Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for November 25, 2025 – December 10, 2025.
November 25, 2025: The IRS released Notice 2025-70, requesting comments on the implementation of a new individual tax credit under the newly enacted Section 25F under the One Big Beautiful Bill Act (OBBBA). Beginning in 2027, taxpayers may claim up to $1,700 under Section 25F for contributions to Scholarship Granting Organizations that provide scholarships for elementary and secondary school students from low- and middle-income families. Comments are due by December 26, 2025.
November 25, 2025: The IRS released Notice 2025-72, providing guidance on the OBBBA’s repeal of the one-month deferral election under Section 898(c)(2) for specified foreign corporations (SFCs), effective for taxable years beginning after November 30, 2025. For SFCs that previously elected a one-month deferral, the first required tax year will be a short period ending on the same date as their majority US shareholder’s tax year. The notice addresses administrability concerns and provides a method for allocating foreign income taxes between this short year and the next year for subpart F, global intangible low-taxed income (GILTI), and foreign tax credit purposes. The notice also previews proposed Section 987 regulations that would modify the 10-year transition election for recognizing pre-transition gain or loss, allowing ratable recognition over 120 months. Comments are requested by January 24, 2026, particularly on the allocation rule and other multiyear provisions affected by short tax years.
December 2, 2025: The IRS released Notice 2025-68, which addresses the new Trump Accounts. Created by the OBBBA, Trump Accounts are a type of traditional individual retirement account for individuals under 18 years of age who have a social security number issued before the date of the election. The notice provides initial guidance on the potential benefits of these accounts and outlines details of the pilot program under Section 6364. Comments on the guidance are due by February 20, 2026, though the IRS notes that proposed regulations governing the election to open a Trump Account and the pilot program contribution election under Section 6434 may be issued before the comment period closes.
December 3, 2025: The IRS released Announcement 2025-22 and Announcement 2025-23, identifying taxpayers and the amounts of Section 48C credits allocated for projects that received certifications under the Section 48C(e) advanced energy project program. Section 48C(e)(1) directs the secretary of the treasury to establish a program to award certifications for qualified investments eligible for Section 48C credits. The US Department of the Treasury and the IRS provided two allocation rounds. Announcement 2025-22 lists Round One taxpayers and allocations, and Announcement 2025-23 lists Round Two taxpayers and allocations.
December 4, 2025: The IRS released Notice 2025-75, which provided a transition rule and proposed regulations that modify the application of Section 951(a)(2)(B) following the OBBBA changes for certain controlled foreign corporation (CFC) taxable years beginning before January 1, 2026. The notice clarifies that reductions to subpart F income and GILTI inclusions will not apply to dividends that do not increase a US person’s taxable income, with determinations made on a share-by-share basis. Subpart F and GILTI inclusions will now be linked to actual ownership periods to prevent any redundant overlaps. Dividends subject to the transition rule include those paid or deemed paid before a US shareholder acquires stock and those paid after June 28, 2025, but before the CFC’s first taxable year beginning after December 31, 2025. The notice also previews look-through rules for dividends received by partnerships and S corporations. Comments on this guidance are due by February 2, 2026, and taxpayers may rely on these rules until proposed regulations are issued, provided they apply them consistently and in their entirety.
December 4, 2025: The IRS released Notice 2025-77, offering interim guidance on the effective date of the OBBBA amendment to Section 960(d)(4). The amendment reduces the haircut applied under Section 960(d)(4), which reduces the foreign tax credit from 20% to 10% for certain previously taxed earnings and profits (PTEP) distributions because of a Section 951A(a) inclusion. The Section 960(d)(4) haircut becomes effective for inclusions occurring after June 28, 2025. The notice clarifies that the effective date is determined by the US shareholder’s taxable year, not the CFC’s, and introduces new PTEP tracking requirements that bifurcate Section 951A PTEP accounts into pre- and post-June 28, 2025, categories. The IRS also announced plans to modify the 2024 proposed PTEP regulations to align with the notice.
December 4, 2025: The IRS released Notice 2025-78, clarifying how the OBBBA’s exclusion from foreign-derived deduction-eligible income (FDDEI) applies to income from sales or dispositions of intangible property and property subject to depreciation, amortization, or depletion. The exclusion, effective for transactions after June 16, 2025, does not cover copyrighted works and generally does not apply depreciable property unless the property has been depreciable in the hands of the taxpayer. The notice also introduces an anti-abuse rule targeting related-party transactions structured to circumvent the FDDEI exclusion. Comments on this guidance are due by February 2, 2026, and taxpayers may rely on these rules until proposed regulations are issued, provided they apply them consistently and in their entirety.
The IRS also released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums, and Chief Counsel Advice).
Recent court opinion
November 25, 2025: The US Court of Federal Claims released its opinion in Kwong v. United States. Check out our recent insight on the case, which analyzes the Court’s holdings and provides key practice points for taxpayers.
Suzanne Golshanara, a law clerk in the Washington, DC, office, also contributed to this post.
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