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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

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
www.irs.gov) or write to the Internal Revenue Service, Publishing Division, IRB Publishing Program Desk, 1111 Constitution Ave.
NW, IR-6230 Washington, DC 20224.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Airs%3Ae5424ee01f69f4c8. Public record. Not legal advice.