These synopses are intended only as aids to the reader in

HIGHLIGHTS

OF THIS ISSUE





Bulletin No. 2026–7

February 9, 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

230, including the restrictions on incompetence or disreputable conduct.

Announcement 2026-7, page 540.

Rev. Proc. 2026-12, page 535.

The Office of Professional Responsibility (OPR) announces

recent disciplinary sanctions imposed on attorneys, certified public accountants, enrolled agents, enrolled actuaries, enrolled retirement plan agents, and appraisers. The

OPR also announces when certain unenrolled, unlicensed

tax return preparers (individuals who are not enrolled to

practice before the Internal Revenue Service (IRS)) and are

not licensed as attorneys or certified public accountants)

have been disciplined. Licensed or enrolled practitioners

are subject to the regulations governing practice before the

IRS, which are set out in Title 31, Code of Federal Regulations (C.F.R.), Subtitle A, Part 10, and which are released

as Treasury Department Circular No. 230. The regulations

prescribe the duties and restrictions relating to such practice and prescribe the disciplinary sanctions for violating

the regulations. Unenrolled/unlicensed return preparers

who choose to participate in the IRS’s voluntary Annual Filing Season Program (AFSP) are subject to the guidance in

Revenue Procedure 2014-42, which governs a preparer’s

eligibility to represent taxpayers before the IRS in examinations of tax returns the preparer both prepared for the taxpayer and signed as the preparer. Additionally, unenrolled/

unlicensed return preparers who participate in the AFSP

agree to be subject to the duties and restrictions in Circular

Finding Lists begin on page ii.

This revenue procedure specifies when information shown on

a return in accordance with the applicable forms and instructions will be an adequate disclosure for purposes of reducing

an understatement of income tax under section 6662(d) and

for purposes of avoiding the section 6694(a) preparer penalty. This revenue procedure updates Rev. Proc. 2024-44,

2024-52 I.R.B. 1438, and applies to any income tax return

filed on 2025 tax forms for a taxable year beginning in 2025,

and to any income tax return filed in 2026 on 2025 tax forms

for short taxable years beginning in 2026.

EMPLOYEE PLANS

Notice 2026-9, page 534.

This notice provides guidance relating to amendments under

section 501 of the SECURE 2.0 Act of 2022 for individual

retirement arrangements and annuities (IRAs) under section

408(a), (b), or (h), an employer’s SEP arrangement under

section 408(k), and an employer’s SIMPLE IRA plan under

section 408(p). This notice provides that the Treasury Department and the IRS have extended the deadline to make certain

amendments for IRAs, SEP arrangements, and SIMPLE IRA

plans to December 31, 2027.

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.

February 9, 2026 

Bulletin No. 2026–7

Part III

Extension of SECURE 2.0

Act Amendment Deadline

for IRAs

Notice 2026-9

I. PURPOSE

This notice provides guidance relating

to amendments under section 501 of Division T of the Consolidated Appropriations

Act, 2023, Pub. L. 117-328, 136 Stat. 4459

(2022), known as the SECURE 2.0 Act of

2022 (SECURE 2.0 Act) for an individual retirement arrangement (IRA) under

section 408(a), (b), or (h) of the Internal

Revenue Code (the Code),1 an employer’s

SEP arrangement under section 408(k),

and an employer’s SIMPLE IRA plan

under section 408(p). This notice provides that the Department of the Treasury

(Treasury Department) and the Internal

Revenue Service (IRS) have extended the

deadline to make certain amendments for

IRAs, SEP arrangements, and SIMPLE

IRA plans to December 31, 2027.

II. GENERAL OVERVIEW

Section 501 of the SECURE 2.0 Act

provides, in relevant part, that a retirement

plan or annuity contract will be treated as

being operated in accordance with the

terms of the plan during a specified period

by reason of a plan amendment made

pursuant to any amendment made by the

SECURE 2.0 Act or pursuant to any regulation issued by the Secretary of the Treasury under the SECURE 2.0 Act, provided

that:

(1) the amendment is adopted no later

than the last day of the first plan year

beginning on or after January 1, 2025, or

such later date as the Secretary may prescribe (the section 501 date);

(2) the amendment applies retroactively to the effective date of the

SECURE 2.0 Act provision or the regulations thereunder (or, in the case of an

amendment not required by a provision

of the SECURE 2.0 Act or the regulations

thereunder, the effective date specified by

the plan); and

(3) the plan or contract is operated as

if the amendment were in effect during

the period beginning on the effective date

of the SECURE 2.0 Act provision or the

regulations thereunder (or, in the case of

an amendment not required by a provision

of the SECURE 2.0 Act or the regulations

thereunder, the effective date specified by

the plan or contract) and ending on the

section 501 date or, if earlier, the date the

amendment is adopted.

Section 501(c) of the SECURE 2.0 Act

modifies section 601(b)(1) of the Setting

Every Community Up for Retirement

Enhancement Act of 2019 (SECURE

Act),2 sections 2202(c)(2)(A) and 2203(c)

(2)(B)(i) of the Coronavirus Aid, Relief,

and Economic Security Act (CARES

Act),3 and section 302(d)(2)(A) of Title III

of the Taxpayer Certainty and Disaster Tax

Relief Act of 2020 (Relief Act)4 to extend

plan amendment deadlines with respect to

these sections to coordinate with the plan

amendment deadlines under section 501

of the SECURE 2.0 Act, as applicable.

Notice 2024-2, 2024-2 IRB 316, Q&A

J-1, provides, in relevant part, the deadlines by which a retirement plan must be

amended to reflect the provisions of the

SECURE Act, section 2202 or 2203 of the

CARES Act, section 302 of the Relief Act,

and the SECURE 2.0 Act (the Acts) and

the regulations thereunder. Notice 20242, Q&A J-1, in relevant part, extended

the deadline to amend the trust governing

an IRA that is an individual retirement

account under Code section 408(a) or the

contract issued by an insurance company

with respect to an IRA that is an individual

retirement annuity under section 408(b) to

December 31, 2026, or such later date as

the Secretary prescribes in guidance.

In comments that have been submitted

to the Treasury Department and the IRS,

stakeholders stated that IRA custodians

and providers require additional time,

in the absence of model language from

the Treasury Department and the IRS,

to amend IRAs, SEP arrangements, and

SIMPLE IRA plans for compliance with

the Acts.

III. DISCUSSION

Because the Treasury Department and

the IRS are still developing model language that may be used by IRA trustees,

custodians, and issuers to amend an IRA

for compliance with the Acts, the deadline

to amend for the applicable provisions of

the Acts or any regulations thereunder is

extended to December 31, 2027, or such

later date as the Secretary prescribes in

guidance for the following documents: (1)

the written governing instrument for an

IRA that is an individual retirement account

under section 408(a) or (h) of the Code,

(2) the contract issued by an insurance

company with respect to an IRA that is an

individual retirement annuity under section

408(b), (3) an employer’s SEP arrangement

under section 408(k), or (4) an employer’s

SIMPLE IRA plan under section 408(p).

IV. DRAFTING INFORMATION

The principal author of this notice is

the Office of Associate Chief Counsel

(Employee Benefits, Exempt Organizations, and Employment Taxes). For further information regarding this notice,

please contact (202) 317-4148 (not a tollfree number).

For purposes of this notice, the term “IRA” includes both an individual retirement account described in section 408(a) or (h) and an individual retirement annuity described in section 408(b).

Division O of the Further Consolidated Appropriations Act, 2020, Pub. L. 116-94, 133 Stat. 2534 (2019).

3

Pub. L. 116-136, 134 Stat. 281 (2020).

4

Division EE of the Consolidated Appropriations Act, 2021, Pub. L. 116-260, 134 Stat. 1182 (2020)

1

2

February 9, 2026

534

Bulletin No. 2026–7

26 CFR 601.105: Examination of returns and claims

for refund, credit or abatement; determination of

correct tax liability.

(Also: Part 1, §§ 6662, 6694, 1.6662-4, 1.6694-2)

Rev. Proc. 2026-12

SECTION 1. PURPOSE

This revenue procedure updates Rev.

Proc. 2024-44, 2024-52 I.R.B. 1438, and

identifies circumstances under which the

disclosure on a taxpayer’s income tax

return with respect to an item or position

is adequate for the purpose of reducing the

understatement of income tax under section 6662(d) of the Internal Revenue Code

(relating to the substantial understatement

aspect of the accuracy-related penalty), and

for the purpose of avoiding the tax return

preparer penalty under section 6694(a)

(relating to understatements due to unreasonable positions) with respect to income

tax returns. This revenue procedure does

not apply with respect to any other penalty provisions (including but not limited

to the disregard provisions of the section

6662(b)(1) accuracy-related penalty, the

section 6662(i) increased accuracy-related

penalty in the case of nondisclosed noneconomic substance transactions, and the

section 6662(b)(7) and (j) increased accuracy-related penalty in the case of undisclosed foreign financial asset understatements). If this revenue procedure does not

include an item or position, disclosure is

adequate with respect to that item or position only if made on a properly completed

Form 8275 or 8275-R, as appropriate,

attached to the return for the year or to a

qualified amended return. See Treas. Reg.

§ 1.6664-2(c) for information about qualified amended returns.

This revenue procedure applies to any

income tax return filed on 2025 tax forms

for a taxable year beginning in 2025, and

to any income tax return filed in 2026 on

2025 tax forms for short taxable years

beginning in 2026.

SECTION 2. CHANGES FROM REV.

PROC. 2024-44

Changes have been made in order to

update the taxable years to which this revenue procedure applies. In addition, minor

Bulletin No. 2026–7

changes have been made to incorporate

section 6662(m), as added to the Internal

Revenue Code by section 70512 of Public

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

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

a special rule for determining whether a

substantial understatement of income tax

exists due to disallowance of applicable

energy credits. No additional substantive

changes have been made.

SECTION 3. BACKGROUND

.01 If section 6662 applies to any portion of an underpayment of tax required to

be shown on a return, an amount generally

equal to 20 percent of the portion of the

underpayment is added to the tax. Under

section 6662(b)(2), the penalty applies to

the portion of any underpayment of tax

that is attributable to a substantial understatement of income tax. The penalty rate

increases to 40 percent in the case of gross

valuation misstatements under section

6662(h), nondisclosed noneconomic substance transactions under section 6662(i),

or undisclosed foreign financial asset

understatements under section 6662(j).

.02 Generally, there is a substantial understatement of income tax if the

amount of the understatement exceeds

the greater of (i) 10 percent of the amount

of tax required to be shown on the return

for the taxable year or (ii) $5,000. Section

6662(d)(1). Section 6662(d)(1)(C) provides a special rule for taxpayers claiming

a section 199A deduction. In the case of

any taxpayer who claims any deduction

allowed under section 199A for the taxable year, there is a substantial understatement of income tax if the amount of the

understatement exceeds the greater of (i)

5 percent of the amount of tax required

to be shown on the return for the taxable

year or (ii) $5,000. Section 6662(d)(1)(B)

provides a special rule for corporations.

A corporation (other than an S corporation or a personal holding company) has

a substantial understatement of income

tax if the amount of the understatement

exceeds the lesser of (i) 10 percent of the

tax required to be shown on the return for

a taxable year (or, if greater, $10,000) or

(ii) $10,000,000. For taxable years beginning after July 4, 2025, section 6662(m)

provides a special rule for a substantial

535

understatement of income tax due to a disallowance of applicable energy credits, as

defined in section 6662(m)(2). In the case

of a taxpayer for which there is such a disallowance of an applicable energy credit,

a substantial understatement of income

tax for the taxable year is determined (i)

by substituting “1 percent” for “10 percent” in sections 6662(d)(1)(A) and (B),

and (ii) without regard to section 6662(d)

(1)(C). Generally, an understatement is

the excess of the amount of tax required to

be shown on the return for the taxable year

over the amount of the tax that is shown

on the return reduced by any rebate, where

the excess is determined without regard

to items to which the reportable transaction understatement penalty under section

6662A applies. Section 6662(d)(2)(A).

For purposes of determining whether an

understatement is substantial, the understatement determined under the general

rule is increased by the aggregate amount

of any reportable transaction understatements relating to the return. Section

6662A(e)(1)(A).

.03 In the case of an item not attributable to a tax shelter, if the taxpayer has a

reasonable basis for the tax treatment of

the item, the amount of the understatement is reduced by the portion of the

understatement attributable to the item

with respect to which the relevant facts

affecting the item’s tax treatment are

adequately disclosed in the return or in a

statement attached to the return. Section

6662(d)(2)(B)(ii).

.04 Section 6694(a) imposes a penalty

on a tax return preparer who prepares

a return or claim for refund reflecting

an understatement of liability due to an

“unreasonable position” if the tax return

preparer knew (or reasonably should have

known) of the position. A position (other

than a position with respect to a tax shelter

or a reportable transaction to which section 6662A applies) is generally treated

as unreasonable unless (i) there is or was

substantial authority for the position, or

(ii) the position was properly disclosed

in accordance with section 6662(d)(2)(B)

(ii)(I) and had a reasonable basis. If the

position is with respect to a tax shelter

(as defined in section 6662(d)(2)(C)(ii))

or a reportable transaction to which section 6662A applies, the position is treated

as unreasonable unless it is reasonable

February 9, 2026

to believe that the position would more

likely than not be sustained on the merits.

See Notice 2009-5, 2009-3 I.R.B. 309, for

interim penalty compliance rules for tax

shelter transactions.

.05 In general, this revenue procedure provides guidance for determining

when disclosure by return is adequate

for purposes of section 6662(d)(2)(B)(ii)

and section 6694(a)(2)(B). For purposes

of this revenue procedure, the taxpayer

must furnish all required information in

accordance with the applicable forms

and instructions, and the money amounts

entered on these forms must be verifiable.

.06 This revenue procedure may apply

to a return for a fiscal tax year that begins

in 2025 and ends in 2026. This revenue

procedure may also apply to a short year

return for a period beginning in 2026 if

the return is to be filed before the 2026

forms are available. (Note that individuals are generally not put in this position.)

The most frequent situation in which a

short year arises is when filing a decedent’s final return for a fractional part of a

year. In that situation, the 2026 form will

be available because the final return is

due the fifteenth day of the fourth month

following the close of the 12-month

period that began with the first day of

such fractional part of the year (meaning the due date is not accelerated). See

Treas. Reg. § 1.6072-1(b). In the case of

fiscal year and short year returns, the taxpayer must take into account any tax law

changes that are effective for tax years

beginning after December 31, 2025, even

though these changes are not reflected on

the form or instructions.

.07 This document does not take into

account the effect of tax law changes effective for tax years beginning after December 31, 2025. If a line referenced in this

revenue procedure is affected by such a

change and requires additional reporting,

a taxpayer may have to file Form 8275,

Disclosure Statement, or Form 8275-R,

Regulation Disclosure Statement, until the

Service prescribes criteria for complying

with the requirement.

.08 A complete and accurate disclosure

of a tax position on the appropriate year’s

Schedule UTP, Uncertain Tax Position

Statement, will be treated as if the corporation filed a Form 8275 or Form 8275-R

regarding the tax position. The filing of

February 9, 2026

a Form 8275 or Form 8275-R, however,

will not be treated as if the corporation

filed a Schedule UTP.

SECTION 4. PROCEDURE

.01 General

(1) Additional disclosure of facts relevant to, or positions taken with respect

to, issues involving any of the items set

forth below is unnecessary for purposes

of reducing any understatement of income

tax under section 6662(d) (except as otherwise provided in section 4.02(3) concerning Schedules M-1 and M-3), provided that the forms and attachments are

completed in a clear manner and in accordance with their instructions.

(2) The money amounts entered on the

forms must be verifiable, and the information on the return must be disclosed in the

manner described below. For purposes of

this revenue procedure, a number is verifiable if, on audit, the taxpayer can prove

the origin of the amount (even if that

number is not ultimately accepted by the

Service) and the taxpayer can show good

faith in entering that number on the applicable form.

(3) The disclosure of an amount as

provided in section 4.02 below is not

adequate when the understatement arises

from a transaction between parties who

are related within the meaning of section

267(b). If an entry may present a legal

issue or controversy because of a related-party transaction, then that transaction

and the relationship must be disclosed on

a Form 8275 or Form 8275-R.

(4) When the amount of an item is

shown on a line that does not have a preprinted description identifying that item

(such as on an unnamed line under an

“Other Expense” category), the taxpayer

must clearly identify the item by including

the description on that line. For example,

to disclose a bad debt for a sole proprietorship, the words “bad debt” must be written

or typed on the line of Schedule C (Form

1040 or 1040-SR) that shows the amount

of the bad debt. Also, for Schedule M-3

(Form 1120), Part II, line 25, Other income

(loss) items with differences, or Part III,

line 38, Other expense/deduction items

with differences, the entry must provide

descriptive language; for example, “Cost

of non-compete agreement deductible not

536

capitalizable,” and the description must be

provided on an attachment. Similarly, for

other forms, if space limitations on a form

do not allow for an adequate description,

the description must be continued on an

attachment.

(5) Although a taxpayer may literally

meet the disclosure requirements of this

revenue procedure, the disclosure will

have no effect for purposes of the section

6662 accuracy-related penalty if the item

or position on the return (1) does not have

a reasonable basis as defined in Treas.

Reg. § 1.6662-3(b)(3); (2) is attributable

to a tax shelter item as defined in section

6662(d)(2)(C)(ii); or (3) is not properly

substantiated or the taxpayer failed to

keep adequate books and records with

respect to the item or position.

(6) Disclosure also will have no effect

for purposes of the section 6694(a) penalty as applicable to tax return preparers if

the position is with respect to a tax shelter

(as defined in section 6662(d)(2)(C)(ii)) or

a reportable transaction to which section

6662A applies.

.02 Items

(1) Form 1040, Schedule A, Itemized

Deductions:

(a) Medical and Dental Expenses:

Complete lines 1 through 4, supplying all

required information.

(b) Taxes: Complete lines 5 through 7,

supplying all required information. Line 6

must list each type of tax and the amount

paid.

(c) Interest Expenses: Complete lines 8

through 10, supplying all required information. This section 4.02(1)(c) does not

apply to (i) amounts disallowed under section 163(d) unless Form 4952, Investment

Interest Expense Deduction, is completed,

or (ii) amounts disallowed under section

265.

(d) Charitable Contributions: Complete

lines 11 through 14, supplying all required

information and attaching all related forms

required pursuant to statute or regulation.

(e) Casualty and Theft Losses: Complete Form 4684, Casualties and Thefts,

and attach to the return. Each item or article for which a casualty or theft loss is

claimed must be listed on Form 4684.

(2) Certain Trade or Business Expenses

(including, for purposes of this section,

the following six expenses as they relate

to the rental of property):

Bulletin No. 2026–7

(a) Casualty and Theft Losses: The

procedure outlined in section 4.02(1)(e)

must be followed.

(b) Legal Expenses: The amount

claimed must be stated. This section does

not apply, however, to amounts properly

characterized as capital expenditures, personal expenses, or non-deductible lobbying or political expenditures, including

amounts that are required to be (or that

are) amortized over a period of years.

(c) Specific Bad Debt Charge-off: The

amount written off must be stated.

(d) Officers’ Compensation: Complete

Form 1125-E, Compensation of Officers,

when its instructions require completion.

You must express the “percent of time

devoted to business” as a numerical percentage, rather than as a non-numerical

description such as “part” or “as needed.”

This section does not apply to “excess

parachute payments,” as defined in section 280G. This section does not apply

to the extent that remuneration paid or

incurred exceeds an applicable employee-remuneration deduction limitation

under section 162(m).

(e) Repair Expenses: The amount

claimed must be stated. This section does

not apply, however, to any amount prop-

erly characterized as capital expenditures

or personal expenses.

(f) Taxes (other than foreign taxes):

The amount claimed must be stated.

(3) Differences in book and income tax

reporting:

For Schedule M-1 and all Schedules

M-3, including those listed in (a)-(f)

below, the information provided must

reasonably apprise the Service of the

potential controversy concerning the tax

treatment of the item. If the information

provided does not so apprise the Service, a

Form 8275 or Form 8275-R must be used

to adequately disclose the item (see Part II

of the instructions for those forms).

Note: An item reported on a line with

a pre-printed description, shown on

an attached schedule or “itemized”

on Schedule M-1, may represent the

aggregate amount of several transactions producing that item (i.e.,

a group of similar items, such as

amounts paid or incurred for supplies

by a taxpayer engaged in business).

In some instances, a potentially controversial item may involve a portion

of the aggregate amount disclosed on

the schedule. The Service will not be

reasonably apprised of a potential controversy by the aggregate amount disclosed. In these instances, the taxpayer

must use Form 8275 or Form 8275-R

regarding that portion of the item.

Combining unlike items, whether on

Schedule M-1 or Schedule M-3 (or on an

attachment when directed by the instructions), will not constitute an adequate disclosure.

Additionally, taxpayers that file the

Schedule M-3 (Form 1120), Net Income

(Loss) Reconciliation for Corporations

With Total Assets of $10 Million or More,

may be required to complete Schedule B

(Form 1120), Additional Information for

Schedule M-3 Filers. For further information, see Who Must File in the General

Instructions for Schedule B (Form 1120).

Taxpayers that file the Schedule M-3

(Form 1065), Net Income (Loss) Reconciliation for Certain Partnerships, may be

required to complete Schedule C (Form

1065), Additional Information for Schedule M-3 Filers. For further information,

see Who Must File in the General Instructions for Schedule C (Form 1065). When

required, these schedules are necessary to

constitute adequate disclosure:

(a) Form 1065. Schedule M-3 (Form 1065), Net Income (Loss) Reconciliation for Certain Partnerships:

Part II (reconciliation of income (loss) items)

Part III (reconciliation of expense/deduction

items)

Column (a), Income (Loss) per Income Statement;

Column (b), Temporary Difference;

Column (c), Permanent Difference; and

Column (d), Income (Loss) per Tax Return

Column (a), Expense per Income Statement;

Column (b), Temporary Difference;

Column (c), Permanent Difference; and

Column (d), Deduction per Tax Return

(b) Form 1120. (i) Schedule M-1, Reconciliation of Income (Loss) per Books With Income per Return.

(ii) Schedule M-3 (Form 1120), Net Income (Loss) Reconciliation for Corporations With Total Assets of $10 Million or More:

Part II (reconciliation of income (loss) items)

Part III (reconciliation of expense/deduction

items)

Bulletin No. 2026–7

Column (a), Income (Loss) per Income Statement;

Column (b), Temporary Difference;

Column (c), Permanent Difference; and

Column (d), Income (Loss) per Tax Return

Column (a), Expense per Income Statement;

Column (b), Temporary Difference;

Column (c), Permanent Difference; and

Column (d), Deduction per Tax Return

537

February 9, 2026

(c) Form 1120-L. Schedule M-3 (Form 1120-L), Net Income (Loss) Reconciliation for U.S. Life Insurance Companies With Total

Assets of $10 Million or More:

Part II (reconciliation of income (loss) items)

Part III (reconciliation of expense/deduction

items)

Column (a), Income (Loss) per Income Statement;

Column (b), Temporary Difference;

Column (c), Permanent Difference; and

Column (d), Income (Loss) per Tax Return

Column (a), Expense per Income Statement;

Column (b), Temporary Difference;

Column (c), Permanent Difference; and

Column (d), Deduction per Tax Return

(d) Form 1120-PC. Schedule M-3 (Form 1120-PC), Net Income (Loss) Reconciliation for U.S. Property and Casualty Insurance

Companies With Total Assets of $10 Million or More:

Part II (reconciliation of income (loss) items)

Part III (reconciliation of expense/deduction

items)

Column (a), Income (Loss) per Income Statement;

Column (b), Temporary Difference;

Column (c), Permanent Difference; and

Column (d), Income (Loss) per Tax Return

Column (a), Expense per Income Statement;

Column (b), Temporary Difference;

Column (c), Permanent Difference; and

Column (d), Deduction per Tax Return

(e) Form 1120-S. Schedule M-3 (Form 1120-S), Net Income (Loss) Reconciliation for S Corporations With Total Assets of $10

Million or More:

Part II (reconciliation of income (loss) items)

Part III (reconciliation of expense/deduction

items)

Column (a), Income (Loss) per Income Statement;

Column (b), Temporary Difference;

Column (c), Permanent Difference; and

Column (d), Income (Loss) per Tax Return

Column (a), Expense per Income Statement;

Column (b), Temporary Difference;

Column (c), Permanent Difference; and

Column (d), Deduction per Tax Return

(f) Form 1120-F. Schedule M-3 (Form 1120-F), Net Income (Loss) Reconciliation for Foreign Corporations With Reportable

Assets of $10 Million or More:

Part II (reconciliation of income (loss) items)

Part III (reconciliation of expense/deduction

items)

(4) Foreign Tax Items:

(a) International Boycott Transactions:

Transactions disclosed on Form 5713,

International Boycott Report; Schedule

A, International Boycott Factor (Section 999(c)(1)); Schedule B, Specifically

Attributable Taxes and Income (Section

999(c)(2)); and Schedule C, Tax Effect

February 9, 2026

Column (b), Temporary Differences;

Column (c), Permanent Differences; and

Column (d), Other Permanent Differences for Allocations to Non-ECI and ECI

Column (b), Temporary Differences;

Column (c), Permanent Differences; and

Column (d), Other Permanent Differences for Allocations to Non-ECI and ECI

of the International Boycott Provisions,

must be completed when required by their

instructions.

(b) Treaty-Based Return Position:

Transactions and amounts under section 6114 or section 7701(b) as disclosed

on Form 8833, Treaty-Based Return

Position Disclosure Under Section 6114

538

or 7701(b), must be completed when

required by its instructions.

(5) Other:

(a) Moving Expenses: Complete Form

3903, Moving Expenses, and attach to the

return.

(b) Employee Business Expenses:

Complete Form 2106, Employee Business

Bulletin No. 2026–7

Expenses (for use only by Armed Forces

reservists, qualified performing artists,

fee-basis state or local government officials, and employees with impairment-related work expenses), and attach to the

return. This section does not apply to club

dues or to travel expenses for any non-employee accompanying the taxpayer on the

trip.

(c) Fuels Credit: Complete Form 4136,

Credit for Federal Tax Paid on Fuels, and

attach to the return.

Bulletin No. 2026–7

(d) Investment Credit: Complete Form

3468, Investment Credit, and attach to the

return.

SECTION 5. EFFECTIVE DATE

This revenue procedure applies to any

income tax return filed on a 2025 tax form

for a taxable year beginning in 2025 and

to any income tax return filed on a 2025

tax form in 2026 for a short taxable year

beginning in 2026.

539

SECTION 6. DRAFTING

INFORMATION

The principal author of this revenue

procedure is the Office of Associate Chief

Counsel (Procedure and Administration).

For further information regarding this revenue procedure contact the office at (202)

317-3400 (not a toll free number).

February 9, 2026

Part IV

Announcement of

Disciplinary Sanctions from

the Office of Professional

Responsibility

Announcement 2026-5

The Office of Professional Responsibility (OPR) announces recent disciplinary

sanctions imposed on attorneys, certified public accountants, enrolled agents,

enrolled actuaries, enrolled retirement

plan agents, and appraisers. The OPR also

announces when certain unenrolled, unlicensed tax return preparers (individuals

who are not enrolled to practice before the

Internal Revenue Service (IRS)) and are

not licensed as attorneys or certified public accountants) have been disciplined.

Licensed or enrolled practitioners are subject to the regulations governing practice

before the IRS, which are set out in Title

31, Code of Federal Regulations (C.F.R.),

Subtitle A, Part 10, and which are released

as Treasury Department Circular No.

230. The regulations prescribe the duties

and restrictions relating to such practice

and prescribe the disciplinary sanctions

for violating the regulations. Unenrolled/

unlicensed return preparers who choose to

participate in the IRS’s voluntary Annual

Filing Season Program (AFSP) are subject to the guidance in Revenue Procedure

2014-42, which governs a preparer’s eligibility to represent taxpayers before the

IRS in examinations of tax returns the

preparer both prepared for the taxpayer

and signed as the preparer. Additionally,

unenrolled/unlicensed return preparers

who participate in the AFSP agree to be

subject to the duties and restrictions in

Circular 230, including the restrictions on

incompetence or disreputable conduct.

The disciplinary sanctions imposed for

violation of the applicable standards are:

Disbarred from practice before the

IRS—An individual who is disbarred

is not eligible to practice before the IRS

as defined at 31 C.F.R. (Circular 230)

§ 10.2(a)(4) for a minimum period of five

(5) years and until reinstated to practice.

February 9, 2026

Suspended from practice before the

IRS—An individual who is suspended

is not eligible to practice before the IRS

as defined at 31 C.F.R. (Circular 230)

§ 10.2(a)(4) during the term of the suspension and until reinstated to practice.

Censured—Censure is a public reprimand. Unlike disbarment or suspension,

censure does not affect an individual’s eligibility to practice before the IRS, but the

OPR may subject the individual’s future

practice rights to conditions designed to

promote high standards of conduct.

Payment of monetary penalty—A

monetary penalty may be imposed on an

individual who engages in conduct subject to sanction, or on an employer, firm,

or other entity if the individual was acting

on its behalf and it knew, or reasonably

should have known, of the individual’s

conduct.

Disqualification of appraiser—An

appraiser who is disqualified is barred

from presenting evidence or testimony in

any administrative proceeding before the

Department of the Treasury or the IRS.

Additionally, any appraisal made by the

disqualified appraiser after the effective

date of disqualification will not have any

probative effect in any administrative proceeding before the Treasury Department

or the IRS.

Ineligible for limited practice—An

unenrolled/unlicensed tax return preparer

who participates in the AFSP and who fails

to comply with Circular 230 as required

by Revenue Procedure 2014-42 may have

their AFSP credential revoked and may be

determined ineligible to engage in future

limited practice under the program as a

representative of a taxpayer.

Under the regulations, individuals

subject to Circular 230 may not assist, or

accept assistance from, suspended or disbarred individuals with respect to matters

constituting practice (i.e., representation)

before the IRS, and they may not aid or

abet suspended or disbarred individuals to

practice before the IRS.

Disciplinary sanctions announced

below are described in these terms:

Disbarred by decision, Suspended by

decision, Censured by decision, Mone-

540

tary penalty imposed by decision, and

Disqualified by decision (including after

a hearing)—An administrative law judge

(ALJ), upon the OPR’s complaint alleging violation of the regulations, issued a

decision imposing one of these sanctions

after the ALJ either (1) granted the OPR’s

motion for summary adjudication or (2)

after conducting an evidentiary hearing.

After 30 days from the issuance of the

decision, in the absence of an appeal, the

ALJ’s decision becomes the final agency

decision.

Disbarred by default decision, Suspended by default decision, Censured

by default decision, Monetary penalty imposed by default decision, and

Disqualified by default decision—An

ALJ, after finding that no answer to the

OPR’s complaint was filed or timely filed,

granted the OPR’s motion for a default

judgment and issued a decision imposing

one of these sanctions.

Disbarred by decision on appeal,

Suspended by decision on appeal, Censured by decision on appeal, Monetary penalty imposed by decision on

appeal, and Disqualified by decision

on appeal—The decision of the ALJ was

appealed to the agency’s appellate authority, acting as the delegate of the Secretary

of the Treasury, and the appellate authority issued a decision imposing one of these

sanctions.

Disbarred by consent, Suspended by

consent, Censured by consent, Monetary penalty imposed by consent, and

Disqualified by consent—In lieu of a

disciplinary proceeding being instituted or

continued, an individual offered their consent to one of these sanctions (or a firm or

other entity offered to consent to a monetary penalty) and the OPR accepted the

offer and the parties entered into a consent

agreement. Typically, an offer of consent

will provide for: suspension for an indefinite term; conditions that the individual

must observe during the suspension; and

the individual’s opportunity, after a stated

number of months, to file with the OPR

a petition for reinstatement affirming

compliance with the terms of the consent

agreement and affirming current fitness

Bulletin No. 2026–7

and eligibility to practice (i.e., an active

professional license or active enrollment

status, with no intervening violations of

the regulations).

Suspended indefinitely by decision in

expedited proceeding, Suspended indefinitely by default decision in expedited

proceeding—The OPR instituted an expedited proceeding for suspension (based on

certain limited grounds, including loss of a

professional license for cause, and criminal

convictions) that resulted in suspension.

Determined ineligible for limited

practice—There has been a final determination under Revenue Procedure 2014-42

that an unenrolled/unlicensed tax return

preparer is not eligible for continued limited representation of taxpayers because

the preparer violated standards of conduct prescribed in Circular 230 or failed

to comply with any of the requirements

described in the revenue procedure.

A practitioner who has been disbarred

or suspended under 31 C.F.R. Part 10’s

(Circular 230’s) § 10.60, (“Initiation of

proceeding” (before an ALJ)) or suspended under § 10.82 (“Expedited suspension”), or a disqualified appraiser may

petition for reinstatement before the IRS

after the expiration of 5 years following

such disbarment, suspension, or disqualification (or immediately following the

expiration of the suspension or disqualification period if shorter than 5 years).

Reinstatement will not be granted unless

the IRS is satisfied that the petitioner is

not likely to engage thereafter in conduct

contrary to Circular 230, and that granting

such reinstatement would not be contrary

to the public interest.

Reinstatement decisions are published

at the individual’s request, and described

in these terms:

Reinstated to practice before the

IRS—The OPR granted the individual’s

petition for reinstatement. The individual

is eligible to practice before the IRS, or in

the case of an appraiser, the individual is

no longer disqualified.

Reinstated to engage in limited practice before the IRS—The OPR granted

the individual’s petition for reinstatement.

The individual is eligible to engage in limited practice before the IRS as an unenrolled/unlicensed return preparer through

participation in the AFSP.

City & State

California

Encino

Name

Professional Designation

Disciplinary Sanction

Effective Date(s)

Kohanzad, Bijan

Enrolled Agent

Suspended by consent for

admitted violations of

31 C.F.R. § 10.51(a)(2)

Indefinite from

December 15, 2025

Maryland

Bowie

Ababio, Bennett A.

Enrolled Agent

Suspended by consent for

admitted violations of

31 C.F.R. § 10.51(a)(2)

Indefinite from

October 22, 2025

New York

Valley Stream

Hoffman, Roy

CPA

Suspended by consent for

admitted violations of

31 C.F.R. § 10.51(a)(10)

Indefinite from

December 3, 2025

Bulletin No. 2026–7

541

The OPR has authority to disclose

the grounds for disciplinary sanctions in

these situations: (1) an ALJ or the Secretary’s delegate on appeal has issued a

final decision imposing a sanction; (2) the

individual has settled a disciplinary case

by signing the OPR’s consent-to-sanction

agreement admitting to one or more violations of the regulations and consenting

to the disclosure of the admitted violations

(for example, willful failure to file Federal

income tax returns, lack of due diligence,

conflict of interest, etc.); (3) the OPR has

issued a decision in an expedited proceeding for indefinite suspension; or (4) upon

a final determination (including any decision on appeal) that an unenrolled/unlicensed return preparer is no longer eligible to represent taxpayers before the IRS

as an AFSP participant under Revenue

Procedure .

Announcements of disciplinary sanctions appear in the Internal Revenue Bulletin at the earliest practicable date. The

sanctions announced below are alphabetized first by state and second by the last

names of the sanctioned individuals (or

firms).

February 9, 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. 2026–7

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.

February 9, 2026

Numerical Finding List1

Bulletin 2026–7

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

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

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

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

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

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

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

February 9, 2026

ii

Bulletin No. 2026–7

Finding List of Current Actions on

Previously Published Items1

Bulletin 2026–7

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. 2026–7

iii

February 9, 2026

Internal Revenue Service

Washington, DC 20224

Official Business

Penalty for Private Use, $300

INTERNAL REVENUE BULLETIN

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