August 28 – September 15, 2025

Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for August 28, 2025 – September 15, 2025.

August 28, 2025: The IRS issued Revenue Procedure 2025-28, providing guidance on making certain elections for domestic research or experimental expenditures under § 70302(f) of the One Big Beautiful Bill Act (OBBBA). Revenue Procedure 2025-28 specifically modifies procedures under Internal Revenue Code (Code) § 446 and Treasury Regulation § 1.446-1(e) for obtaining automatic consent from the commissioner of the Internal Revenue to:

Change methods of accounting for research or experimental expenditures under § 174, as amended by the Tax Cuts and Jobs Act of 2017

Change methods of accounting to comply with §§ 174 and 174A, as amended by OBBBA.

Revenue Procedure 2025-28 also prescribes the procedure for electing to amortize domestic research or experimental expenditures paid or incurred in the taxable years beginning after December 31, 2024, under Code § 174A(c).

September 2, 2025: The IRS issued Tax Tip 2025-59, reminding employers that they can use educational assistance programs to help employees pay for various educational expenses for undergraduate- or graduate-level studies. These programs can help pay for books, equipment, supplies, tuition, and other fees, as well as for qualified education loans. This tax-free benefit is allowed only up to $5,250 per employee per year and does not include meals, lodging, or transportation.

September 3, 2025: In Medtronic, Inc. v. Commissioner, the US Court of Appeals for the Eighth Circuit vacated the US Tax Court’s order, rejecting the Tax Court’s three-step unspecified method to value the arm’s length royalty rate for intercompany licensing agreements. The Eight Circuit also held that the Tax Court incorrectly rejected the application of the comparable profits method, explaining that, on remand, the Tax Court should consider whether the proposed comparable companies were “sufficiently similar” to Medtronic Puerto Rico.

September 15, 2025: The IRS released Internal Revenue Bulletin 2025–38, which includes Notice 2025-38. This notice republishes the inflation adjustment factor and the clean electricity production credit allowable under Code § 45Y for the 2025 calendar year. The inflation adjustment factor – and applicable amounts allowable for the 2025 calendar year – are used to determine the amount of Code § 45Y credits that may apply to calendar year 2025 sales, consumption, or storage of electricity produced at a qualified facility in the United States.

The IRS also released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums, and Chief Counsel Advice).