Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for June 18, 2025 – July 11, 2025.
“One Big Beautiful Bill Act” tax provisions
On July 4, 2025, US President Donald Trump signed the “One Big Beautiful Bill Act” (OBBBA) into law, which enacted several changes to federal tax law. Some of the key changes that affect IRS administration and/or federal tax procedure include:
Form 1099-NEC reporting threshold. The reporting threshold for payments to non-employees for personal services will be raised from $600 to $2,000 beginning in 2026. While amounts below the threshold will still constitute income subject to taxation, an employer will not be subject to backup withholding requirements or be required to issue a Form 1099 if the total value of the services provided cost less than $2,000.
Controlled foreign corporations (CFCs). The look-through rule for CFCs under Internal Revenue Code Section 954 is permanently extended. New Section 951B extends the CFC inclusion rules to “foreign controlled US shareholders” of foreign-controlled CFCs (the US shareholder must own more than 50% by value or vote of the foreign corporation to be designated as such). The tax law also creates a one-month deferral election for determining a CFC’s tax year.
Opportunity zone designation. The OBBBA establishes a permanent opportunity zone policy, maintaining current designation guidelines. For investors with investments made after December 31, 2026, gains deferred via investment in the Qualified Opportunity Zone program will now be recognized on the fifth anniversary of the investment date.
Additionally, the OBBBA introduces a detailed reporting regime as included in new Code Sections 6039K and 6039L. A penalty provision in Code Section 6726 is also included to improve oversight and transparency regarding the economic impact of qualified opportunity investments. The reporting penalties can be as high as $10,000 per return or up to $50,000 for qualified opportunity funds with assets worth more than $10 million. The US Department of the Treasury must publish annual reports on opportunity zone investments and economic performance of the designated tracts.
Employee Retention Credit (ERC) update. Pending ERC claims filed after January 31, 2024, for the third or fourth quarters of 2021 are disallowed under the tax law. The statute of limitations on assessment for ERC (i.e., the period during which the IRS may recapture ERC through assessment) was also extended to six years. The OBBBA also imposes penalties on ERC promoters who fail to comply with due diligence requirements and demonstrate that they did not facilitate the making of fraudulent claims.
IRS guidance
June 23, 2025: The IRS issued Notice 2025-30, publishing the inflation adjustment factor and reference price for calendar year 2025 for the renewable electricity production credit under Code Section 45. The inflation adjustment factor for calendar year 2025 for qualified energy resources is 1.9971, and the reference price for calendar year 2025 for facilities producing electricity from wind is 3.1 cents per kilowatt hour. The IRS has not yet issued guidance on reference prices for other renewable energy sources.
June 30, 2025: The IRS issued Notice 2025-32 within Internal Revenue Bulletin 2025-27, updating certain tables pertaining to the enhanced oil recovery credit under Code Section 43(b). The notice includes the secretary of the Treasury’s published inflation adjustment factor used for 2025 credit determination, as well as the phase-out amount for taxable years beginning in the 2025 calendar year.
Because the reference price for the 2024 calendar year multiplied by the inflation adjustment factor for the 2025 calendar year exceeds a certain threshold, the enhanced oil recovery credit for qualified costs paid or incurred in 2025 is phased out completely for the 2025 tax year.
June 30, 2025: Bulletin 2025-27 highlighted more information relevant to the oil and gas industry in Notice 2025-34, which provides the applicable reference price for qualified natural gas production from qualified marginal wells during calendar year 2025. The applicable reference price for taxable years beginning in calendar year 2025 is $1.64 per 1,000 cubic feet.
The notice also provides the credit amount used for the purpose of determining the marginal well production credit, found under Code Section 451. The credit amount for taxable years beginning in calendar year 2025 is $0.79 per 1,000 cubic feet.
July 2, 2025: The IRS withdrew regulations under Code Section 382(h) related to built-in gain and loss, publishing the withdrawal in the Federal Register. The document withdraws two notices of proposed regulations regarding the treatment of built-in items of income, gain, deduction, and loss taken by a loss corporation after an ownership change.
The proposed regulations in question date back to 2019 and would have adopted, as mandatory (subject to certain modifications), the safe harbor for the net unrealized built-in gain and loss computations defined in Notice 2003-65. Called the “1374 approach,” these regulations received criticism from practitioners and taxpayers, so the IRS has chosen to withdraw the regulations. While the Treasury is expected to issue a revised notice of proposed rulemaking regarding Code Section 382(h), taxpayers may continue to rely on the approaches set forth in Notice 2003-65 for applying Section 382(h) to an ownership change.
July 7, 2025: The IRS released Internal Revenue Bulletin 2025-28. It includes information that taxpayers may use to determine whether they meet certain requirements under the Statistical Area or Coal Closure Categories as described in Sections 3.03 and 3.04 of Notice 2023-29 for purposes of qualifying for energy community bonus credit amounts or rates under Code Sections 45, 45Y, 48, and 48E.
Bulletin 2025-28 also includes Revenue Ruling 2025-13, which posts the federal rates, adjusted federal rates, adjusted federal long-term rate, and long-term tax exempt rate. For purposes of Code Sections 382, 1274, 1288, and 7872, among other sections, the tables set forth the rates for July 2025.
July 11, 2025: The IRS withdrew regulations under Code Section 6045 requiring certain decentralized finance industry participants to file and furnish information returns as brokers. Congress passed a joint resolution disapproving the final rule titled Gross Proceeds Reporting by Brokers that Regularly Provide Services Effectuating Digital Asset Sales, originally enacted in December 2024.
The IRS initially provided transitional relief from the penalties for brokers who failed to report these gross proceeds correctly, as issued in Notice 2025-33 and identified in the previous IRS Roundup. However, this final regulation withdrawal makes the transitional relief permanent.
The IRS also released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums, and Chief Counsel Advice).
Lindsay Keiser, a summer associate in the Washington, DC, office, also contributed to this blog post.
