Bulletin No. 2026–19

HIGHLIGHTS

OF THIS ISSUE





Bulletin No. 2026–19

May 4, 2026

These synopses are intended only as aids to the reader in

identifying the subject matter covered. They may not be

relied upon as authoritative interpretations.

ADMINISTRATIVE

INCOME TAX

REG-113229-25, page 900.

Rev. Proc. 2026-19, page 899.

This document contains proposed amendments relating to

the dollar thresholds in regulations governing information

reporting for payments made in the course of a trade or business and the corresponding backup withholding regulations.

This document also contains proposed amendments to the

regulations governing wagering losses. The proposed regulations reflect recent changes to the statutory law. These

changes will affect persons who make payments in the

course of their trade or business and those persons claiming

a deduction for wagering losses.

Finding Lists begin on page ii.

Revenue Procedure 2026-19 provides domestic asset/liability percentages and domestic investment yields needed

by foreign life insurance companies and foreign property

and liability insurance companies to compute their minimum

effectively connected net investment income under section

842(b) of the Internal Revenue Code for taxable years beginning after December 31, 2024.

Rev. Rul. 2026-9, page 897.

Federal rates; adjusted federal rates; adjusted federal longterm rate, and the long-term tax exempt rate. For purposes

of sections 382, 1274, 1288, 7872 and other sections of

the Code, tables set forth the rates for May 2026.

The IRS Mission

Provide America’s taxpayers top-quality service by helping

them understand and meet their tax responsibilities and

enforce the law with integrity and fairness to all.

Introduction

The Internal Revenue Bulletin is the authoritative instrument

of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service

and for publishing Treasury Decisions, Executive Orders, Tax

Conventions, legislation, court decisions, and other items of

general interest. It is published weekly.

It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application

of the tax laws, including all rulings that supersede, revoke,

modify, or amend any of those previously published in the

Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management are not published; however, statements of

internal practices and procedures that affect the rights and

duties of taxpayers are published.

Revenue rulings represent the conclusions of the Service

on the application of the law to the pivotal facts stated in

the revenue ruling. In those based on positions taken in rulings to taxpayers or technical advice to Service field offices,

identifying details and information of a confidential nature are

deleted to prevent unwarranted invasions of privacy and to

comply with statutory requirements.

Rulings and procedures reported in the Bulletin do not have the

force and effect of Treasury Department Regulations, but they

may be used as precedents. Unpublished rulings will not be

relied on, used, or cited as precedents by Service personnel in

the disposition of other cases. In applying published rulings and

procedures, the effect of subsequent legislation, regulations,

court decisions, rulings, and procedures must be considered,

and Service personnel and others concerned are cautioned

against reaching the same conclusions in other cases unless

the facts and circumstances are substantially the same.

The Bulletin is divided into four parts as follows:

Part I.—1986 Code.

This part includes rulings and decisions based on provisions

of the Internal Revenue Code of 1986.

Part II.—Treaties and Tax Legislation.

This part is divided into two subparts as follows: Subpart A,

Tax Conventions and Other Related Items, and Subpart B,

Legislation and Related Committee Reports.

Part III.—Administrative, Procedural, and Miscellaneous.

To the extent practicable, pertinent cross references to these

subjects are contained in the other Parts and Subparts. Also

included in this part are Bank Secrecy Act Administrative

Rulings. Bank Secrecy Act Administrative Rulings are issued

by the Department of the Treasury’s Office of the Assistant

Secretary (Enforcement).

Part IV.—Items of General Interest.

This part includes notices of proposed rulemakings, disbarment and suspension lists, and announcements.

The last Bulletin for each month includes a cumulative index

for the matters published during the preceding months. These

monthly indexes are cumulated on a semiannual basis, and are

published in the last Bulletin of each semiannual period.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

May 4, 2026 

Bulletin No. 2026–19

Part I

Section 1274.—

Determination of Issue

Price in the Case of Certain

Debt Instruments Issued for

Property

(Also Sections 42, 280G, 382, 467, 468, 482, 483,

1288, 7520, 7702, 7872.)

Rev. Rul. 2026-9

This revenue ruling provides various prescribed rates for federal income

Annual

AFR

110% AFR

120% AFR

130% AFR

3.82%

4.20%

4.59%

4.97%

AFR

110% AFR

120% AFR

130% AFR

150% AFR

175% AFR

4.08%

4.49%

4.91%

5.32%

6.15%

7.19%

AFR

110% AFR

120% AFR

130% AFR

4.83%

5.32%

5.80%

6.30%

Short-term adjusted AFR

Mid-term adjusted AFR

Long-term adjusted AFR

Bulletin No. 2026–19

tax purposes for May 2026 (the current

month). Table 1 contains the shortterm, mid-term, and long-term applicable federal rates (AFR) for the current

month for purposes of section 1274(d)

of the Internal Revenue Code. Table 2

contains the short-term, mid-term, and

long-term adjusted applicable federal

rates (adjusted AFR) for the current

month for purposes of section 1288(b).

Table 3 sets forth the adjusted federal long-term rate and the long-term

tax-exempt rate described in section

382(f). Table 4 contains the appropri-

ate percentages for determining the

low-income housing credit described in

section 42(b)(1) for buildings placed in

service during the current month. However, under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service

after July 30, 2008, shall not be less

than 9%. Finally, Table 5 contains the

federal rate for determining the present

value of an annuity, an interest for life

or for a term of years, or a remainder or

a reversionary interest for purposes of

section 7520.

REV. RUL. 2026-9 TABLE 1

Applicable Federal Rates (AFR) for May 2026

Period for Compounding

Semiannual

Quarterly

Short-term

3.78%

3.76%

4.16%

4.14%

4.54%

4.51%

4.91%

4.88%

Mid-term

4.04%

4.02%

4.44%

4.42%

4.85%

4.82%

5.25%

5.22%

6.06%

6.01%

7.07%

7.01%

Long-term

4.77%

4.74%

5.25%

5.22%

5.72%

5.68%

6.20%

6.15%

Annual

2.89%

3.09%

3.65%

REV. RUL. 2026-9 TABLE 2

Adjusted AFR for May 2026

Period for Compounding

Semiannual

2.87%

3.07%

3.62%

897

Quarterly

2.86%

3.06%

3.60%

Monthly

3.75%

4.12%

4.50%

4.86%

4.01%

4.40%

4.80%

5.19%

5.98%

6.97%

4.72%

5.19%

5.65%

6.12%

Monthly

2.85%

3.05%

3.59%

May 4, 2026

REV. RUL. 2026-9 TABLE 3

Rates Under Section 382 for May 2026

Adjusted federal long-term rate for the current month

Long-term tax-exempt rate for ownership changes during the current month (the highest of the adjusted federal

long-term rates for the current month and the prior two months.)

3.65%

3.65%

REV. RUL. 2026-9 TABLE 4

Appropriate Percentages Under Section 42(b)(1) for May 2026

Note: Under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after

July 30, 2008, shall not be less than 9%.

Appropriate percentage for the 70% present value low-income housing credit

8.04%

Appropriate percentage for the 30% present value low-income housing credit

3.44%

REV. RUL. 2026-9 TABLE 5

Rate Under Section 7520 for May 2026

Applicable federal rate for determining the present value of an annuity, an interest for life or a term of years,

or a remainder or reversionary interest

Section 42.—Low-Income

Housing Credit

The applicable federal short-term, mid-term,

and long-term rates are set forth for the month of

May 2026. See Rev. Rul. 2026-9, page 897.

Section 280G.—Golden

Parachute Payments

The applicable federal short-term, mid-term,

and long-term rates are set forth for the month of

May 2026. See Rev. Rul. 2026-9, page 897.

Section 382.—Limitation

on Net Operating Loss

Carryforwards and

Certain Built-In Losses

Following Ownership

Change

The adjusted applicable federal long-term rate

is set forth for the month of May 2026. See Rev.

Rul. 2026-9, page 897.

Section 467.—Certain

Payments for the Use of

Property or Services

The applicable federal short-term, mid-term,

and long-term rates are set forth for the month of

May 2026. See Rev. Rul. 2026-9, page 897.

Section 468.—Special

Rules for Mining and Solid

Waste Reclamation and

Closing Costs

The applicable federal short-term rates are set

forth for the month of May 2026. See Rev. Rul.

2026-9, page 897.

Section 482.—Allocation

of Income and Deductions

Among Taxpayers

The applicable federal short-term, mid-term,

and long-term rates are set forth for the month of

May 2026. See Rev. Rul. 2026-9, page 897.

5.00%

Section 483.—Interest on

Certain Deferred Payments

The applicable federal short-term, mid-term,

and long-term rates are set forth for the month of

May 2026. See Rev. Rul. 2026-9, page 897.

Section 1288.—Treatment

of Original Issue Discount

on Tax-Exempt Obligations

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month

of May 2026. See Rev. Rul. 2026-9, page 897.

Section 7520.—Valuation

Tables

The applicable federal mid-term rates are set

forth for the month of May 2026. See Rev. Rul.

2026-9, page 897.

Section 7872.—Treatment

of Loans With BelowMarket Interest Rates

The applicable federal short-term, mid-term,

and long-term rates are set forth for the month of

May 2026. See Rev. Rul. 2026-9, page 897.

May 4, 2026

898

Bulletin No. 2026–19

Part III

26 CFR 601.105: Examination of returns and claims

for refund; credit or abatement; determination of tax

liability

(Also: 842(b))

Rev. Proc. 2026-19

SECTION 1. PURPOSE

This revenue procedure provides the

domestic asset/liability percentages and

domestic investment yields needed by

foreign life insurance companies and foreign property and liability insurance companies to compute their minimum effectively connected net investment income

under section 842(b) of the Internal Revenue Code for taxable years beginning

after December 31, 2024. Instructions are

provided for computing foreign insurance

companies’ liabilities for the estimated tax

and installment payments of estimated tax

for taxable years beginning after December 31, 2024. For more specific guidance

regarding the computation of the amount

of net investment income to be included

by a foreign insurance company on its

U.S. income tax return, see Notice 89-96,

1989-2 C.B. 417. For the domestic asset/

liability percentage and domestic investment yield, as well as instructions for

computing foreign insurance companies’

liabilities for estimated tax and installment payments of estimated tax for taxable years beginning after December 31,

2023, see Rev. Proc. 2025-20, 2025-22

I.R.B. 1448.

SECTION 2. PERCENTAGES AND

YIELDS

.01 DOMESTIC ASSET/LIABILITY

PERCENTAGES FOR 2025. The Secre-

Bulletin No. 2026–19

tary determines the domestic asset/liability percentage separately for life insurance companies and property and liability

insurance companies. For the first taxable

year beginning after December 31, 2024,

the relevant domestic asset/liability percentages are:

128.2 percent for foreign life insurance

companies, and

202.4 percent for foreign property and

liability insurance companies.

.02 DOMESTIC INVESTMENT

YIELDS FOR 2025. The Secretary is

required to prescribe separate domestic

investment yields for foreign life insurance companies and for foreign property

and liability insurance companies. For the

first taxable year beginning after December 31, 2024, the relevant domestic investment yields are:

2.1 percent for foreign life insurance

companies, and

2.2 percent for foreign property and

liability insurance companies.

.03 SOURCE OF DATA FOR 2025.

The section 842(b) percentages to be used

for the 2025 taxable year are based on tax

return data from the 2023 taxable year.

SECTION 3. ESTIMATED TAXES

To compute estimated tax and the

installment payments of estimated tax

due for taxable years beginning after

December 31, 2024, a foreign insurance

company must compute its estimated

tax payments by adding to its income

other than net investment income the

greater of (i) its net investment income

as determined under section 842(b)(5)

that is actually effectively connected

with the conduct of a trade or business

899

within the United States for the relevant period, or (ii) the minimum effectively connected net investment income

under section 842(b) that would result

from using the most recently available

domestic asset/liability percentage and

domestic investment yield. Thus, for

installment payments due after the publication of this revenue procedure, the

domestic asset/liability percentages

and the domestic investment yields

provided in this revenue procedure

must be used to compute the minimum

effectively connected net investment

income. However, if the due date of an

installment is less than 20 days after the

date this revenue procedure is published

in the Internal Revenue Bulletin, the

asset/liability percentages and domestic investment yields provided in Rev.

Proc. 2025-20 may be used to compute

the minimum effectively connected net

investment income for such installment.

For further guidance in computing estimated tax, see Notice 89-96.

SECTION 4. EFFECTIVE DATE

This revenue procedure is effective for

taxable years beginning after December

31, 2024.

SECTION 5. DRAFTING

INFORMATION

The principal author of this revenue

procedure is Sheila Ramaswamy of the

Office of Associate Chief Counsel (International). For further information regarding this revenue procedure contact Sheila

Ramaswamy at (202) 317-6938 (not a toll

free call).

May 4, 2026

Part IV

Notice of Proposed

Rulemaking

Increase in Threshold for

Requiring Information

Reporting with Respect to

Certain Payees; Extension

and Modification of

Limitation on Wagering

Losses

REG-113229-25

AGENCY: Internal Revenue Service

(IRS), Treasury.

ACTION: Notice of proposed rulemaking.

SUMMARY: This document contains

proposed amendments relating to the dollar thresholds in regulations governing

information reporting for payments made

in the course of a trade or business and

the corresponding backup withholding

regulations. This document also contains

proposed amendments to the regulations

governing wagering losses. The proposed

regulations reflect recent changes to the

statutory law. These changes will affect

persons who make payments in the course

of their trade or business and those persons claiming a deduction for wagering

losses.

DATES: Electronic or written comments

and requests for a public hearing must be

received by June 16, 2026.

ADDRESSES: Commenters are strongly

encouraged to submit public comments

electronically. Submit electronic submissions via the Federal eRulemaking Portal

at https://www.regulations.gov (indicate

IRS and REG-113229-25) by following the online instructions for submitting comments. As required by 5 U.S.C.

553(b)(4), a plain language summary of

the proposed rule is also available on the

Federal eRulemaking Portal. Requests for

a public hearing must be submitted as pre-

May 4, 2026

scribed in the “Comments and Requests

for a Public Hearing” section. Once submitted to the Federal eRulemaking Portal,

comments cannot be edited or withdrawn.

The Department of the Treasury (Treasury

Department) and the IRS will publish for

public availability any comment submitted to the IRS’s public docket. Send paper

submissions to: CC:PA:01:PR (REG113229-25), room 5503, Internal Revenue

Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044.

any alteration of law in relation to internal

revenue.”

FOR FURTHER INFORMATION

CONTACT: Concerning the proposed

regulations, William Prater at (202) 3176845 (not toll-free number); concerning

submissions of comments or requests for a

hearing, the Publications and Regulations

Section at (202) 317-6901 (not toll-free

number) or by email at publichearings@

irs.gov (preferred).

I. Section 165

SUPPLEMENTARY INFORMATION:

Authority

This document contains proposed

amendments to the Income Tax Regulations (26 CFR part 1) under sections 165,

6041, and 6041A of the Internal Revenue

Code (Code) and the Employment Taxes

and Collection of Income Tax at Source

Regulations (26 CFR part 31) under section 3406 of the Code. The proposed regulations are issued under the authority of

sections 6041(a) and 6041A(a), which

provide the Secretary of the Treasury or

the Secretary’s delegate (Secretary) with

authority to prescribe regulations to carry

out sections 6041 and 6041A. The proposed regulations are also issued under

the authority conferred by section 3406

and 3406(i), which provides the Secretary

with authority to prescribe such regulations as may be necessary or appropriate

to carry out the purposes of section 3406.

Additionally, these proposed regulations are issued pursuant to section

7805(a) of the Code, which authorizes the

Secretary to “prescribe all needful rules

and regulations for the enforcement of

[the Code], including all rules and regulations as may be necessary by reason of

900

Background

This document contains proposed

amendments to regulations impacted by

amendments to the Code made by sections

70114 and 70433 of Public Law 119-21,

139 Stat. 72 (July 4, 2025), commonly

known as the One, Big, Beautiful Bill Act

(OBBBA).

Section 165(a) provides an itemized

deduction for losses sustained during the

taxable year that are not otherwise compensated for by insurance or otherwise.

Section 165(d) limits the deduction available for losses from wagering transactions, including any deduction otherwise

allowable that is incurred in carrying on

wagering transactions.

Prior to the changes made by the

OBBBA, section 165(d) limited losses

from wagering transactions to the extent

of the gains from such transactions. Current §1.165-10 restates this limitation and

provides a rule for the treatment of wagering losses on a joint return.

OBBBA section 70114(a) amended

section 165(d) to limit this deduction to

90 percent of the amount of wagering

losses during a taxable year and only to

the extent of gains from wagering transactions during a taxable year.

II. Section 6041

Section 6041(a) requires persons

engaged in a trade or business to file

information returns reporting payments

of fixed or determinable gains, profits, and income equal to, or in excess

of, a particular dollar threshold made to

another person in the course of that trade

or business. Prior to the enactment of the

OBBBA, this dollar threshold was $600.

OBBBA section 70433(a) increased the

$600 threshold in section 6041 to a base

threshold of $2,000 for payments made

after December 31, 2025. Additionally,

OBBBA section 70433(b) added section

Bulletin No. 2026–19

6041(h), which provides that, for calendar

years after 2026, this base threshold will

be indexed to inflation. Lastly, OBBBA

section 70433(e)(1) and (2) amended section 6041 by amending the section heading from “$600 or More” to “Exceeding

Threshold” and changing the phrase “taxable year” to “calendar year.” Pursuant to

OBBBA section 70433(f), these changes

are effective for payments made after

December 31, 2025.

Several existing regulations promulgated under section 6041 reference the

prior $600 threshold amount in their text.

However, §1.6041-10, which was published in the Federal Register (TD 9807,

81 FR 96374) on December 30, 2016,

contains a $1,200 reporting threshold for

winnings from bingo and slot machine

play and a $1,500 reporting threshold for

winnings from keno.

III. Section 6041A

Section 6041A(a) requires persons

engaged in a trade or business to file

information returns reporting payments

of remuneration for services made in

the course of that trade or business that

equal or exceed a dollar threshold. Prior

to the enactment of the OBBBA, this dollar threshold was $600. OBBBA section

70433(c) amended the $600 threshold in

section 6041A(a)(2) to cross-reference

“the dollar amount in effect for such calendar year under section 6041(a).” Pursuant to OBBBA section 70433(f), this

change is effective for payments made

after December 31, 2025.

ing if the aggregate amount of payments

to a payee in the calendar year equaled or

exceeded $600.

OBBBA section 70433(d)(1) amended

the $600 threshold in section 3406(b)(6)

(A) to cross reference “the dollar amount

in effect for such calendar year under section 6041(a).” In addition, OBBBA section 70433(d)(2) amended the reference to

“$600 or More” in the heading of section

3406(b)(6) to say “Only Where in Excess

of Threshold.” These changes are effective for payments made after December

31, 2025.

Explanation of Provisions

I. Limitation on Deduction for Wagering

Losses

Following the enactment of OBBBA

section 70114(a), the first sentence of

§1.165‑10, providing that losses from

wagering transactions are limited to the

extent of gains from such transactions,

no longer accurately describes the limitations on wagering losses in section

165(d). The proposed regulations would

amend this sentence to limit the deduction

to 90 percent of the amount of wagering

losses during a taxable year and only to

the extent of gains from wagering transactions during a taxable year. The proposed

regulations would also make corresponding changes to the treatment of combined

losses of spouses from wagering transactions to reflect the changes made by the

OBBBA.

IV. Section 3406

II. Thresholds for Payments Reported

under Sections 6041 and 6041A

Section 3406(a)(1) requires backup

withholding for reportable payments

if certain conditions are met. Sections

3406(b)(1)(B), (b)(3)(A), and (b)(3)(B)

provide that payments required to be

shown on a return under sections 6041

and 6041A are reportable payments. Section 3406(b)(4) provides that, generally,

whether a payment is reportable is determined without regard to the minimum

amount that must be paid before a return

is required. However, pursuant to section

3406(b)(6)(A) payments described in sections 6041 and 6041A were only treated as

reportable payments for backup withhold-

The proposed regulations would also

update the regulations under sections

6041, 6041A, and 3406 to change the references to the pre-OBBBA $600 threshold. Consistent with the wording of the

OBBBA, these references (specifically, in

§§1.6041‑1, 1.6041-2, 1.6041-7, 1.6041A1, 31.3406(b)(3)-1, and 31.3406(g)-2)

would be replaced with a reference to an

amount equaling or exceeding the dollar

threshold in effect for the calendar year

under section 6041(a) and (h). The references in the proposed regulations have

non-substantive variations in the wording,

for readability.

Bulletin No. 2026–19

901

Proposed §1.6041-1(a)(3) would define

the dollar amount in effect for the calendar

year under section 6041(a) as $2,000 for

calendar year 2026, adjusted for inflation

in subsequent calendar years as provided

in section 6041(h). Proposed §1.6041-1(a)

(1)(iv) also contains non-substantive revisions to improve readability.

Because the dollar thresholds for

reporting winnings from bingo, keno,

and slot machine play provided in current §1.6041-10(b)(2)(i) are below the

threshold established in the OBBBA, the

proposed regulations would update those

thresholds to match the new statutory

threshold in section 6041(a) as revised

by Congress. Accordingly, the proposed

regulations would modify §1.6041-10 to

provide that the threshold for reporting

payments of winnings from bingo, keno,

and slot machine play is $2,000 for calendar year 2026, adjusted for inflation in

subsequent calendar years as provided in

section 6041(h). The existing limitations

related to the amount wagered in each of

the affected games would be maintained

under the proposed regulations.

Proposed Applicability Date

Section 1.165-10 is proposed to

apply to taxable years beginning after

December 31, 2025. Sections 1.6041-1,

1.6041-2, 1.6041-7, 1.6041-10 1.6041A1, 31.3406(b)(3)-1, and 31.3406(g)-2 are

proposed to apply to payments made on or

after January 1, 2026.

Special Analyses

I. Regulatory Planning and Review –

Economic Analysis

Executive Orders 12866 and 13563

direct agencies to assess costs and benefits of available regulatory alternatives

and, if regulation is necessary, to select

regulatory approaches that maximize net

benefits (including potential economic,

environmental, public health and safety

effects, distributive impacts, and equity).

Executive Order 13563 emphasizes the

importance of quantifying both costs

and benefits, reducing costs, harmonizing rules, and promoting flexibility. This

rule is expected to be an Executive Order

14192 deregulatory action.

May 4, 2026

These proposed regulations have been

designated by the Office of Management

and Budget’s (OMB’s) Office of Information and Regulatory Affairs (OIRA) as

subject to review under Executive Order

12866 pursuant to the Memorandum of

Agreement (MOA, July 4, 2025) between

the Treasury Department and the OMB

regarding review of tax regulations. OIRA

has determined that these proposed regulations are economically significant and

subject to review under section 3(f) of

Executive Order 12866 and section 1(c)

of the MOA. Accordingly, the proposed

regulations have been reviewed by OMB.

A. Background, Statute, and Proposed

Regulations

Under section 6041 of the Internal

Revenue Code (Code), persons engaged

in a trade or business that make certain

payments in the course of their trade or

business (payors) must file an information

return with the Internal Revenue Service

(IRS) to report such payments. The return

contains information about the payment;

the name of the payment recipient (payee);

and the address of the payee; and provides

the IRS with a third-party verification

of income that the payee may report on

their Federal income tax return. Similarly,

under section 6041A, persons engaged in

a trade or business that make payments

in the course of that trade or business as

remuneration for services must file information returns to report those payments.

Under section 3406 of the Code, when

certain conditions are met, reportable payments under sections 6041 or 6041A may

be subject to backup withholding, wherein

the payor withholds a specified percentage

of the payment and remits that amount

to the IRS. Backup withholding ensures

that Federal income tax is paid on a payment that the payee might otherwise fail

to report. In addition, when payors withhold amounts from payments subject to

backup withholding, they are required to

file an annual return to report the amounts

withheld during the year. That same return

is also used by payors to report Federal

income tax withheld from other nonpayroll payments, such as pensions, annuities,

gambling winnings, etc.

Under sections 6041 and 6041A, an

information return is required to be sub-

May 4, 2026

mitted to the IRS only when the aggregate dollar amount of payments made to

a payee over a reportable period equals

or exceeds the statutory threshold in section 6041(a). Under section 3406, backup

withholding, when certain conditions are

met, is also generally required only when

the aggregate dollar amount of payments

made to a payee over the reportable period

equals or exceeds the threshold described

in section 6041(a). These statutory dollar thresholds apply to certain payments

reported on four information returns—

Form 1099-MISC (Miscellaneous Information), Form 1099-NEC (Nonemployee

Compensation), Form W-2 (Wage and

Tax Statement), and Form W-2G (Certain Gambling Winnings)—as well as

backup withholding with respect to these

payments reported on Form 945 (Annual

Return of Withheld Federal Income Tax),

as affected by the enactment of Public

Law 119-21, 139 Stat. 72 (July 4, 2025),

commonly known as the One, Big, Beautiful Bill Act (OBBBA).

The OBBBA increased the statutory

threshold in section 6041(a) to a base

threshold of $2,000 for payments made

after December 31, 2025, and indexed

the threshold for inflation for calendar

years after 2026. Prior to the enactment

of the OBBBA, the dollar threshold for

reporting certain payments on Form 1099MISC, Form 1099-NEC, and Form W-2

was $600. This reporting level had been

in place since 1954 and had not been

indexed to inflation. Information reporting

on gambling winnings reported on Form

W-2G was governed by the same statutory

threshold, but regulations under section

6041 provided that the dollar threshold

was $1,200 for a single winning from

bingo and slot machine play and $1,500

for a single winning from keno. The statutory amendments made by the OBBBA

change the dollar thresholds for all of

these payments to be $2,000 in a calendar

year for payments made after December

31, 2025, with an adjustment for inflation

in calendar years after 2026. The proposed

regulations would conform the language

in the regulations to match the new statutory threshold, including the regulatory

thresholds for reporting winnings from

keno, bingo, and slot machine play.

The OBBBA also modified the rules

governing the itemized deduction for

902

losses from wagering transactions under

section 165(d) of the Code. Prior to the

statutory change in the OBBBA, such

deduction was limited to the extent of the

gains from wagering transactions during

a taxable year (reported as income elsewhere on the tax return). The OBBBA

amended the deduction to be 90 percent of

the amount of wagering losses, up to the

extent of gains from wagering transactions

during the taxable year. The proposed regulations would modify the existing regulations to reflect this statutory change.

B. Need for Regulation

The proposed amendments ensure that

the regulations reflect current law, thereby

preventing confusion by individuals and

entities who are impacted by the updates

to the relevant statutory provisions.

C. Economic Analysis

1. Baseline

The Treasury Department and the IRS

have assessed the benefits and costs of the

proposed regulations relative to a no-action baseline reflecting anticipated Federal income tax-related behavior in the

absence of the proposed regulations.

2. Economic Effects of the Proposed

Regulations

a. Reporting and backup withholding

threshold

The proposed amendments revise the

existing regulations to reflect the aforementioned statutory changes made by

the OBBBA. In addition to the proposed

regulations, the IRS may publish sub-regulatory and informal guidance, such as

notices, announcements, publications

on form instructions, website materials,

etc., to instruct taxpayers about how to

interpret and apply the new statutory language to their situations. Published draft

Publication 1099, General Instructions

for Certain Information Returns, for Tax

Year 2026 already contains references

to the statutory changes to the reporting

threshold made by the OBBBA. Because

the interpretation and application of the

newly enacted statutory language is likely

Bulletin No. 2026–19

to have no ambiguity, the sub-regulatory

and informal guidance will likely provide

sufficient guidance for taxpayers, and

the benefits of the proposed regulations

beyond such guidance may be limited.

Failure to update now-outdated regulations after law changes could create

confusion and uncertainty for taxpayers

impacted by the statutory changes. Taxpayers and practitioners who normally rely

on the existing regulations must turn to

other sources to learn about how to apply

the statutory changes to their situations or

else use their own interpretations. In cases

of interpretive uncertainty, taxpayers and

practitioners would incur additional compliance costs as they try to understand

how to apply accurately the new statutory

requirements. Some taxpayers and practitioners may apply the lower, outdated

thresholds in the regulations despite the

new, higher thresholds in the statutes. This

is especially true for payors of winnings

from keno, bingo, and slot machine play,

which have historically followed a regulatory exception to the statutory threshold.

For payors, the enacted higher dollar

threshold eliminates the reporting and

backup withholding requirements on

affected payments between the old and

new thresholds. This change will reduce

the compliance costs incurred by these

payors to report payments and withhold taxes. Because this is a change in

the statute, these dollar thresholds apply

regardless of these proposed regulations.

However, because payors may follow the

existing regulations, failing to update the

regulations to reflect the changes in the

statute increases the likelihood that payors

will not take full advantage of the burden

reductions associated with the lessened

reporting and withholding requirements.

The dollar thresholds specified in the

existing regulations for reporting winnings from keno, bingo, and slot machine

play are above the pre-OBBBA statutory

level of $600 and below the $2,000 level

in current law. Because the new statutory

level exceeds the pre-OBBBA regulatory

reporting thresholds for these games, the

proposed regulations amend these thresholds to match the new statutory level of

$2,000. In the absence of the proposed

regulations, the new dollar threshold of

$2,000 would still apply for reporting winnings from keno, bingo, and slot machine

Bulletin No. 2026–19

play. Updating the regulations would

provide clear and consistent guidance to

taxpayers with respect to the increased

reporting threshold.

Because the proposed regulations only

modify the existing regulations to comport with the new statutory thresholds, the

discretionary effects of the proposed regulations hinge on the extent to which they

eliminate interpretive ambiguity and informational inconsistency and, as a result,

facilitate application of the new statutory

law by affected taxpayers and entities.

Persons engaged in a trade or business

are no longer required to report to the IRS

certain payments below $2,000, effective

for payments made in calendar year 2026.

The Treasury Department and IRS estimate that, for tax year 2024, more than

328,000 payors filed 7.9 million Forms

1099-MISC reporting affected payments

of at least $600 and less than $2,000, and

approximately 3.3 million payors filed

18.8 million Forms 1099-NEC reporting

payments of non-employee compensation

of at least $600 and less than $2,000. For

the same tax year, more than 4,000 payors

filed 17.3 million Forms W-2G reporting

gambling winnings in the range between

the old and new reporting thresholds,

almost 80 percent of which were for winnings from slot machine play. These payors also filed Forms 945 to report Federal

income tax they withheld on the reportable payments, when certain conditions

are met. In addition, for tax year 2024

approximately 32,000 employers filed 0.9

million W-2s with paid wages of at least

$600 and less than $2,000 that were not

subject to withholding for social security,

Medicare, or federal income taxes. This

situation applies in a narrow set of circumstances where withholding for social security and Medicare taxes is not required,

such as for cases of foreign agricultural

workers, election workers, and certain

members of the clergy.

In total, 3.5 million payors filed information returns for tax year 2024 that were

between the old and new filing thresholds.

This estimate counts a payor only once

if they are in the affected range for more

than one type of return. After adjusting for

an expected growth rate to tax year 2026,

the Treasury Department and the IRS estimate that 3.6 million payors are potentially affected by the statutory change and

903

the clarity provided by these proposed

regulations. The Treasury Department

and IRS expect that most of these affected

payors will only file information returns

that are above the new threshold provided

by OBBBA, without needing clarification

from the proposed regulations. However,

the proposed regulations will provide

clarity and save some affected payors time

and resources to identify the appropriate

filing threshold.

For the projected reductions in compliance burdens associated with filing these

returns as a result of the higher reporting

thresholds established in the OBBBA,

please refer to the Paperwork Reduction

Act section of this document found in Part

II of this Special Analyses.

b. Treatment of wagering losses

The statutory change in the percentage

of wagering losses that may be deducted

from 100 percent to 90 percent reduces

the expected after-tax return to wagering

transactions for taxpayers who claim an

itemized deduction for wagering losses.

For taxpayers who do not itemize deductions no deduction may be claimed for

wagering losses. Most taxpayers that

report gains from wagering transactions

do not itemize deductions and would be

unaffected by the statutory change. For

tax year 2022, the Treasury Department

and IRS estimate that about 2.3 million

taxpayers reported gains from wagering

transactions on individual tax returns,

but less than a third of these taxpayers,

approximately 670,000, also claim an

itemized deduction for wagering losses.

The Treasury Department and the IRS

project a total of 673,000 taxpayers will

take an itemized deduction for wagering

losses for tax year 2026. The relatively

small share of taxpayers that report an

itemized deduction for wagering losses is

consistent with the small share of taxpayers overall that itemize deductions. The

Treasury Department and the IRS estimate

that 15 percent or fewer taxpayers itemize

under current law.

The proposed regulations provide

clarity regarding how to report wagering losses on a tax return and certainty

to affected taxpayers about the expected

after-tax return on wagering transactions.

However, it is expected that tax soft-

May 4, 2026

ware companies and tax professionals

will update their products and services to

reflect the law change even in the absence

of updated regulations. The Treasury

Department estimates that, of the more

than 161 million individual income tax

returns filed for tax year 2022, nearly 98

percent used assistance from a preparer

or tax software while less than 3 percent

were self-prepared paper returns filed by

taxpayers without software assistance,

likely following IRS instructions on tax

forms. For these reasons, although updating the existing regulations helps reduce

interpretive ambiguity and informational

inconsistency, the economic impacts of

any discretionary aspects of the proposed

regulations relating to the deduction of

wagering losses are likely minimal.

3. Summary

Based on the available models and

data, the Treasury Department and the

IRS estimate that the economic costs and

benefits of the proposed regulations would

be small. The Treasury Department and

the IRS invite public comments and additional data on the economic effects that

would result from these proposed regulations.

II. Paperwork Reduction Act

The Paperwork Reduction Act of 1995,

44 U.S.C. 3501-3520 (PRA), generally

requires that a Federal agency obtain the

approval of the OMB before collecting

information from the public, whether that

collection of information is mandatory,

voluntary, or required to obtain or retain

a benefit. An agency may not conduct or

sponsor, and a person is not required to

respond to, a collection of information

unless it displays a valid control number

assigned by the OMB.

The collections of information in

the proposed regulations with respect

to sections 6041 and 6041A are in proposed §§1.6041-1 and 1.6041A-1. The

likely respondents are persons who make

payments in the course of their trade

or business. For purposes of the PRA,

the reporting burden associated with

the collection of information in proposed §§1.6041-1 and 1.6041A-1 will

May 4, 2026

be reflected in the Paperwork Reduction

Act Submissions associated with Forms

1099-MISC, 1099-NEC, W-2, and W-2G

(OMB control numbers 1545-0115,

1545-0116, 1545-0029, and 1545-0238,

respectively). The collection of information in the proposed regulations with

respect to section 3406 is in proposed

§§31.3406(b)(3)-1 and 31.3406(g)-2.

The collected information would be used

by the payor to determine whether payments to the payee exceed a threshold

that would require backup withholding

and the issuance of an information return.

The burden for these requirements is

included with the Form and Instructions

for Form 945, Annual Return of Withheld

Federal Income Tax. The Form 945 and

Instructions for Form 945 are approved

under OMB control number 1545-0029.

The higher reporting threshold set by

OBBBA leads to a significant reduction

in the expected number of Forms 1099MISC, 1099-NEC, W-2G, and to a lesser

extent, Forms W-2 and 945, that will

need to be filed. For calendar year 2027,

reflecting tax year 2026 returns, the Treasury Department and the IRS estimate that

the higher reporting threshold will result

in an overall reduction in filing burden of

$982 million in 2024 dollars as described

below and summarized in the accompanying table.

Prior to the passage of the OBBBA,

the IRS projected that 42.60 million Form

1099-MISCs would be filed in calendar year 2027 (see IRS Publication 6961

(Rev. 9-2025)). The Treasury Department

and the IRS estimate that 9.32 million of

these forms would have payments in the

range affected by the change in the filing

threshold and would no longer need to be

filed. Multiplying the reduction in 9.32

million forms filed by the 0.41 hours per

form time burden yields a decrease of 3.82

million burden hours and then multiplying

by the $58.40 per hour monetization rate

(in 2024 dollars) provides an expected

reduction in filing burden of $223 million.

Similarly, prior to the passage of the

OBBBA, the IRS projected that 62.72 million Form 1099-NECs would be filed in

calendar year 2027. The Treasury Department and the IRS estimate that 19.54

million of these forms would have payments affected by the change in the filing

904

threshold and would no longer need to be

filed. Multiplying the reduction in 19.54

million forms filed by the 0.25 hours per

form time burden yields a decrease of 4.89

million burden hours and then multiplying

by the $58.40 per hour monetization rate

provides an expected reduction in filing

burden of $285 million.

In addition, prior to the passage of the

OBBBA, the IRS projected that 267.82

million Form W-2s would be filed in calendar year 2027. The Treasury Department and the IRS estimate that 0.94 million of these forms would have payments

affected by the change in the filing threshold and would no longer need to be filed.

Multiplying the reduction in 0.94 million

forms filed by the 0.51 hours per form

time burden yields a decrease of 0.48 million burden hours and then multiplying

by the $58.40 per hour monetization rate

provides an expected reduction in filing

burden of $28 million.

Also, prior to the passage of the

OBBBA, the IRS projected that 34.06

million Form W-2Gs would be filed in

calendar year 2027. The Treasury Department and the IRS estimate that 19.06 million of these forms would have payments

affected by the change in the filing threshold and would no longer need to be filed.

Multiplying the reduction in 19.06 million

forms filed by the 0.4 hours per form time

burden yields a decrease of 7.62 million

burden hours and then multiplying by the

$58.40 per hour monetization rate provides an expected reduction in filing burden of $445 million.

Finally, prior to the passage of the

OBBBA, the IRS projected that 47.8 thousand Form 945s would be filed in calendar

year 2027. The Treasury Department and

the IRS estimate that 600 of these forms

would have payments affected by the

change in the filing threshold and would

no longer need to be filed. Multiplying

the reduction in 600 forms filed by the

8.18 hours per form time burden yields a

decrease of 5 thousand burden hours and

then multiplying by the $58.40 per hour

monetization rate provides an expected

reduction in filing burden of $292 thousand.

The Treasury Department and the IRS

request comments on all aspects of these

estimates.

Bulletin No. 2026–19

Table 1. Estimate of the Reduction in Filing Burden from Increased Reporting Threshold, Calendar Year 2027

Estimated Reduction in

Forms Filed Due to Increase

Burden Hours

Total Reduction in

Total Reduction in

Form

in Reporting Threshold

Per Form

Burden Hours

Monetized Hours

1099-MISC

9,320,000

0.41

3,821,200

$223,146,000

1099-NEC

19,540,000

0.25

4,885,000

$285,284,000

W-2

944,000

0.51

481,000

$28,090,000

W-2G

19,060,000

0.40

7,624,000

$445,242,000

945

600

8.18

5,000

$292,000

Total

48,864,600

N/A

16,816,000

$982,054,000

Books or records relating to a collection of information must be retained as

long as their contents may become material in the administration of any Internal

Revenue law. Tax returns and tax return

information are confidential, unless section 6103 authorizes disclosure.

Notwithstanding this certification, the

Treasury Department and the IRS welcome comments on the impact of these

proposed regulations on small entities.

III. Regulatory Flexibility Act

Pursuant to section 7805(f) of the

Code, these proposed regulations will be

submitted to the Chief Counsel for the

Office of Advocacy of the Small Business

Administration for comment on its impact

on small business.

In accordance with the Regulatory

Flexibility Act (5 U.S.C. chapter 6)

(RFA), it is hereby certified that these

proposed regulations will not have a significant economic impact on a substantial

number of small entities. Although the

proposed regulations may affect a substantial number of small entities, the economic impact of the proposed regulations

is not likely to be significant. The Treasury Department and the IRS estimate

that approximately 3.6 million taxpayers are affected by the proposed regulations, of which approximately 98 percent

are considered small entities with gross

receipts under $40 million. The economic

impact of these proposed regulations

is not likely to be significant, however,

because they do not impose any new

requirements on small entities but rather

increase the threshold at which they are

required to issue information returns,

thus reducing the amount of information

returns entities must issue. For example,

small entities with less than $40 million

in gross receipts will on average need to

issue 10 fewer information returns under

the increased threshold. The benefits

from the higher filing threshold and the

increased certainty from the proposed

regulations will be less than one percent

of gross revenues for these small entities.

Bulletin No. 2026–19

IV. Submission to Small Business

Administration

V. Unfunded Mandates Reform Act

Section 202 of the Unfunded Mandates

Reform Act of 1995 (UMRA) requires

that agencies assess anticipated costs and

benefits and take certain other actions

before issuing a final rule that includes

any Federal mandate that may result in

expenditures in any one year by a State,

local, or Tribal government, in the aggregate, or by the private sector, of $100 million in 1995 dollars, updated annually for

inflation. This rule does not include any

Federal mandate that may result in expenditures by State, local, or Tribal governments, or by the private sector in excess of

that threshold.

VI. Executive Order 13132: Federalism

Executive Order 13132 (Federalism)

prohibits an agency from publishing any

rule that has federalism implications if

the rule either imposes substantial, direct

compliance costs on State and local governments, and is not required by statute,

or preempts State law, unless the agency

905

meets the consultation and funding

requirements of section 6 of the Executive order. These proposed regulations do

not have federalism implications and do

not impose substantial direct compliance

costs on State and local governments or

preempt State law within the meaning of

the Executive order.

Comments and Requests for a Public

Hearing

Before these proposed regulations are

adopted as final regulations, consideration

will be given to any comments that are

timely submitted to the Treasury Department and the IRS as prescribed in this

preamble under the ADDRESSES heading. The Treasury Department and the

IRS request comments on all aspects of

the proposed regulations. Any electronic

and paper comments submitted will be

available at https://www.regulations.gov

or upon request. Once submitted to the

Federal eRulemaking Portal, comments

cannot be edited or withdrawn.

A public hearing will be scheduled if

requested in writing by any person that

timely submits electronic or written comments. If a public hearing is scheduled,

notice of the date, time, and place for the

public hearing will be published in the

Federal Register.

Drafting Information

The principal author of these proposed

regulations is the Office of the Associate

Chief Counsel (Procedure and Administration). However, other personnel from

the Treasury Department and the IRS participated in their development.

May 4, 2026

List of Subjects

26 CFR Part 1

Income taxes, Reporting and recordkeeping requirements.

26 CFR Part 31

Employment taxes, Income taxes,

Penalties, Pensions, Railroad retirement,

Reporting and recordkeeping requirements, Social security, Unemployment

compensation.

Proposed Amendments to the

Regulations

Accordingly, the Treasury Department

and IRS propose to amend 26 CFR parts 1

and 31 as follows:

PART 1—INCOME TAXES

Paragraph 1. The authority citation

for part 1 continues to read in part as follows:

Authority: 26 U.S.C. 7805 * * *

*****

Par. 2. Section 1.165-10 is revised to

read as follows:

§1.165-10 Wagering losses.

(a) In general. For purposes of losses

from wagering transactions, a deduction is

allowed under section 165(d) of the Internal

Revenue Code for 90 percent of the amount

of such losses during the taxable year, but

only to the extent of the gains from wagering transactions during that year.

(b) Joint returns. In the case of spouses

making a joint return, 90 percent of the

combined losses of the spouses from

wagering transactions during the taxable

year are allowed as a deduction under section 165(d) only to the extent of the combined gains of the spouses from wagering

transactions during that year.

(c) Applicability date. This section

applies to taxable years beginning after

December 31, 2025.

Par. 3. Section 1.6041-1 is amended

by:

1. Revising the section heading, paragraphs (a)(1)(i)(A) and (B), and paragraph

(a)(1)(iii).

May 4, 2026

2. In paragraph (a)(1)(v), designating

Example 1 and 2 as paragraphs (a)(1)(v)

(A) and (B).

3. Revising the first sentence of newly

designated paragraph (a)(1)(v)(A).

4. Revising newly designated paragraph (a)(1)(v)(B).

5. Adding paragraph (a)(3).

6. Revising paragraph (j).

The revisions and addition read as follows:

§1.6041-1 Return of information as to

payments exceeding threshold.

(a) * * *

(1) * * *

(i) * * *

(A) Salaries, wages, commissions,

fees, and other forms of compensation for

services rendered that equal or exceed the

dollar threshold in effect for the calendar

year under section 6041(a) and (h).

(B) Interest (including original issue

discount), rents, royalties, annuities, pensions, and other gains, profits, and income

that equal or exceed the dollar threshold in

effect for the calendar year under section

6041(a) and (h).

*****

(iii) Information returns required

under section 6045(f) on or after January

1, 2007. For payments made on or after

January 1, 2007, to which section 6045(f)

(relating to payments to attorneys) applies,

the following rules apply. Notwithstanding the provisions of paragraph (a)(1)(ii)

of this section, payments to an attorney

that are described in paragraph (a)(1)(i)

of this section but which otherwise would

be reportable under section 6045(f) are

reported under section 6041 and this section and not section 6045(f) of the Code.

This exception applies only if the payments are reportable with respect to the

same payee under both sections 6041 and

6045(f). Thus, a person who, in the course

of a trade or business, pays taxable damages in an amount that equals or exceeds

the dollar threshold in effect for the calendar year under section 6041(a) and (h)

to a claimant by paying that amount to

the claimant’s attorney is required to file

an information return under section 6041

with respect to the claimant, as well as

another information return under section

6045(f) with respect to the claimant’s

906

attorney. For provisions relating to information reporting for payments to attorneys, see §1.6045–5.

*****

(v) * * *

(A) * * * In 2026, Restaurant owner

A, in the course of business, pays $2,500

of fixed or determinable income to B, a

repairman, by credit card. * * *

(B) Example 2. In 2026, Restaurant

owner A, in the course of business, pays

$2,500 of fixed or determinable income

to B, a repairman, through a third party

payment network. B is one of a substantial

number of persons who have established

accounts with Y, a third party settlement

organization that provides standards and

mechanisms for settling the transactions

and guarantees payments to those persons

for goods or services purchased through

the network. Y is responsible for making

the payment to B. Under paragraph (a)

(1)(iv) of this section, A, as payor, is not

required to file an information return under

section 6041 with respect to the transaction

because the transaction is a third party network transaction that is subject to reporting

under section 6050W. Solely for purposes

of determining whether A is required to

report under section 6041, the de minimis

threshold for third party network transactions in §1.6050W–1(c)(4) is disregarded.

*****

(3) Dollar threshold in effect for the

calendar year. For payments made before

January 1, 2026, the dollar threshold in

effect for the calendar year under section

6041(a) is $600. For payments made after

December 31, 2025, and before January

1, 2027, the dollar threshold in effect for

the calendar year under section 6041(a) is

$2,000. For payments made after December 31, 2026, the dollar threshold in

effect for the calendar year under section

6041(a) is $2,000 plus the inflation adjustment provided in section 6041(h).

*****

(j) Applicability date. This section

applies to payments made on or after January 1, 2026.

Par. 4. Section 1.6041-2 is amended

by:

1. Adding a heading to paragraph (a).

2. Revising the third and fourth sentences of paragraph (a)(1).

3. Revising paragraphs (b)(1)(ii) and

(d).

Bulletin No. 2026–19

The addition and revisions read as follows:

§1.6041-2 Return of information as to

payments to employees.

(a) Reporting payments to employees--(1) * * * All other payments of

compensation, including the cash value

of payments made in any medium other

than cash, to an employee by the employee’s employer in the course of the trade

or business of the employer must also be

reported on Form W–2 if the total of such

payments and the amount of the employee’s wages (as defined in section 3401), if

any, required to be reported on Form W–2

equals or exceeds the dollar threshold in

effect for the calendar year under section

6041(a) and (h). For example, in 2026,

when the threshold in effect under section

6041(a) is $2,000, if a payment of $2,500

is made to an employee and $1,500 thereof

represents wages subject to withholding

under section 3402 and the remaining

$1,000 represents compensation not subject to withholding, such wages and compensation must both be reported on Form

W–2. * * *

*****

(b) * * *

(1) * * *

(ii) Described in section 72(m)(3)(B),

shall be reported on Forms 1096 and 1099

to the extent such amounts are includible

in the gross income of such beneficiary if

the amounts so includible equal or exceed

the dollar threshold in effect for the calendar year under section 6041(a) and (h).

In addition, every trust described in section 501(c)(17) which makes one or more

payments (including separation and sick

and accident benefits) in an amount that

equals or exceeds the dollar threshold in

effect for the calendar year under section

6041(a) and (h) to an individual must file

an annual information return on Form

1096, accompanied by a statement on

Form 1099, for each such individual. Payments made by an employer or a person

other than the trustee of the trust should

not be considered in determining whether

the amount paid by the trustee equals or

exceeds the dollar threshold in effect for

the calendar year under section 6041(a)

and (h).

*****

Bulletin No. 2026–19

(d) Applicability date. This section

applies to returns filed with respect to payments made on or after January 1, 2026.

Par. 5. Section 1.6041-7 is amended

by revising paragraph (b)(1) to read as

follows:

§1.6041-7 Magnetic media

requirement.

*****

(b) * * *

(1) For calendar years beginning on or

after January 1, 1971, a health care carrier, or an agent thereof, making payment

of fees or other compensation to providers of medical and health care services,

may make a separate return on magnetic

media for each separate department

within a specific line of such carrier’s

business, so long as all of such returns

taken together contain all of the information required by section 6041 with

respect to each provider of medical and

health care services to whom such health

care carrier makes payments that equal or

exceed the dollar threshold in effect for

the calendar year under section 6041(a)

and (h).

*****

Par. 6. Section 1.6041-10 is amended

by:

1. Revising paragraph (b)(1)(i).

2. Revising the introductory text of

paragraph (g)(5).

3. In paragraph (g)(5), designating

Examples 1 through 6 as paragraphs (g)

(5)(i) through (vi).

4. Revising newly designated paragraphs (g)(5)(i) and (ii).

5. In newly designated paragraph (g)

(5)(iv), removing the language “example

3” and adding, in its place, the language

“in paragraph (g)(5)(iii) of this section

(Example 3)”.

6. Revising newly designated paragraph (g)(5)(v).

7. Revising paragraph (i).

The revisions read as follows:

§1.6041-10 Return of information as

to payments of winnings from bingo,

keno, and slot machine play.

*****

(b) * * *

(1) * * *

907

(i) For purposes of this section, the

term reportable gambling winnings is

defined as follows:

(A) For bingo, the term reportable

gambling winnings means winnings

that equal or exceed the dollar threshold in effect for the calendar year under

section 6041(a) and (h) from one bingo

game, without reduction for the amount

wagered. All winnings received from all

wagers made during one bingo game are

combined (for example, all winnings from

all cards played during one bingo game

are combined).

(B) For keno, the term reportable gambling winnings means winnings that equal

or exceed the dollar threshold in effect for

the calendar year under section 6041(a)

and (h) from one keno game reduced by

the amount wagered on the same keno

game. All winnings received from all

wagers made during one keno game are

combined (for example, all winnings from

all “ways” on a multi-way keno ticket are

combined).

(C) For slot machine play, the term

reportable gambling winnings means

winnings that equal or exceed the dollar

threshold in effect for the calendar year

under section 6041(a) and (h) from one

slot machine play, without reduction for

the amount wagered.

*****

(g) * * *

(5) Examples. The following examples

illustrate the provisions of this section.

For each example, assume that for purposes of the aggregate reporting method

in this paragraph (g), casino R’s “information reporting period” for all calendar

years is a gaming day that begins at 3 a.m.

and ends at 2:59 a.m. the following day

(except for January 1 and December 31),

that (ignoring the inflation adjustment in

6041(h) for simplicity of illustration) the

dollar threshold in effect for each calendar year under section 6041(a) is $2,000,

and that individuals C, D, and E are U.S.

persons.

(i) Example 1. On Day 1, between 7 a.m. and 4

p.m., C places five wagers at casino R on five different slot machines. The first two wagers result in no

win. The third wager results in a $2,000 win. The

fourth wager results in a $2,500 win. The fifth wager

results in an $800 win:

(A) Under paragraph (b)(1)(i)(C) of this section,

there are reportable gambling winnings from the slot

machine play of $4,500 ($2,000 + $2,500). The $800

win is not a reportable gambling winning from slot

May 4, 2026

machine play because it does not equal or exceed the

dollar threshold.

(B) Because all the amounts were won on the

same type of game (even though each of the winnings occurred on different machines) during the

same information reporting period, R is permitted

to use the aggregate reporting method under this

paragraph (g). If R decides not to use the aggregate

reporting method, a separate Form W–2G would

have to be filed and furnished for the payment of

reportable gambling winnings of $2,000 and for the

payment of reportable gambling winnings of $2,500.

However, if R decides to use the aggregate reporting

method, R may report total reportable gambling winnings from slot machine play of $4,500 ($2,000 +

$2,500) on one Form W–2G.

(ii) Example 2. Assume the same facts as in

paragraph (g)(5)(i) of this section (Example 1),

except that in addition to the winnings described

in paragraph (g)(5)(i) of this section (Example 1),

at 5 a.m. on Day 2, C wins $3,250 from one slot

machine play at casino R. Even though C played

the same type of game (slot machine play) on Day

1 and Day 2, under paragraph (b)(2) of this section,

the win at 5 a.m. on Day 2 is a win during a separate

information reporting period. Under paragraph (g)

(2)(i) of this section, the $3,250 of reportable gambling winnings on Day 2 cannot be aggregated with

the reportable gambling winnings of $4,500 from

Day 1 on a single Form W–2G. Accordingly, if R

uses the aggregate reporting method, R must file

two Forms W–2G with respect to C’s reportable

gambling winnings on Day 1 and Day 2. R must

report $4,500 of reportable gambling winnings

from slot machine play paid to C on Day 1 on the

first Form W–2G, and $3,250 of reportable gambling winnings from slot machine play paid to C on

Day 2 on the second Form W–2G.

*****

(v) Example 5. At 2 p.m. on Day 1, D won

$2,000 (after reducing the amount of the win by

the amount wagered) playing one keno game at

casino R. D provides R with his driver’s license.

The driver’s license has D’s photograph on it, as

well as D’s name and address. The driver’s license

does not include D’s social security number. D cannot remember his social security number and has

no other identification at the time with his social

security number on it. D does not provide R with

his social security number before R pays the winnings to D. Because D cannot remember his social

security number, D cannot complete and sign a

Form W–9. R deducts and withholds under the

backup withholding provisions of section 3406(a)

and pays the remainder to D. D returns to casino R

and at 6 p.m. on Day 1 wins $2,500 (after reducing the amount of the win by the amount wagered)

in one keno game. D provides R with his driver’s

license as well as D’s social security card. R generally uses the aggregate reporting method and,

in all cases where it is used, R complies with the

requirements of this paragraph (g). At 8 p.m. and

10 p.m. on Day 1, D wins an additional $2,800 and

$2,700 (after reducing the amount of the win by

the amount wagered), respectively, from two different keno games. For each of these two wins,

an employee of R obtains the information from D

required by this paragraph (g). Under paragraph

May 4, 2026

(b)(1)(i)(B) of this section, each of D’s wins from

the four games of keno on Day 1 ($2,000, $2,500,

$2,800, and $2,700) are reportable gambling winnings. Because D’s first win on Day 1 was at 2 p.m.

and D’s last win on Day 1 was at 10 p.m., all of

D’s reportable gambling winnings from keno are

won during the same information reporting period.

Because R satisfies the requirements of paragraph

(g)(2)(i) of this section, R may use the aggregate

reporting method to report D’s reportable gambling

winnings from keno. However, pursuant to paragraph (g)(4)(iii) of this section, the $2,000 payment

made to D at 2 p.m. cannot be reported under the

aggregate reporting method because that payment

was subject to backup withholding. Accordingly, if

R uses the aggregate reporting method under this

paragraph (g), R will have to file two Forms W–2G

with respect to D’s reportable gambling winnings

from keno on Day 1. On the first Form W–2G, R

will report $2,000 of reportable gambling winnings and of the amount of backup withholding

with respect to the 2 p.m. win from keno, and, on

the second Form W–2G, R will report $8,000 of

reportable gambling winnings from keno (representing the three payments of $2,500, $2,800, and

$2,700 that D won between 6 p.m. and 10 p.m. on

Day 1).

*****

(i) Applicability date. This section

applies to payments of reportable gambling winnings from bingo, keno, or slot

machine play made on or after January 1,

2026.

*****

Par. 7. Section 1.6041A-1 is amended

by revising paragraphs (d)(4)(ii) and (iii)

to read as follows:

§1.6041A-1 Returns regarding

payments of remuneration for services

and certain direct sales.

*****

(d) * * *

(4) * * *

(ii) Examples. The provisions of this

paragraph (d)(4) are illustrated by the following examples:

(A) Example 1. In 2026, service recipient A, in

the course of its business, pays by credit card remuneration of $2,500 to service provider B for services

performed by B. B is one of a network of unrelated

persons that has agreed to accept A’s credit card as

payment under an agreement that provides standards and mechanisms for settling the transactions

between a merchant acquiring bank and the persons

who accept the cards. Merchant acquiring bank Y

is responsible for making the payment to B. Under

paragraph (d)(4)(i) of this section, A is not required

to file an information return under section 6041A(a)

with respect to the transaction because Y, as the payment settlement entity for the payment card transaction, is required to file an information return under

section 6050W.

908

(B) Example 2. In 2026, service recipient A, in

the course of business, pays through a third party

payment network $2,500 to B, a repairman, through

a third party payment network. B is one of a substantial number of persons who have established

accounts with Y, a third party settlement organization

that provides standards and mechanisms for settling

the transactions and guarantees payments to those

persons for goods or services purchased through the

network. Y is responsible for making the payment to

B. Under paragraph (d)(4)(i) of this section, A is not

required to file an information return under section

6041A(a) with respect to the transaction because the

transaction is a third party network transaction that

is subject to reporting under section 6050W. Solely

for purposes of determining whether the transaction

is subject to reporting under section 6041A, the de

minimis threshold for third party network transactions in §1.6050W-1(c)(4) is disregarded.

(iii) Applicability date. This section

applies to payments made by payment

card or through a third party payment network on or after January 1, 2026.

*****

PART 31—EMPLOYMENT TAXES

AND COLLECTION OF INCOME

TAX AT SOURCE

Par. 8. The authority citation for part

31 continues to read in part as follows:

Authority: 26 U.S.C. 7805.

*****

Par. 9. Section 31.3406-0 is amended

by revising the entry for §31.3406(b)(3)1(b)(3) to read as follows:

§31.3406-0 Outline of the backup

withholding regulations.

*****

§31.3406(b)(3)-1 Reportable payments

of rents, commissions, nonemployee

compensation, etc.

*****

(b) * * *

(3) Payments exceeding threshold.

*****

Par. 10. Section 31.3406(b)(3)-1 is

amended by:

1. Revising the second sentence of

paragraph (a).

2. Revising the heading of paragraph

(b)(3) and revising paragraph (b)(3)(i).

3. Revising paragraph (b)(3)(ii)(A).

4. Revising the heading and the first

sentence of paragraph (b)(3)(ii)(B).

The revisions read as follows:

Bulletin No. 2026–19

§31.3406(b)(3)-1 Reportable payments

of rents, commissions, nonemployee

compensation, etc.

(a) * * * See paragraph (b) of this section for an exception concerning payments

aggregating less than the dollar threshold

in effect for the calendar year under section 6041(a) and (h). * * *

(b) * * *

(3) Payments exceeding threshold—(i)

In general. A payment is a reportable payment under paragraph (a) of this section

only if the aggregate amount of the current

payment and all previous payments to the

payee during the calendar year equals or

exceeds the dollar threshold in effect for the

calendar year under section 6041(a) and (h).

The amount subject to withholding is the

entire amount of the payment that causes

the total amount paid to the payee to equal

or exceed the dollar threshold in effect for

the calendar year under section 6041(a) and

(h), plus the amount of any subsequent payments made to the payee during that calendar year. This paragraph (b)(3)(i) does not

apply to gambling winnings (as provided in

§31.3406(g)–2(d)(1)).

Bulletin No. 2026–19

(ii) * * *

(A) The aggregation rule. The aggregation rule of paragraph (b)(3)(i) of this

section does not apply if the payor was

required to make an information return

under section 6041 or 6041A(a) for the

preceding calendar year with respect to

payments to the payee, or the payor was

required to withhold under section 3406

during the preceding calendar year with

respect to payments to the payee that were

reportable under section 6041 or 6041A(a).

(B) Determination of whether payments exceed the dollar threshold. In

determining whether payments to a payee

equal or exceed the dollar threshold in

effect for the calendar year under section

6041(a) and (h) for purposes of withholding under section 3406, the payor must

aggregate only payments of the same kind

made to the same payee. * * *

*****

Par. 11. Section 31.3406(g)-2 is

amended by:

1. Revising the second sentence of

paragraph (d)(2).

2. Revising paragraph (h).

The revisions read as follows:

909

§31.3406(g)-2 Exception for reportable

payment for which withholding is

otherwise required.

*****

(d) * * *

(2) * * * A gambling winning (other

than a winning from bingo, keno, or slot

machines) is a reportable gambling winning only if the amount paid with respect

to the wager equals or exceeds the dollar amount in effect for the calendar year

under section 6041(a) and (h) and if the

proceeds are at least 300 times as large as

the amount wagered. * * *

*****

(h) Applicability date. This section

applies to payments of reportable gambling winnings paid with respect to a winning event that occurs on or after January

1, 2026.

Frank J. Bisignano,

Chief Executive Officer.

(Filed by the Office of the Federal Register April 16,

2026, 8:45 a.m., and published in the issue of the

Federal Register for April 17, 2026, 91 FR 20599)

May 4, 2026

Definition of Terms

Revenue rulings and revenue procedures

(hereinafter referred to as “rulings”) that

have an effect on previous rulings use the

following defined terms to describe the

­effect:

Amplified describes a situation where

no change is being made in a prior published position, but the prior position is

being extended to apply to a variation of

the fact situation set forth therein. Thus,

if an earlier ruling held that a principle

applied to A, and the new ruling holds that

the same principle also applies to B, the

earlier ruling is amplified. (Compare with

modified, below).

Clarified is used in those instances

where the language in a prior ruling is

being made clear because the language

has caused, or may cause, some confusion. It is not used where a position in a

prior ruling is being changed.

Distinguished describes a situation

where a ruling mentions a previously published ruling and points out an essential

difference between them.

Modified is used where the substance

of a previously published position is being

changed. Thus, if a prior ruling held that a

principle applied to A but not to B, and the

new ruling holds that it applies to both A

and B, the prior ruling is modified because

it corrects a published position. (Compare

with amplified and clarified, above).

Obsoleted describes a previously published ruling that is not considered determinative with respect to future transactions.

This term is most commonly used in a ruling

that lists previously published rulings that

are obsoleted because of changes in laws or

regulations. A ruling may also be obsoleted

because the substance has been included in

regulations subsequently adopted.

Revoked describes situations where the

position in the previously published ruling

is not correct and the correct position is

being stated in a new ruling.

Superseded describes a situation where

the new ruling does nothing more than

restate the substance and situation of a

previously published ruling (or rulings).

Thus, the term is used to republish under

the 1986 Code and regulations the same

position published under the 1939 Code

and regulations. The term is also used

when it is desired to republish in a single

ruling a series of situations, names, etc.,

that were previously published over a

period of time in separate rulings. If the

new ruling does more than restate the substance of a prior ruling, a combination of

terms is used. For example, modified and

superseded describes a situation where the

substance of a previously published ruling

is being changed in part and is continued

without change in part and it is desired to

restate the valid portion of the previously

published ruling in a new ruling that is

self contained. In this case, the previously

published ruling is first modified and then,

as modified, is superseded.

Supplemented is used in situations in

which a list, such as a list of the names of

countries, is published in a ruling and that

list is expanded by adding further names

in subsequent rulings. After the original

ruling has been supplemented several

times, a new ruling may be published that

includes the list in the original ruling and

the additions, and supersedes all prior rulings in the series.

Suspended is used in rare situations

to show that the previous published rulings will not be applied pending some

future action such as the issuance of new

or amended regulations, the outcome of

cases in litigation, or the outcome of a

Service study.

Abbreviations

The following abbreviations in current

use and formerly used will appear in

material published in the Bulletin.

A—Individual.

Acq.—Acquiescence.

B—Individual.

BE—Beneficiary.

BK—Bank.

B.T.A.—Board of Tax Appeals.

C—Individual.

C.B.—Cumulative Bulletin.

CFR—Code of Federal Regulations.

CI—City.

COOP—Cooperative.

Ct.D.—Court Decision.

CY—County.

D—Decedent.

DC—Dummy Corporation.

DE—Donee.

Del. Order—Delegation Order.

DISC—Domestic International Sales Corporation.

DR—Donor.

E—Estate.

EE—Employee.

E.O.—Executive Order.

ER—Employer.

Bulletin No. 2026–19

ERISA—Employee Retirement Income Security Act.

EX—Executor.

F—Fiduciary.

FC—Foreign Country.

FICA—Federal Insurance Contributions Act.

FISC—Foreign International Sales Company.

FPH—Foreign Personal Holding Company.

F.R.—Federal Register.

FUTA—Federal Unemployment Tax Act.

FX—Foreign corporation.

G.C.M.—Chief Counsel’s Memorandum.

GE—Grantee.

GP—General Partner.

GR—Grantor.

IC—Insurance Company.

I.R.B.—Internal Revenue Bulletin.

LE—Lessee.

LP—Limited Partner.

LR—Lessor.

M—Minor.

Nonacq.—Nonacquiescence.

O—Organization.

P—Parent Corporation.

PHC—Personal Holding Company.

PO—Possession of the U.S.

PR—Partner.

PRS—Partnership.

i

PTE—Prohibited Transaction Exemption.

Pub. L.—Public Law.

REIT—Real Estate Investment Trust.

Rev. Proc.—Revenue Procedure.

Rev. Rul.—Revenue Ruling.

S—Subsidiary.

S.P.R.—Statement of Procedural Rules.

Stat.—Statutes at Large.

T—Target Corporation.

T.C.—Tax Court.

T.D.—Treasury Decision.

TFE—Transferee.

TFR—Transferor.

T.I.R.—Technical Information Release.

TP—Taxpayer.

TR—Trust.

TT—Trustee.

U.S.C.—United States Code.

X—Corporation.

Y—Corporation.

Z—Corporation.

May 4, 2026

Numerical Finding List1

Bulletin 2026–19

Announcements:

2026-1, 2026-04 I.R.B. 402

2026-2, 2026-05 I.R.B. 447

2026-3, 2026-06 I.R.B. 518

2026-4, 2026-06 I.R.B. 533

2026-5, 2026-07 I.R.B. 540

2026-6, 2026-10 I.R.B. 634

2026-7, 2026-11 I.R.B. 697

2026-8, 2026-16 I.R.B. 813

2026-9, 2026-18 I.R.B. 881

Notices:

2026-2, 2026-02 I.R.B. 304

2026-3, 2026-02 I.R.B. 307

2026-5, 2026-02 I.R.B. 309

2026-6, 2026-02 I.R.B. 313

2026-1, 2026-04 I.R.B. 365

2026-8, 2026-04 I.R.B. 368

2026-10, 2026-04 I.R.B. 378

2026-11, 2026-06 I.R.B. 491

2026-12, 2026-06 I.R.B. 496

2026-13, 2026-06 I.R.B. 499

2026-9, 2026-07 I.R.B. 534

2026-7, 2026-11 I.R.B. 637

2026-14, 2026-11 I.R.B. 654

2026-15, 2026-11 I.R.B. 658

2026-16, 2026-11 I.R.B. 685

2026-17, 2026-12 I.R.B. 698

2026-4, 2026-13 I.R.B. 726

2026-19, 2026-15 I.R.B. 797

2026-20, 2026-15 I.R.B. 800

2026-22, 2026-15 I.R.B. 802

2026-23, 2026-15 I.R.B. 804

2026-24, 2026-17 I.R.B. 835

2026-25, 2026-17 I.R.B. 836

2026-26, 2026-18 I.R.B. 878

Revenue Procedures:

2026-1, 2026-01 I.R.B. 1

2026-2, 2026-01 I.R.B. 119

2026-3, 2026-01 I.R.B. 143

2026-4, 2026-01 I.R.B. 160

2026-5, 2026-01 I.R.B. 258

2026-6, 2026-02 I.R.B. 314

2026-7, 2026-02 I.R.B. 316

2026-8, 2026-04 I.R.B. 380

2026-9, 2026-04 I.R.B. 393

2026-10, 2026-04 I.R.B. 394

2026-12, 2026-07 I.R.B. 535

2026-13, 2026-09 I.R.B. 563

2026-11, 2026-12 I.R.B. 707

2026-15, 2026-13 I.R.B. 729

2026-16, 2026-13 I.R.B. 733

2026-17, 2026-15 I.R.B. 805

2026-19, 2026-19 I.R.B. 899

Revenue Rulings:

2026-1, 2026-02 I.R.B. 299

2026-2, 2026-03 I.R.B. 342

2026-3, 2026-06 I.R.B. 485

2026-4, 2026-06 I.R.B. 487

2026-5, 2026-08 I.R.B. 542

2026-6, 2026-11 I.R.B. 635

2026-7, 2026-15 I.R.B. 791

2026-8, 2026-16 I.R.B. 812

2026-9, 2026-19 I.R.B. 897

Treasury Decisions:

10042, 2026-03 I.R.B. 320

10041, 2026-04 I.R.B. 360

10039, 2026-05 I.R.B. 403

10040, 2026-05 I.R.B. 416

10043, 2026-15 I.R.B. 793

10044, 2026-18 I.R.B. 840

Proposed Regulations:

REG-101952-24, 2026-03 I.R.B. 345

REG-110519-25, 2026-03 I.R.B. 353

REG-132251-11; REG-134219-08,

2026-03 I.R.B. 358

REG-103430-24, 2026-05 I.R.B. 447

REG-112829-25, 2026-05 I.R.B. 452

REG-113515-25, 2026-05 I.R.B. 455

REG-121244-23, 2026-09 I.R.B. 579

REG-105064-25, 2026-13 I.R.B. 735

REG-108921-25, 2026-13 I.R.B. 756

REG-117002-25, 2026-13 I.R.B. 761

REG-117270-25, 2026-13 I.R.B. 772

REG-117298-21, 2026-14 I.R.B. 784

REG-114499-25, 2026-18 I.R.B. 883

REG-113229-25, 2026-19 I.R.B. 900

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2025–27 through 2025–52 is in Internal Revenue Bulletin

2024–52, dated December 22, 2024.

1

May 4, 2026

ii

Bulletin No. 2026–19

Finding List of Current Actions on

Previously Published Items1

Bulletin 2026–19

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2025–27 through 2025–52 is in Internal Revenue Bulletin

2024–52, dated December 22, 2024.

1

Bulletin No. 2026–19

iii

May 4, 2026

Internal Revenue Service

Washington, DC 20224

Official Business

Penalty for Private Use, $300

INTERNAL REVENUE BULLETIN

The Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue

Bulletins are available at www.irs.gov/irb/.

We Welcome Comments About the Internal Revenue Bulletin

If you have comments concerning the format or production of the Internal Revenue Bulletin or suggestions for improving it,

we would be pleased to hear from you. You can email us your suggestions or comments through the IRS Internet Home Page

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