Category: Newsletters – IRS – Company

Issue Number:   IR-2026-66

Inside This Issue

IRS CEO Frank J. Bisignano visits Ohio to tout Working Families Tax Cuts provisions on no tax on car loan interest, no tax on overtime, enhanced deduction for senior citizens

IR-2026-66, May 22, 2026

CLEVELAND – Internal Revenue Service Chief Executive Officer Frank J. Bisignano and Senator Bernie Moreno (OH) toured the Cleveland area today to highlight Working Families Tax Cuts Act provisions on no tax on car loan interest, no tax on overtime, and the enhanced deduction for seniors.

“It’s rewarding to visit Ohio and see first-hand how President Trump’s Working Families Tax Cuts are ensuring American families and taxpayers are keeping more of their hard-earned paychecks,” said IRS CEO Frank J. Bisignano. “Families in Ohio and the rest of the country are benefiting from the law, including the provisions that make it easier to afford a vehicle assembled in the United States, and reduce the tax burden on our great senior citizens and on those working overtime.”

“Thanks to the Working Families Tax Cuts, Ohioans received more of their hard-earned dollars back in their pockets,” said Senator Moreno. “I am proud to have spearheaded the auto loan interest tax deduction to allow hardworking Ohioans to afford American-made vehicles.”

At the Ford Engine Plant in Brook Park, OH, Bisignano and Moreno talked with manufacturing leadership, frontline workers, and regional auto dealers on the impact of tax policy on domestic manufacturing, affordability, and economic growth.

Moreno is a leader on the no tax on car loan interest provision. It is a deduction of up to $10,000 for individuals who paid interest on a loan to purchase a qualified vehicle after Dec. 31, 2024. The vehicle must be a new personal use vehicle with final assembly in the United States.

As of mid-May, about 54,000 Ohio filers claimed the deduction on car loan interest, totaling about $88 million. Nationally, over 1.4 million filers benefited from the deduction with about $2.6 billion claimed.

Bisignano and Moreno also visited the Middleburg Heights, OH, Social Security Administration office to highlight the benefits of the enhanced senior deduction in the Working Families Tax Cuts Act, which is $6,000 in addition to the standard deduction for individuals 65 or older. Married couples with two eligible spouses can receive an extra deduction of $12,000. Taxpayers must include their Social Security numbers on the return and file jointly, if they are married, to qualify.

About 1.4 million Ohioans benefitted from the senior deduction, with the total amount of deductions claimed approaching $7.9 billion. Nationally, over 35 million seniors benefitted from the deduction with more than $193 billion claimed.

Under the no tax on overtime provision, for tax years 2025 through 2028, individuals who receive qualified overtime compensation may deduct the amount that exceeds their regular rate of pay (generally, the “half” portion of “time-and-a-half” compensation) and is reported on a Form W-2 or Form 1099. The maximum annual deduction is $12,500 per individual.

More than 1.2 million Ohio filers claimed the overtime deduction, totaling about $3.4 billion. Nationally, about 29.4 million filers claimed the deduction totaling almost $92.7 billion.

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Issue Number: Tax Tip 2026-42

Homeowners should review any tax benefits for homeownership

The year is nearly half over which makes it a good time to remind homeowners and future homeowners to review their eligibility for any tax deductions, programs and housing allowances. If eligible, these tax benefits could help with some of the common costs of being a homeowner.

Deductible house-related expenses
Taxpayers must itemize their deductions to deduct homeownership expenses. Most home buyers take out a mortgage to buy their home, and their mortgage lender may bundle other home-related costs.
The costs the homeowner can deduct are:

• State and local real estate taxes, subject to a $40,000 limit or $20,000 if married filing separately
• Home mortgage interest, within the allowed limits

Homeowners can’t deduct any of the following items:

• Insurance including fire and comprehensive coverage and title insurance
• The amount applied to reduce the principal of the mortgage
• Wages paid to domestic help
• Depreciation
• The cost of utilities, such as gas, electricity or water
• Most settlement or closing costs
• Forfeited deposits, down payments or earnest money
• Internet or Wi-Fi system or service
• Homeowners’ association fees, condominium association fees or common charges
• Home repairs

Mortgage Interest Credit
The Mortgage Interest Credit helps people with lower income afford homeownership. Those who qualify can claim the credit each year for part of the home mortgage interest paid. A homeowner may be eligible for the credit if they were issued a qualified Mortgage Credit Certificate from their state or local government.

Ministers and military housing allowance
Ministers and members of the uniformed services who receive a nontaxable housing allowance can still deduct their real estate taxes and home mortgage interest. They don’t have to reduce their deductions based on the allowance.

More information

• Publication 530, Tax Information for Homeowners
• Publication 936, Home Mortgage Interest Deduction

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Issue Number: Tax Tip 2026-41

A more detailed look at what the right to be informed means

All taxpayers have the right to know what they need to do to comply with tax laws. This is one part of the Right to be Informed, one of the 10 fundamental rights that make up the IRS Taxpayer Bill of Rights.

The right to be informed means taxpayers have the right to:

• Know and understand what they need to do to comply with the tax laws
• Have clear explanations of the laws and IRS procedures in all forms, instructions, publications, notices and correspondence
• Be informed of IRS decisions about their tax accounts
• Receive clear explanations of the outcomes of IRS decisions

To make sure taxpayers are informed, the IRS will:

• Include within certain notices any amount of tax, interest and certain penalties the taxpayer owes
• Explain why the taxpayer owes any balance due
• Explain the specific reasons why a refund claim was denied
• Post information on IRS.gov to help taxpayers understand their IRS notice or letter
• Send a letter when the agency makes an assessment. That letter must include:
  • Information on how the taxpayer can appeal the decision
  • An explanation of the entire process from audit through collection
  • Details on how the Taxpayer Advocate Service can help
• Send an annual statement to taxpayers who enter into a payment plan, also known as an installment agreement. The statement will include how much the taxpayer:
  • Owes at the beginning of the year
  • Paid during the year
  • Still owes at the end of the year
• Make forms and publications available on IRS.gov.
• Use social media to provide helpful tax information to a wide audience of taxpayers.

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Issue Number: 2026-11

Inside This Issue

• Guidance on a new method to recover dyed fuel excise tax
• Disaster tax relief available for Southeast Georgia and Commonwealth of Northern Mariana Islands
• Apply now to join the Internal Revenue Service Advisory Council
• Apply for a Low-Income Taxpayer Clinic grant through July 6
• Other tax news

Guidance on a new method to recover dyed fuel excise tax

Businesses may file for a refund using the updated Form 8849,Claim for Refund of Excise Taxes and Schedule 5 (Form 8849), Section 4081(e) and 6435 along with the appropriate schedules. Electronic filing options have been expanded, allowing for faster submission and tracking of claims.

All claims must be submitted with complete documentation, including proof of purchase, usage records, and applicable certification statements. Only properly substantiated claims will be considered.

Businesses should review the guidance to ensure compliance with all requirements before filing. They should also consult a qualified tax professional if they have questions about how this new method may affect them.

For full details see the news release.

Disaster tax relief available for Southeast Georgia and Commonwealth of Northern Mariana Islands

Businesses and individuals in Southeast Georgia affected by wildfires and straight-line winds that began on April 18, 2026, now have until Aug. 20, 2026, to file various federal business and individual tax returns and make tax payments.

Businesses and individuals in the Commonwealth of the Northern Mariana Islands affected by Typhoon Sinlaku that began on April 11, 2026, now have until Nov. 2, 2026, to file various federal business and individual tax returns and make tax payments.

The IRS automatically identifies taxpayers located in covered disaster areas and applies filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area should call the IRS Special Services toll-free number at 866-562-5227 to request this tax relief.

The Tax relief in disaster situations page on IRS.gov has the most recent tax relief info for taxpayers affected by a disaster.

Apply now to join the Internal Revenue Service Advisory Council

Interested businesses or individuals can now apply to be a member of the Internal Revenue Service Advisory Council by submitting an IRSAC application and resume to publicliaison@irs.gov. 

Applications will be accepted through June 5, 2026.

IRSAC members offer IRS leadership recommendations on tax administration, with a focus on improving service, compliance, and communication between the IRS and the public. Qualified applicants, if selected, will serve a three-year term beginning January 2027. For full details about required skills and qualifications, see the news release.

Email questions about IRSAC or the application process to publicliaison@irs.gov publicliaison@irs.gov.

Apply for a Low-Income Taxpayer Clinic grant through July 6

The IRS is accepting applications through July 6, 2026, for Low Income Taxpayer Clinic grants to help organizations serve taxpayers in their communities.

 LITCs services include:

• Pro bono representation for resolving tax disputes
• Assistance for taxpayers whom English is a second language
• Advocacy for issues that impact low-income taxpayers

Applicants may request up to $200,000 for the 2027 grant year, subject to per-clinic funding cap set by Congress.

 Grant applications should be submitted electronically by 11:59 p.m. ET on July 6, 2026.

 For more information, see the news release.

Other tax news

The following information may be of interest to individuals and groups in or related to small businesses:

• IRS seeking applications for Tax Counseling for the Elderly and Volunteer Income Tax Assistance program grants
• IRS updates conservation easement site; settlement opportunity details forthcoming

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Issue Number: IRS Tax Tip 2026-40

Eligible taxpayers may be able to resolve tax debt through an offer in compromise

There are options available to taxpayers if they can’t pay their tax debt in full or if doing so would cause financial hardship. One of them is called an offer in compromise. Factors such as income, expenses, asset equity and ability to pay are considered when a taxpayer applies for this option.

What’s an offer in compromise
This is an agreement between a taxpayer and the IRS that settles a tax debt for less than the full amount owed.

The goal is a compromise that’s in the best interest of both the taxpayer and the IRS. The OIC application requires a fee of $205 and an initial payment. Qualifying low-income taxpayers don’t have to pay either the fee or the initial payment. Taxpayers should review the instructions for Form 656-B, Offer in Compromise, to see if they meet the qualifications to have these initial costs waived.

Who’s eligible
Taxpayers can use the Offer in Compromise Pre-Qualifier Tool to check their eligibility to file an OIC and prepare a preliminary proposal. Individual taxpayers can  make OIC payments online through their Individual Online Account. Eligible taxpayers who use Business Tax Account can now make their OIC payments through BTA. However, they can’t apply or submit an offer through BTA.  

Review the Offer in Compromise Booklet
Eligible taxpayers should download and review the latest version of the OIC Booklet to avoid processing delays. This booklet covers everything a taxpayer needs to know about submitting an OIC including:

• Eligibility
• Costs to apply
• Application process
• Forms

Beware of “OIC mills”
“OIC mills” are aggressive or misleading marketing schemes that often overpromise results and charge high fees to taxpayers who don’t qualify for an OIC. They’re also on the 2026 IRS Dirty Dozen List. Taxpayers can check OIC eligibility using free IRS tools to avoid high-pressure sales tactics. For assistance filing an OIC from a legitimate representative, taxpayers are encouraged to check for a licensed enrolled agent or a reputable accountant in their area.

More information

• Offer in Compromise FAQs
• Choosing a tax professional
• Directory of Federal Tax Return Preparers with Credentials and Select Qualifications

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