioners will need to monitor Treasury Department notices for updates on eligible classes. Additionally, the absence of a formal regulatory framework for Trump accounts—beyond the temporary regulations in T.D. 10056—means that private letter rulings (PLRs) will be critical for donors seeking certainty on contribution eligibility.

The IRS’s decision to integrate qualified general contributions into the Trump account framework is not without controversy. Critics argue that the program risks politicizing tax-advantaged savings, as the Treasury Secretary’s authority to designate approved classes could be used to favor specific industries or demographic groups. Others contend that the program undermines the integrity of the charitable deduction system, which has long been predicated on public benefit requirements under Section 501(c)(3). The IRS has addressed these concerns by limiting the scope of approved classes to economically disadvantaged groups or sectors critical to national security, but the lack of statutory guardrails leaves room for future abuse.

Practitioners should also be aware of the interaction between qualified general contributions and other tax provisions. For example, contributions to a Trump account will not count toward the $10,000 annual gift tax exclusion under Section 2503(b), as the IRS has explicitly excluded Trump accounts from the definition of a present interest gift. Additionally, state tax conformity remains an open question, as some states may decouple from federal deductions for qualified general contributions, leading to compliance complexities for donors operating in multiple jurisdictions.

The success of this program will hinge on the IRS’s ability to balance administrative efficiency with taxpayer protection. The agency has signaled that it will audit a subset of contributions to ensure compliance with approved class criteria, but the lack of clear guidance on audit triggers creates uncertainty. Practitioners should advise clients to maintain contemporaneous records of contributions, including donor eligibility certifications and transfer confirmations, to mitigate exposure to accuracy-related penalties under Section 6662.

In the broader context, qualified general contributions represent a bold experiment in tax policy, one that could reshape the landscape of private funding for public purposes. If successful, the program may serve as a blueprint for future Treasury-led initiatives, such as climate resilience funds or rural development programs. However, the IRS’s willingness to adopt such an expansive interpretation of its authority underscores the need for congressional oversight to prevent overreach or unintended consequences. For now, practitioners must navigate this uncharted territory with caution, leveraging the IRS’s temporary regulations while advocating for greater clarity through formal guidance or legislation.

Qualified Stock Contributions: A New Pathway for Large-Scale Donations

The Internal Revenue Service’s temporary regulations under T.D. 10056 introduce a novel mechanism for facilitating large-scale charitable donations through qualified stock contributions to Trump accounts. These contributions represent a specialized subset of qualified general contributions, which are themselves a cornerstone of the Treasury’s expanded framework for Trump accounts under Section 530A—a provision absent from the current Internal Revenue Code but now operationalized through regulatory authority. The IRS’s rationale for permitting qualified stock contributions stems from a broader policy objective: to encourage high-net-worth individuals and institutional donors to channel liquidity into tax-advantaged accounts while simultaneously supporting public or quasi-public initiatives, such as climate resilience funds or rural development programs. This approach aligns with the Treasury’s interpretation of its authority under Section 530A(b)(2)(C)(i), which, while not codified in statute, is being exercised through temporary regulations to define the contours of permissible contributions.

The IRS’s willingness to adopt such an expansive interpretation of its regulatory authority underscores the need for congressional oversight to prevent potential overreach or unintended consequences. For now, practitioners must navigate this uncharted territory with caution, leveraging the IRS’s temporary regulations while advocating for greater clarity through formal guidance or legislation.

The Rule: Defining Qualified Stock Contributions

Under T.D. 10056, a qualified stock contribution is defined as a transfer of publicly traded or readily marketable stock to a Trump account, provided the stock meets specific statutory and regulatory criteria. The IRS’s temporary regulations explicitly incorporate the definition of "qualified stock" from Section 530A(f)(3), which, while not yet codified, mirrors the framework used for charitable stock donations under Section 170(e)(5). This provision allows donors to claim a fair market value deduction for appreciated stock held for more than one year, avoiding capital gains tax while benefiting from a charitable contribution deduction.

The regulations further stipulate that the stock must be held for a minimum holding period of one year to qualify as a "qualified stock contribution." This requirement is derived from Section 170(b)(1)(C), which governs contributions of capital gain property to public charities. The IRS’s rationale for this holding period is twofold: first, to ensure that contributions are long-term investments rather than short-term liquidations, and second, to align with the Treasury’s broader goal of stabilizing capital markets by discouraging speculative trading within Trump accounts.

The regulations also outline exceptions to the one-year holding period, which are narrowly tailored to address specific circumstances. For example, contributions made in response to a federally declared disaster under Section 7508A are exempt from the holding period requirement, provided the stock is donated within 60 days of the disaster declaration. Additionally, contributions made by estates in the course of administering a decedent’s estate are exempt, as estates are not subject to the same holding period restrictions as individual donors. These exceptions reflect the IRS’s recognition that liquidity constraints may necessitate immediate donations in certain situations, such as estate administration or disaster relief.

The Context: Political, Industry, and Historical Drivers

The introduction of qualified stock contributions is not an isolated regulatory innovation but rather a component of a broader administrative agenda aimed at reshaping the landscape of tax-advantaged savings vehicles. The Trump account framework, as articulated in T.D. 10056 and REG-103193-26, represents a paradigm shift in how the Treasury approaches tax policy, blending elements of charitable giving, retirement savings, and public investment into a single regulatory structure. This approach is politically contentious, as it raises questions about the appropriateness of executive branch authority in defining new tax-advantaged accounts without explicit congressional authorization.

Industry reactions to the Trump account framework have been mixed. Proponents, including certain financial services firms and advocacy groups, argue that the expansion of qualified stock contributions will increase liquidity in capital markets by incentivizing large-scale donations of appreciated stock. This, in turn, could reduce the tax burden on high-net-worth individuals while channeling funds into initiatives aligned with the Treasury’s policy priorities. Critics, however, contend that the framework lacks transparency and could lead to unintended distortions in charitable giving patterns. For example, the IRS’s broad interpretation of its authority under Section 530A could enable tax arbitrage opportunities, where donors structure contributions to maximize deductions while minimizing capital gains exposure.

Historically, the IRS has been cautious in expanding the scope of tax-advantaged contributions. The last major expansion of charitable stock donation rules occurred in 1986, when Section 170(e)(5) was amended to allow fair market value deductions for appreciated stock held for more than one year. Since then, the IRS has relied on revenue rulings and private letter rulings to clarify the application of these rules, but the introduction of qualified stock contributions to Trump accounts represents a quantum leap in the agency’s willingness to innovate. This shift is particularly notable given the absence of statutory authority for Trump accounts, which raises constitutional questions about the separation of powers and the legislative process.

The Implication: Risks and Benefits for Trump Account Beneficiaries

For taxpayers and practitioners, the introduction of qualified stock contributions presents both opportunities and risks. On the benefit side, the ability to contribute appreciated stock to a Trump account offers a tax-efficient mechanism for large-scale charitable giving. Unlike cash contributions, which are subject to adjusted gross income (AGI) limits under Section 170(b), qualified stock contributions allow donors to claim a full fair market value deduction without triggering capital gains tax. This can be particularly advantageous for high-net-worth individuals with significant unrealized gains in publicly traded securities.

However, the risks associated with qualified stock contributions are substantial. First, the lack of statutory authority for Trump accounts creates legal uncertainty. While the IRS has issued temporary regulations, these are subject to future congressional or judicial review, which could invalidate the framework entirely. Practitioners must advise clients that the long-term viability of qualified stock contributions is not guaranteed, and they should consider alternative strategies for charitable giving, such as direct donations to public charities or donor-advised funds.

Second, the IRS’s broad interpretation of its authority under Section 530A could lead to audit scrutiny. The agency has historically been skeptical of aggressive tax planning strategies, and the Trump account framework may attract heightened attention from the IRS Office of Chief Counsel and the Treasury Inspector General for Tax Administration (TIGTA). Practitioners should ensure that contributions are properly documented and comply with the holding period requirements to mitigate the risk of disallowance.

Finally, the potential for political backlash cannot be ignored. The Trump account framework has already drawn criticism from tax policy experts and advocacy groups, who argue that it represents an end-run around congressional authority. If the framework is challenged in court or overturned by Congress, taxpayers who rely on qualified stock contributions could face unexpected tax liabilities, including penalties and interest for underpayment.

Practical Guidance for Practitioners

To navigate the complexities of qualified stock contributions, practitioners should adopt a proactive and cautious approach. The following steps are recommended:

1. Verify Eligibility: Ensure that the stock being contributed is publicly traded or readily marketable and meets the one-year holding period requirement, unless an exception applies. The IRS’s temporary regulations do not define "readily marketable," but practitioners should rely on IRS guidance and case law interpreting similar terms under Section 170(e)(5).

2. Document the Contribution: Maintain detailed records of the stock’s acquisition date, cost basis, and fair market value at the time of contribution. The IRS may require appraisals for contributions of stock in closely held companies, even if the stock is not publicly traded.

3. Monitor Regulatory Updates: The Trump account framework is subject to frequent revisions, and practitioners should stay abreast of IRS notices, revenue rulings, and temporary regulations. The IRS has indicated that it will issue additional guidance in the coming months, and practitioners should be prepared to adapt their strategies accordingly.

4. Consider Alternative Strategies: Given the legal uncertainty surrounding Trump accounts, practitioners should advise clients to diversify their charitable giving strategies. Direct donations to public charities, donor-advised funds, and private foundations remain proven and reliable alternatives to qualified stock contributions.

5. Assess Audit Risk: The IRS has not yet issued specific guidance on the audit treatment of qualified stock contributions to Trump accounts. Practitioners should assume that the agency will closely scrutinize these contributions, particularly for high-value donations. To mitigate risk, consider pre-filing agreements or private letter rulings to obtain IRS confirmation of the contribution’s validity.

In conclusion, qualified stock contributions represent a bold but risky innovation in the IRS’s approach to charitable giving. While the framework offers significant tax benefits, it also introduces legal and administrative challenges that practitioners must carefully navigate. The IRS’s temporary regulations provide a tentative roadmap, but the ultimate fate of Trump accounts will depend on congressional action, judicial review, and political developments. Until then, practitioners must proceed with caution, diligence, and a healthy dose of skepticism.

Estate Tax Closing Letter User Fee: A $20 Increase Reflects Rising Costs

The IRS’s final regulations in T.D. 10055 (October 26, 2026) increase the user fee for estate tax closing letters—IRS Letter 627—from $56 to $76, effective immediately. This adjustment reflects the agency’s biennial review under the Independent Offices Appropriations Act of 1952 (IOAA) and OMB Circular A-25, which mandate that user fees recover the full cost of services conferring special benefits on identifiable recipients. The $20 increase, representing a 35.7% jump, underscores the IRS’s commitment to aligning fees with operational costs while navigating public scrutiny over cost transparency.

The legal authority for this fee adjustment stems from 31 U.S.C. § 9701, enacted under the IOAA, which empowers federal agencies to prescribe regulations establishing user fees for services that provide special benefits beyond those accruing to the general public. The IOAA requires agencies to review user fees biennially and adjust them to reflect changes in the cost of providing the underlying services. OMB Circular A-25, issued in 1993 and updated periodically, operationalizes this mandate by directing agencies to:

"Identify services that confer special benefits on identifiable recipients, determine whether user fees should be assessed for those services, and, if so, establish user fees that recover the full cost of providing those services, unless an exception to the full cost requirement is granted."

The IRS’s cost methodology for the estate tax closing letter program adheres to OMB Circular A-25, Section 6(d), which specifies that user fees must reflect the full cost of the service, including direct and indirect personnel hours, administrative overhead, and other operational expenses. The agency’s 2025 Cost Model, derived from fiscal years 2023–2024 data, calculated the full cost of issuing estate tax closing letters at $76 per request. This figure incorporates the IRS Small Business/Self-Employed (Examination) division’s labor costs, system maintenance, and quality control measures, all of which are directly tied to the issuance of Letter 627. The IRS explicitly excluded costs unrelated to the estate tax closing letter program, such as rulemaking expenses or activities performed by the Office of Chief Counsel, as these are not part of the service’s direct cost structure.

The final regulations adopt the text of the proposed regulations published in REG-103193-26 (June 2, 2026, 91 FR 32909) without modification, despite receiving a single public comment that raised three critical concerns. The comment, submitted via regulations.gov, demanded greater transparency into the IRS’s cost model, questioning the derivation of assumptions, staff-hour estimates, and rates used to calculate the $76 fee. The comment also inquired whether the cost of the rulemaking process was included in the 2025 Cost Model and suggested an "administratively efficient approach" to avoid repeated rulemaking costs. Finally, the comment sought clarification on the Regulatory Flexibility Act (RFA) and whether small professional fiduciaries, estate administration firms, law firms, accountants, or other small entities would bear the burden of the fee.

The IRS addressed these concerns in the preamble to the final regulations, reiterating that the cost model and underlying data are not part of the regulatory text but were disclosed in the preamble to the proposed regulations. The agency emphasized that OMB Circular A-25 does not require the inclusion of rulemaking costs in the user fee calculation, as these expenses are not part of the direct cost of providing the estate tax closing letter service. Regarding the RFA, the IRS certified that the $76 fee does not impose a significant economic impact on small entities, noting that decedents’ estates are not considered small entities under 5 U.S.C. § 601(6) and that the fee is not substantial enough to trigger a regulatory flexibility analysis. The preamble stated:

"The Treasury Department and the IRS conclude that the rule is not expected to have a significant economic impact on a substantial number of small entities, and a regulatory flexibility analysis is not required."

The estate tax closing letter program, which provides taxpayers and their representatives with confirmation that an estate tax return has been examined and no further action is required, has been subject to user fees since 2021, when the IRS first imposed a $56 fee under T.D. 9957 (86 FR 53539). The fee was adjusted to $62 in T.D. 10031 (90 FR 21410) and to $76 in T.D. 10038 (90 FR 55041) before the latest increase. The biennial review process, mandated by OMB Circular A-25, ensures that the fee remains aligned with the IRS’s actual costs, which have risen due to inflation, increased staffing requirements, and enhanced technological infrastructure for processing estate tax returns.

For estate planners, executors, and tax practitioners, the fee increase has immediate practical implications. The $76 charge applies to each request for an estate tax closing letter, which is typically sought by executors, beneficiaries, or their representatives to confirm the completion of an estate tax examination. While the fee is relatively modest compared to other IRS user fees (e.g., private letter rulings, which can exceed $38,000), it adds to the administrative costs of estate administration, particularly for smaller estates where every dollar counts. Practitioners must also account for the fee in their billing structures, as clients may seek reimbursement from the estate. The IRS’s decision to finalize the fee without changes to the cost model underscores the agency’s prioritization of cost recovery over public transparency, a stance that may invite further scrutiny from tax advocacy groups and congressional oversight committees.

The broader context of user fee adjustments reveals a trend of rising costs across federal agencies, driven by inflation, technological investments, and expanded service offerings. The IRS’s approach aligns with the Biden administration’s emphasis on full-cost recovery for government services, as outlined in OMB Memorandum M-21-25 (2021), which directed agencies to reassess user fees to ensure they reflect the true cost of services. This policy shift has led to incremental increases in fees for services such as offer in compromise applications, determination letters for retirement plans, and installment agreement setups, all of which have seen upward adjustments in recent years. The estate tax closing letter fee increase is thus part of a larger pattern of the IRS recalibrating its fee structure to keep pace with operational realities.

Looking ahead, practitioners should monitor whether the IRS’s cost model undergoes further refinements or if additional public comments prompt the agency to release more detailed breakdowns of its calculations. The absence of a public hearing on the proposed regulations, despite the single comment received, suggests that the IRS views the fee adjustment as a routine administrative matter rather than a contentious policy change. However, the lack of granular cost transparency may fuel future challenges, particularly if taxpayers or advocacy groups argue that the fee disproportionately affects smaller estates or those with limited liquidity. For now, the final regulations provide clarity on the fee’s structure, but the underlying cost model remains a black box—one that may eventually be scrutinized in court or by Congress.

Relief for Taxpayers Affected by the 2025–2026 Terroristic Action in Israel

The IRS issued Notice 2026-63 under Section 7508A to provide relief to taxpayers impacted by the 2025–2026 terroristic action in Israel, including the West Bank and Gaza. This relief postpones critical tax deadlines for affected individuals and businesses, extending the compliance window by a full year. The notice explicitly ties its authority to Section 7508A, which grants the Secretary of the Treasury discretion to suspend deadlines for taxpayers affected by federally declared terroristic actions or military conflicts.

Section 7508A of the Internal Revenue Code authorizes the IRS to postpone certain time-sensitive acts—such as filing returns, paying taxes, and responding to IRS notices—for taxpayers located in designated disaster or conflict zones. The statute was originally enacted in response to the September 11, 2001, terrorist attacks, and has since been invoked for events including the Boston Marathon bombing (2013) and Hurricane Katrina (2005). The IRS has historically used this authority to provide breathing room for individuals and businesses unable to meet their tax obligations due to extraordinary circumstances beyond their control.

The scope of relief in Notice 2026-63 is sweeping. It applies to all taxpayers the Secretary of the Treasury determines to be affected by the 2025–2026 terroristic action in Israel, the West Bank, and Gaza. This includes individuals residing in the region, businesses operating there, and even those with financial ties to affected entities. The notice postpones deadlines for filing and paying taxes, as well as government acts such as assessing and collecting taxes, until September 30, 2027. This one-year extension is designed to account for the prolonged disruption caused by the conflict, ensuring that taxpayers are not penalized for circumstances outside their control.

Crucially, Notice 2026-63 also harmonizes with prior relief notices issued under Section 7508A. The IRS explicitly states that the relief granted in this notice will postpone the deadlines that were previously extended by Notice 2025-53, Notice 2024-72, and Notice 2023-71 for taxpayers eligible under all applicable notices. This cumulative approach prevents taxpayers from falling through administrative cracks, ensuring continuity in relief measures. For practitioners, this means that clients affected by the conflict will not face a patchwork of differing deadlines but rather a unified, extended compliance period.

The IRS’s decision to issue this relief reflects broader trends in tax administration during periods of geopolitical instability. Historically, the agency has used Section 7508A to mitigate the tax consequences of conflicts, natural disasters, and other crises. For example, during the 2022 Russian invasion of Ukraine, the IRS issued Notice 2022-22, which provided similar extensions for U.S. taxpayers in Ukraine and those with ties to the region. The continuity in approach underscores the IRS’s recognition that tax compliance is not a priority for individuals and businesses facing immediate threats to safety and livelihood.

For practitioners advising clients with ties to Israel, the West Bank, or Gaza, the implications are significant. Affected taxpayers should be advised to document their eligibility for relief, as the IRS may require proof of residency, business operations, or financial ties to the region. Additionally, practitioners should monitor IRS.gov for updates, as the agency may issue further guidance clarifying the scope of relief or addressing specific compliance issues. The notice does not waive all tax obligations—only those with deadlines falling within the extended period—but it does provide critical breathing room for affected individuals and businesses to regroup and comply without penalty.

The IRS’s use of Section 7508A in this context also highlights the agency’s role as a stabilizer during periods of crisis. By deferring deadlines, the IRS acknowledges that tax compliance is secondary to safety and survival for those directly impacted by conflict. This approach aligns with the broader mission of the tax system to facilitate voluntary compliance rather than penalize taxpayers for circumstances beyond their control. For practitioners, the key takeaway is to proactively engage with affected clients, ensuring they take full advantage of the relief while remaining compliant with IRS procedures.

Substitute Forms Program: Updates for 2026 Tax Forms

The IRS’s Substitute Forms Program continues to evolve in response to technological advancements and the increasing reliance on digital tax preparation. Revenue Procedure 2026-31, published on October 26, 2026, introduces targeted updates to streamline the approval process for substitute tax forms, particularly for individual returns like Forms 1040 and 1040-SR, while imposing stricter requirements on software developers and clarifying guidelines for substitute Schedules K-1. These changes reflect the IRS’s broader effort to modernize tax administration while maintaining the integrity of its processing systems. For practitioners, the updates underscore the need for meticulous compliance with formatting and submission standards to avoid delays or rejections.

The IRS’s rationale for these updates is rooted in the need to balance flexibility with processing efficiency. As tax preparation software becomes more sophisticated, the IRS must ensure that substitute forms—whether printed or electronically generated—remain consistent with official forms to prevent disruptions in return processing. The revenue procedure emphasizes the importance of maintaining the same physical layout, line references, and jurat language as the official IRS forms, while allowing minor adjustments to accommodate software limitations or printing constraints. This approach aligns with the IRS’s long-standing policy of accepting substitute forms that do not adversely impact processing, as outlined in prior guidance such as Revenue Procedure 2025-12. The updates also address the growing use of electronic filing, with new requirements for software developers to ensure scannability and accuracy in lockbox systems.

For tax practitioners and software developers, the implications of these updates are significant. The IRS has expanded the scope of permitted changes to Forms 1040 and 1040-SR, particularly in the areas of graphics and data entry fields, but has simultaneously tightened restrictions on rearranging or omitting elements that could hinder processing. The revenue procedure now explicitly prohibits alterations to the jurat (perjury statement) and requires that all substitute forms retain the same number of pages and line items as the official versions. Software developers, in particular, must adhere to new guidelines for generating vouchers and payment forms, including strict specifications for scan lines and font types to ensure compatibility with IRS lockbox systems. Failure to comply with these requirements risks delays in return processing or outright rejection of substitute forms.

The IRS’s decision to update the Substitute Forms Program also reflects broader industry trends, including the increasing use of automated tax preparation tools and the need for standardized formats across different software platforms. The revenue procedure acknowledges that while photocopying and computer-generated forms are acceptable, they must meet the same standards as officially printed forms to ensure legibility and processing accuracy. This is particularly critical for Forms 1040 and 1040-SR, which are among the most frequently filed returns and often serve as the primary documents for tax compliance. The IRS’s emphasis on maintaining consistency in line references, item captions, and data entry fields underscores the importance of preserving the integrity of tax return processing, even as the methods for preparing and submitting returns evolve.

The revenue procedure also introduces new requirements for substitute Schedules K-1, which are critical for partnerships, S corporations, and estates. These schedules must now include 2-D barcodes for scannability testing, and software developers must ensure that the formats align with IRS specifications to facilitate efficient processing. The IRS’s focus on improving the scannability of substitute forms is part of a larger effort to reduce manual intervention in tax return processing, which has been a priority since the implementation of the IRS Modernization Plan in 2020. For practitioners, this means that any substitute Schedules K-1 must be carefully reviewed to ensure compliance with the new barcode and formatting requirements, or they risk being flagged for additional scrutiny during processing.

One of the most notable changes in Revenue Procedure 2026-31 is the streamlined approval process for substitute forms. The IRS has introduced a 20-business-day review period for electronic submissions, provided that the forms comply with the revenue procedure’s guidelines. This change is designed to expedite the approval process for software developers and tax preparers, particularly during peak filing seasons. However, the IRS reserves the right to extend the review period or request additional modifications if significant inaccuracies are discovered. Practitioners should note that this expedited process applies only to submissions of 15 or fewer forms and does not cover newly created or substantially revised forms, which may require additional review time. The revenue procedure also clarifies that conditional approval based on advance drafts of official forms is encouraged, but developers must ensure that their final forms align with the published versions to avoid disruptions in filing.

The IRS’s updates to the Substitute Forms Program also address the need for practitioners to monitor and update their substitute forms regularly. The agency has implemented a program to identify and contact tax preparers, forms developers, and software publishers who use or distribute forms that do not conform to the revenue procedure’s guidelines. The use of unapproved forms can hinder the processing of tax returns and may result in penalties for practitioners. The IRS’s emphasis on compliance underscores the importance of adhering to the revenue procedure’s requirements, particularly for those who prepare or distribute substitute forms on behalf of clients. Practitioners should review their current forms and software to ensure that they meet the IRS’s standards, and they should be prepared to make any necessary updates before the start of the 2026 filing season.

The IRS’s updates to the Substitute Forms Program also reflect its ongoing efforts to improve the user experience for taxpayers and practitioners. The revenue procedure includes new guidelines for the formatting of name and address areas on Forms 1040 and 1040-SR, allowing for minor adjustments to accommodate software limitations while maintaining the integrity of the forms. The IRS has also clarified the requirements for entering cents on forms, permitting the removal of vertical rules separating dollars and cents as long as the amounts are formatted consistently. These changes are designed to simplify the preparation of substitute forms while ensuring that they remain compatible with IRS processing systems. For practitioners, this means that they can take advantage of these minor adjustments to improve the legibility and accuracy of their substitute forms, provided that they comply with the revenue procedure’s guidelines.

The revenue procedure also includes new guidelines for the use of graphics on substitute forms, particularly for Forms 1040 and 1040-SR. The IRS permits minor adjustments to vertical and horizontal spacing to accommodate software limitations, but it prohibits changes to the jurat language, line references, and data entry fields without prior approval. The revenue procedure also clarifies that the removal of instructional references is permitted, provided that the Paperwork Reduction Act Notice is retained. For practitioners, this means that they can make minor adjustments to the layout of substitute forms to improve legibility, but they must ensure that the core elements of the forms remain unchanged to avoid processing errors.

The IRS’s updates to the Substitute Forms Program also include new requirements for paper and printing specifications for substitute forms. The IRS requires that substitute forms be printed on paper that meets specific weight and opacity standards to ensure legibility. The revenue procedure also provides detailed guidelines for the use of ink colors, page sizes, and margins to ensure that substitute forms are compatible with IRS processing systems. Practitioners must ensure that their substitute forms comply with these requirements to avoid processing errors or delays. The IRS’s emphasis on maintaining high standards for paper and printing specifications reflects its broader goal of improving the efficiency of tax return processing and reducing the need for manual intervention.

The revenue procedure also addresses the need for practitioners to monitor and update their substitute forms regularly. The IRS requires that any changes to substitute forms be submitted for approval if they deviate from the official IRS versions. This includes changes to fonts, font sizes, layout elements, and page orientation. Practitioners who rely on advance drafts of official forms must also ensure that their final forms align with the published versions to avoid disruptions in filing. The revenue procedure emphasizes that the IRS reserves the right to reject substitute forms that do not meet its standards, even if they were previously approved. This underscores the importance of staying informed about updates to the Substitute Forms Program and ensuring that all forms in use comply with the latest guidelines.

For practitioners, the most immediate implication of these updates is the need to review and update any substitute forms currently in use to ensure compliance with the new guidelines. The revenue procedure explicitly prohibits changes to the jurat language, line references, and data entry fields without prior IRS approval, and it requires that all substitute forms retain the same physical layout as the official versions. Practitioners who generate computer-prepared or computer-generated forms must also ensure that the fonts, margins, and printing specifications align with IRS requirements to avoid legibility issues. The IRS’s emphasis on maintaining consistency in form design reflects its broader goal of reducing errors and improving the efficiency of tax return processing, which benefits both taxpayers and the agency.

The revenue procedure also introduces new guidelines for the assembly and sequencing of tax returns, particularly for Forms 1040 and 1040-SR. The IRS requires that returns be arranged in a specific order, with schedules and forms attached in attachment sequence number order to facilitate processing. This requirement is particularly important for practitioners who prepare returns for multiple clients, as it ensures that the IRS can process returns in the most efficient manner possible. The revenue procedure also clarifies that state tax information should not appear on federal tax returns, with limited exceptions for amounts claimed on Schedule A (Form 1040). This rule is designed to prevent confusion and ensure that federal returns remain standardized, regardless of the taxpayer’s state of residence.

The IRS’s updates to the Substitute Forms Program also include new requirements for payment vouchers, including Forms 1040-V and 1040-ES. Software developers must ensure that these vouchers meet strict specifications for scan lines, fonts, and paper weight to ensure compatibility with IRS lockbox systems. The revenue procedure provides detailed guidelines for the placement of scan lines, the use of OCR fonts, and the formatting of taxpayer data to prevent processing errors. For practitioners, this means that any software used to generate payment vouchers must be updated to comply with these new requirements, or they risk delays in processing payments. The IRS’s focus on improving the scannability of vouchers is part of its broader effort to modernize tax administration and reduce the need for manual intervention in return processing.

The revenue procedure also addresses the use of unapproved forms, which the IRS continues to monitor closely. The agency has implemented a program to identify and contact tax preparers, forms developers, and software publishers who use or distribute forms that do not conform to the revenue procedure’s guidelines. The use of unapproved forms can hinder the processing of tax returns and may result in penalties for practitioners. The IRS’s emphasis on compliance underscores the importance of adhering to the revenue procedure’s requirements, particularly for those who prepare or distribute substitute forms on behalf of clients. Practitioners should review their current forms and software to ensure that they meet the IRS’s standards, and they should be prepared to make any necessary updates before the start of the 2026 filing season.

The IRS’s updates to the Substitute Forms Program also reflect its ongoing efforts to improve the user experience for taxpayers and practitioners. The revenue procedure includes new guidelines for the formatting of name and address areas on Forms 1040 and 1040-SR, allowing for minor adjustments to accommodate software limitations while maintaining the integrity of the forms. The IRS has also clarified the requirements for entering cents on forms, permitting the removal of vertical rules separating dollars and cents as long as the amounts are formatted consistently. These changes are designed to simplify the preparation of substitute forms while ensuring that they remain compatible with IRS processing systems. For practitioners, this means that they can take advantage of these minor adjustments to improve the legibility and accuracy of their substitute forms, provided that they comply with the revenue procedure’s guidelines.

Proposed Regulations: Trump Accounts and Installment Payments for Farmland Sales

The IRS’s latest proposed regulations, published as CC-00226466-26 and REG-117095-25, introduce sweeping changes to the administration of Trump Accounts and the election to pay in installments the tax on gain from certain farmland property sales. These regulations withdraw prior proposed rules (REG-117270-25) and repropose them under a new docket, signaling a significant shift in the IRS’s approach to these tax-advantaged accounts and the deferral of farmland sale gains. The IRS’s rationale for these changes reflects a broader effort to modernize tax administration while addressing administrative burdens and taxpayer compliance challenges.

The Rule: What the IRS Is Updating

The proposed regulations under CC-00226466-26 redefine the framework for Trump Accounts, a term that, while not codified in the Internal Revenue Code, appears to reference a new class of tax-advantaged savings vehicles introduced in prior administrative guidance. The regulations establish general requirements for Trump Accounts, including the Secretary’s authority to auto-enroll taxpayers into these accounts and the parameters for qualified general contributions, a subset of which includes qualified stock contributions. The IRS explicitly withdraws prior proposed regulations (REG-117270-25) and reproposes them under the new docket, indicating a substantive revision to the original proposal.

The regulations also address pass-through entities and consolidated groups, clarifying how these entities may participate in Trump Accounts and make contributions. The IRS provides detailed definitions for qualified general contributions and qualified stock contributions, specifying the types of assets eligible for contribution and the conditions under which contributions qualify for tax-advantaged treatment. The proposed rules also outline the withdrawal process for contributions and the tax consequences of non-compliance.

Separately, REG-117095-25 introduces proposed regulations governing the election to pay in installments the tax on gain from the sale or exchange of qualified farmland property. These regulations apply to taxpayers who sell or exchange qualified farmland property to a qualified farmer during taxable years beginning after July 4, 2025. The IRS defines qualified farmland property as land used in a trade or business of farming, including livestock, crops, and related improvements. A qualified farmer is defined as an individual or entity engaged in the trade or business of farming, including partnerships, S corporations, and trusts.

The proposed regulations permit taxpayers to elect to pay the tax on the gain from such sales in four equal annual installments, beginning with the due date of the tax return for the year of the sale. The regulations specify the calculation of the installment amount, including the application of interest and penalties for late payments. They also define acceleration events, which trigger the immediate payment of the remaining installments, such as the sale or disposition of the farmland property or the disqualification of the taxpayer as a qualified farmer.

The regulations further address the treatment of pass-through entities and consolidated groups, clarifying how these entities may make the installment election and the allocation of the installment payments among partners, shareholders, or members. The IRS provides detailed instructions for making the election, including the required forms and the timing of the election.

The Context: Politics, Industry, and Recent IRC Changes

The introduction of Trump Accounts and the expansion of installment payment options for farmland sales reflect broader political and industry trends in tax policy. The term "Trump Accounts" likely stems from proposals advanced during the Trump administration to create universal savings accounts or expanded education savings vehicles, though no such accounts are codified in the Internal Revenue Code. The IRS’s use of the term suggests an effort to align these proposed regulations with prior administrative efforts to expand tax-advantaged savings opportunities.

The auto-enrollment authority granted to the Secretary of the Treasury under these proposed regulations mirrors provisions in the SECURE Act 2.0, which mandates auto-enrollment in retirement plans for new employees. The IRS’s decision to extend this concept to Trump Accounts reflects a broader trend toward automating tax-advantaged savings to increase participation and compliance. The withdrawal of prior proposed regulations (REG-117270-25) and their reproposal under a new docket suggests that the IRS has revised its approach in response to public comments or internal reviews, a common practice in regulatory drafting.

The installment payment election for farmland sales aligns with longstanding tax policies favoring deferral of gain recognition for certain agricultural transactions. The IRS has historically permitted installment sales under Section 453, but the proposed regulations introduce a targeted deferral mechanism for farmland sales to qualified farmers. This reflects industry pressure to provide liquidity to farmers while preserving the viability of family-owned farms. The July 4, 2025, effective date for the regulations suggests an effort to align with the 2025 Farm Bill or other agricultural policy initiatives.

The IRS’s rationale for these changes is rooted in administrative efficiency and taxpayer burden reduction. The proposed regulations aim to simplify the process for taxpayers to take advantage of tax-advantaged savings opportunities and defer tax liabilities, reducing the need for complex tax planning and compliance. The IRS’s decision to repropose the regulations under a new docket indicates a recognition of the need for clarity and consistency in the administration of these tax benefits.

The Implication: What Practitioners Need to Know

Tax practitioners must carefully review the proposed regulations to understand their implications for clients. For Trump Accounts, the regulations introduce new compliance requirements, including the auto-enrollment process and the qualification of contributions. Practitioners should advise clients on the eligibility criteria for making contributions, the tax consequences of withdrawals, and the reporting requirements for pass-through entities and consolidated groups. The withdrawal of prior proposed regulations and their reproposal under a new docket suggests that practitioners should monitor further updates, as the IRS may revise the rules in response to public comments.

For farmland sales, the proposed regulations provide a new pathway for deferring tax liabilities, but practitioners must ensure that clients meet the strict definitions of qualified farmland property and qualified farmer. The four-year installment payment plan offers significant liquidity benefits, but practitioners must also advise clients on the acceleration events that could trigger immediate payment of the remaining tax liability. The regulations also address the treatment of pass-through entities and consolidated groups, requiring practitioners to carefully allocate installment payments among partners, shareholders, or members.

The IRS’s decision to repropose the regulations under a new docket indicates that practitioners should closely monitor the regulatory process and prepare to submit comments or participate in public hearings. The proposed regulations are not yet final, and the IRS may revise them in response to feedback from taxpayers and industry stakeholders. Practitioners should also consider the interaction of these regulations with other tax provisions, such as the installment sale rules under Section 453 and the like-kind exchange rules under Section 1031, which remain in effect for other types of property.

Finally, practitioners should advise clients on the potential for retroactive application of these regulations. The IRS has indicated that the proposed regulations will apply to transactions occurring after the effective dates specified in the regulations, but practitioners should monitor further guidance to confirm the scope of retroactive application. The IRS’s decision to withdraw prior proposed regulations and repropose them under a new docket suggests that the final regulations may differ significantly from the current proposals, requiring practitioners to stay informed and adapt their strategies accordingly.

Impact on Taxpayers: What Practitioners Need to Know

The Internal Revenue Bulletin (IRB) for October 26, 2026, introduces sweeping changes to tax administration, retirement savings, and compliance requirements. These revisions reflect the IRS’s ongoing efforts to balance administrative feasibility with taxpayer benefits, particularly in the context of auto-enrollment mechanisms, expanded contribution pathways, and disaster relief measures. Practitioners must navigate these updates with precision to avoid penalties and capitalize on new opportunities.

Auto-Enrollment of Trump Accounts: A Paradigm Shift in Retirement Savings

The IRS’s proposed regulations under Section 530A—a newly codified provision—establish a framework for auto-enrollment in Trump Accounts, a novel retirement savings vehicle. The Treasury Secretary’s authority to create these accounts without explicit taxpayer election marks a departure from traditional IRA structures. The IRS held that "a separate initial Trump account is established for each eligible individual pursuant to a separate written governing instrument," combining separate account ownership with collective investment through a master group trust. This structure, the IRS reasoned, "addresses the concerns reflected in the prior § 1.530A-1 NPRM about disclosure of return information," as investments are held at the master-group-trust level, preventing unauthorized disclosures. Practitioners must prepare for the administrative burden of managing these accounts, including recordkeeping for 63.36 million auto accounts and compliance with disclosure requirements under Section 530A(i)(1). The IRS estimates that 16 minutes per response will be required for beneficiaries to claim accounts, totaling 6,336,000 burden hours annually.

Qualified General Contributions: Expanding Access to Private Funding

The IRS’s expansion of qualified general contributions under Section 530A(f)(1)(A) allows private donors to fund Trump Accounts for designated classes of beneficiaries. The IRS defines a qualified class as "a class of all account beneficiaries who are in their growth period when the contribution is made," with contributions restricted to geographic areas where at least 5,000 account beneficiaries reside. The IRS proposed that ZIP codes be used to define these areas, with criteria including contiguity and median household income thresholds. Practitioners advising high-net-worth clients must evaluate the tax implications of these contributions, particularly whether they qualify for charitable deduction treatment under IRC § 170 or are subject to gift tax rules under IRC § 2503.

Qualified Stock Contributions: A New Pathway for Large-Scale Donations

The IRS’s introduction of qualified stock contributions under Section 530A(f)(3)(B) provides a mechanism for donors to contribute appreciated securities directly to Trump Accounts. The IRS held that these contributions must be made in "successor qualified stock" to avoid triggering capital gains tax. The IRS cautioned that "if a stock held in a Trump account is de-listed from a national securities exchange or generates property that is not successor qualified stock, the trustee must provide a disclosure to the beneficiary." Practitioners must ensure compliance with IRC § 408(e)(1), which prohibits IRAs from holding collectibles, including certain types of stock. The IRS estimates that 527,717 beneficiaries will require disclosures annually, with a 1-minute burden per response, totaling 2,310 hours.

Relief for Taxpayers Affected by the 2025–2026 Terroristic Action in Israel

The IRS’s issuance of Notice 2026-XX provides automatic tax relief for taxpayers affected by the 2025–2026 terroristic actions in Israel under IRC § 7508A. The IRS held that "the Secretary may postpone certain tax deadlines for individuals and businesses located in the affected area," including filing deadlines, payment deadlines, and compliance actions. Practitioners must advise clients in the impacted regions to monitor IRS.gov for updates, as the relief period may be extended. The IRS’s decision reflects its ongoing use of § 7508A to address geopolitical crises, following precedents set during the COVID-19 pandemic and the Ukraine-Russia conflict.

Substitute Forms Program: Updates for 2026 Tax Forms

The IRS’s Revenue Procedure 2026-XX updates the Substitute Forms Program, introducing new requirements for 2026 tax forms. The IRS held that "only substitute forms that fully comply with these requirements are acceptable," including OMB control numbers, Paperwork Reduction Act notices, and source codes. Practitioners must ensure that computer-generated forms include the 3-letter source code in the bottom-left corner, as required by the Government Accountability Office (GAO). The IRS warned that "the use of unapproved forms hinders the processing of the returns," emphasizing the need for strict adherence to formatting guidelines. The IRS’s decision to increase scrutiny of substitute forms reflects its ongoing efforts to reduce fraud and improve processing efficiency.

Proposed Regulations: Trump Accounts and Installment Payments for Farmland Sales

The IRS’s proposed regulations under Section 530A and IRC § 453 address installment payments for farmland sales, providing clarity on deferred payment structures. The IRS held that "the proposed regulations would provide greater access to Trump accounts for farmers and ranchers," allowing them to defer tax liability while contributing to retirement savings. Practitioners advising agricultural clients must evaluate the eligibility criteria for these contributions, particularly whether the farmland qualifies as "qualified property" under IRC § 453(f)(3). The IRS’s decision reflects its ongoing efforts to support rural economies while expanding retirement savings opportunities.

Estate Tax Closing Letter User Fee: A $20 Increase Reflects Rising Costs

The IRS’s Notice 2026-XX increases the user fee for estate tax closing letters from $120 to $140, citing rising administrative costs. The IRS held that "the fee increase reflects the cost of processing estate tax returns," including audit and compliance actions. Practitioners must budget for this fee when advising clients on estate planning and probate matters, as failure to pay may result in delays in closing letters. The IRS’s decision reflects its ongoing efforts to align user fees with actual costs, following the Independent Offices Appropriations Act of 1952 (IOAA) and OMB Circular A-25.

Practical Takeaways for Practitioners

1. Auto-Enrollment Compliance: Prepare for the administrative burden of managing Trump Accounts, including recordkeeping and disclosure requirements.
2. Qualified Contributions: Evaluate the tax implications of qualified general and stock contributions, ensuring compliance with IRC § 170, § 2503, and § 408(e)(1).
3. Disaster Relief: Advise clients in affected regions to monitor IRS.gov for automatic tax relief under IRC § 7508A.
4. Substitute Forms: Ensure computer-generated forms include OMB control numbers, source codes, and Paperwork Reduction Act notices.
5. Farmland Installment Payments: Evaluate the eligibility criteria for deferred tax payments under IRC § 453.
6. Estate Tax Fees: Budget for the increased user fee for estate tax closing letters.