IRS Tax Matter Update for November 25 to December 10, 2025

Note: This article is for informational and editorial purposes only. It is not legal, tax, or accounting advice. Taxpayers should consult a qualified tax professional before acting on IRS guidance, court decisions, or refund-claim opportunities.

Introduction: A Two-Week IRS Update That Was Anything but Sleepy

The period from November 25 to December 10, 2025, delivered a surprisingly dense stack of IRS tax matter updates. In plain English, the IRS and Treasury were busy turning the One Big Beautiful Bill Act, often shortened to OBBBA, into working tax administration. Think of it as the moment after Congress builds the tax-law machine and the IRS has to find the instruction manual, tighten the bolts, label the buttons, and warn everyone not to put coffee in the paper tray.

During this short window, the IRS released guidance on scholarship contribution credits, Trump Accounts, international tax timing rules, controlled foreign corporation issues, foreign tax credit mechanics, foreign-derived deduction eligible income, and advanced energy project credits. At the same time, a major Court of Federal Claims decision, Kwong v. United States, opened a serious conversation about COVID-era penalty and interest refund claims. Add the newly enacted IRS Math and Taxpayer Help Act, and taxpayers had plenty to digest before the holiday cookies even cooled.

This IRS tax matter update explains what changed, why it matters, and how individuals, businesses, tax professionals, nonprofits, and multinational groups should read the tea leaves without accidentally swallowing the teacup.

Key IRS Tax Developments from November 25 to December 10, 2025

1. New Section 25F Scholarship Granting Organization Credit

On November 25, 2025, the IRS released Notice 2025-70, requesting comments on the new Section 25F credit for qualified contributions to Scholarship Granting Organizations, or SGOs. Beginning in 2027, eligible individual taxpayers may claim a nonrefundable federal income tax credit of up to $1,700 for qualified cash contributions to approved SGOs that fund elementary and secondary school scholarships for eligible students.

The important word here is “approved.” A donor cannot simply write a check to any education charity, high-five the mailbox, and call it a federal credit. The state must elect to participate, submit a list of qualifying SGOs, and certify that those organizations meet federal requirements. SGOs generally must be tax-exempt under Section 501(c)(3), not be private foundations, maintain separate accounts for qualified contributions, provide scholarships to at least ten students who do not all attend the same school, and spend at least 90 percent of income on scholarships for eligible students.

For taxpayers, the planning message is simple: the credit may be valuable, but documentation will be king. For states and nonprofits, the bigger issue is infrastructure. They will need systems to verify income eligibility, prevent earmarking for particular students, separate qualified funds, and report accurate information. In tax law, “trust me, bro” is not a compliance strategy.

2. Repeal of the One-Month Deferral Election for Specified Foreign Corporations

Notice 2025-72 addressed the OBBBA repeal of the one-month deferral election under Section 898(c)(2). This issue matters mainly to multinational groups with specified foreign corporations, especially controlled foreign corporations whose taxable year previously began one month earlier than the year of their majority U.S. shareholder.

For taxable years beginning after November 30, 2025, the old deferral election is repealed. The IRS guidance explains how affected foreign corporations transition into the required tax year. In many cases, this creates a short taxable year ending on the same date as the majority U.S. shareholder’s tax year. That may sound like accounting trivia until the tax department realizes it must allocate foreign income taxes, compute subpart F income, handle GILTI inclusions, review foreign tax credit positions, and adjust compliance calendars.

The notice also previews future proposed regulations under Section 987 that would modify recognition of pretransition gain or loss over a 120-month period. For multinational companies, this is a reminder that tax-year alignment is not just a calendar problem. It can affect income inclusion, credit timing, financial reporting, and the amount of coffee consumed by international tax teams.

3. Trump Accounts: New IRA-Style Accounts for Minors

On December 2, 2025, the IRS released Notice 2025-68, its first major guidance on Section 530A Trump Accounts. These accounts are structured as a type of traditional individual retirement account created for eligible individuals under age 18 who have a Social Security number issued before the election date.

The notice explains that Trump Accounts are subject to special rules during the “growth period,” which generally ends before January 1 of the year in which the beneficiary turns 18. During that period, investments are limited to eligible investments, special contribution rules apply, and distributions are generally restricted. After the growth period, many traditional IRA rules apply.

One headline feature is the pilot program contribution. For eligible children born after December 31, 2024, and before January 1, 2029, a $1,000 government contribution may be deposited into the account if the statutory requirements are met. Other contribution types may include qualified general contributions from governments or qualifying charities, certain employer contributions, rollover contributions, and contributions from parents or others.

For families, Trump Accounts may eventually become part of long-term child savings and retirement planning. For employers, payroll providers, financial institutions, and tax software companies, the guidance signals the need for new forms, account coding, reporting systems, and customer education. The IRS also requested comments, meaning the rulebook is still forming. Nobody should treat the first notice as the final movie; it is more like the trailer with several plot points still under editing.

4. Advanced Energy Project Credit Certifications Under Section 48C

On December 3, 2025, the IRS released Announcement 2025-22 and Announcement 2025-23, identifying taxpayers and amounts of certified Section 48C advanced energy project credits. The Section 48C(e) program provides credits for qualified investments in eligible advanced energy projects, including projects tied to clean energy manufacturing, recycling, greenhouse gas reduction, and energy communities.

The IRS and Treasury had two allocation rounds. Round One involved approximately $4 billion of allocated credits, while Round Two involved approximately $6 billion. The announcements publicly disclosed certified applicants and credit amounts, as required under the statute.

For companies in energy, manufacturing, battery supply chains, critical minerals, and industrial decarbonization, these announcements were more than a name-and-number list. They showed where federal energy tax incentives were flowing and gave competitors, investors, and local governments a clearer map of the clean-energy industrial pipeline. Tax credits, in this area, are not just tax credits. They are project finance fuel.

5. Section 951(a)(2)(B) Transition Rule for CFC Dividends

On December 4, 2025, Notice 2025-75 provided transition guidance for applying Section 951(a)(2)(B) after OBBBA changes. The guidance focuses on certain controlled foreign corporation taxable years beginning before January 1, 2026, and deals with how dividends affect subpart F and GILTI inclusions.

The IRS clarified that reductions to subpart F income and GILTI inclusions should not apply to dividends that do not increase a U.S. person’s taxable income. The notice also explains that determinations are made on a share-by-share basis and that forthcoming rules are expected for dividends received through partnerships and S corporations.

For tax departments, this means CFC dividend analysis cannot be done with a blunt instrument. Actual ownership periods matter. Dividend timing matters. Entity structure matters. The practical takeaway is to update workpapers now, not when the return deadline starts breathing down everyone’s neck like a dragon wearing a green eyeshade.

6. Foreign Tax Credit Guidance: Section 960(d)(4)

Notice 2025-77 addressed the effective date and application of Section 960(d)(4), which concerns a foreign tax credit limitation related to previously taxed earnings and profits, or PTEP. Under the OBBBA amendment, the disallowance percentage for certain foreign income taxes associated with Section 951A PTEP distributions is 10 percent, rather than the prior 20 percent haircut discussed in older rules.

The IRS explained that the effective date is determined by the U.S. shareholder’s taxable year and applies to relevant inclusions after June 28, 2025. The guidance also points to PTEP tracking requirements, including the need to distinguish pre- and post-effective-date categories.

This is not a kitchen-table tax issue for most individuals. But for U.S. corporations with CFC structures, it matters. Proper PTEP tracking is already one of the less glamorous areas of international tax compliance. This notice adds another layer of precision. If a spreadsheet could sigh, the PTEP workbook probably did.

7. FDDEI and Sales or Dispositions of Certain Property

Notice 2025-78 clarified how the OBBBA exclusion from foreign-derived deduction eligible income applies to income and gain from sales or dispositions of certain property. The notice focuses on Section 250(b)(3)(A)(i)(VII), which excludes certain income from deduction eligible income, including income from specified intangible property and certain depreciable, amortizable, or depletable property.

The guidance is especially relevant for domestic corporations that claim the Section 250 deduction and engage in cross-border sales, licensing, or asset transactions. The IRS indicated that the exclusion applies to sales or other dispositions after June 16, 2025, and introduced anti-abuse concepts aimed at related-party transactions structured to avoid the new exclusion.

The tax-planning message is clear: substance matters. If a transaction looks like it was designed mainly to squeeze income into a more favorable FDDEI category, the IRS may look twice, then look again with reading glasses.

8. Notice 2025-69 and the No-Tax-on-Tips and Overtime Transition

Although released shortly before this update window, Notice 2025-69 became especially relevant during the period because it appeared in Internal Revenue Bulletin 2025-50 on December 8, 2025. The notice provided guidance for individual taxpayers who received qualified tips or qualified overtime compensation during tax year 2025.

The key problem was timing. The OBBBA created new deductions, but 2025 Forms W-2, 1099-NEC, 1099-MISC, and 1099-K were not redesigned to separately report qualified tips or qualified overtime. As a result, employers and payors generally were not required to separately state those amounts on 2025 forms. Notice 2025-69 gave workers transition guidance on how to determine deduction amounts without that separate reporting.

For employees in tipped occupations, hospitality, delivery, personal services, healthcare support, public safety, manufacturing, and other overtime-heavy fields, the lesson is to keep records. Pay stubs, tip logs, employer reports, time records, and payroll summaries may become very useful. A shoebox full of receipts is not elegant, but it can still beat “I think it was around there somewhere.”

Major Court Development: Kwong v. United States

On November 25, 2025, the U.S. Court of Federal Claims issued its opinion in Kwong v. United States. The case drew attention because it interpreted pandemic-era deadline relief under Internal Revenue Code Section 7508A. Professional tax commentators quickly noted that the decision could support refund claims for certain taxpayers who paid underpayment interest or failure-to-file or failure-to-pay penalties tied to deadlines during the COVID-19 federally declared disaster period.

The potential issue is big: if certain federal tax deadlines were automatically postponed for a longer period than the IRS administratively allowed, some penalties and interest may have been assessed for periods when, under the court’s reasoning, the relevant payment or filing obligation was not yet due. That does not mean every taxpayer automatically receives a refund. Refund claims have deadlines, facts matter, and the government may challenge or narrow the implications of the case.

Still, tax professionals should review accounts for clients who paid significant penalties or underpayment interest for pandemic-era obligations. Protective refund claims, Form 843 filings, account transcripts, and statute-of-limitations analysis may be worth discussing. The key word is “protective.” Waiting until every court issue is perfectly settled may feel safe, but tax deadlines have the personality of a train door: they close whether or not you are still thinking about boarding.

Taxpayer Rights Update: IRS Math and Taxpayer Help Act

Another important development in this period was the enactment of the Internal Revenue Service Math and Taxpayer Help Act, H.R. 998. Signed into law on November 25, 2025, the law requires the IRS to give taxpayers clearer information when it changes a return because of a mathematical or clerical error.

Math error notices matter because the IRS can use summary assessment procedures without first issuing a regular notice of deficiency. Taxpayers generally have 60 days to request abatement of the math error assessment. Historically, many notices were criticized for being too vague, leaving taxpayers unsure what changed, why it changed, and how to challenge the adjustment.

The new law pushes the IRS toward clearer explanations, including more specific information about the alleged error and the taxpayer’s response rights. For ordinary taxpayers, this is a taxpayer-rights win. For the IRS, it means notice design, programming, training, and quality control must improve. For tax preparers, it means math error notices should become easier to diagnose, though nobody should expect every IRS letter to suddenly read like a friendly postcard from a beach vacation.

What These Updates Mean for Different Taxpayers

For Individual Taxpayers

Individuals should pay attention to three practical areas. First, the new scholarship credit under Section 25F may become relevant starting in 2027, but only for qualified contributions to state-listed SGOs. Second, the no-tax-on-tips and overtime guidance means 2025 recordkeeping is crucial, especially because information returns may not separately identify qualifying amounts. Third, the Math Act may improve future IRS notices, but taxpayers still must read every letter carefully and respond before deadlines expire.

For Families with Children

Trump Accounts may become part of long-term family financial planning, especially for children born during the pilot-program window. However, families should wait for final procedures before assuming how elections, account openings, contributions, investments, and reporting will work. The concept is simple enough; the administration details will be where the paperwork gremlins live.

For Businesses and Multinationals

Corporate taxpayers should prioritize international tax modeling. Notices 2025-72, 2025-75, 2025-77, and 2025-78 affect specified foreign corporations, CFCs, GILTI, subpart F, foreign tax credits, PTEP accounts, Section 987 transition items, and FDDEI calculations. These are not “check the box later” items. They may affect 2025 and 2026 tax provisions, estimated tax planning, return positions, and transfer pricing documentation.

For Tax Professionals

Tax advisers should build checklists around the new guidance. Ask clients about tipped income, overtime compensation, CFC taxable years, foreign dividends, PTEP tracking, Section 250 transactions, energy credit allocations, and COVID-era penalty payments. This is also a good time to review client IRS transcripts. The IRS may be updating the rulebook, but practitioners are the ones helping taxpayers find the right page.

Practical Planning Checklist

Review 2025 Wage and Tip Records

Workers who expect to claim deductions for qualified tips or overtime should gather pay stubs, employer statements, time sheets, tip records, and any payroll portal reports. Employers should be prepared for employee questions, even if 2025 forms do not separately report the new categories.

Track IRS Comment Deadlines

Several notices requested public comments. Tax-exempt organizations, states, payroll providers, banks, multinational companies, and trade associations may benefit from submitting comments while proposed regulations are still being shaped.

Update International Tax Workpapers

Multinationals should update CFC year-end calendars, subpart F and GILTI models, foreign tax credit computations, PTEP schedules, and Section 250 calculations. The worst time to discover an international tax transition rule is usually 11:48 p.m. on filing deadline day.

Evaluate COVID-Era Penalty Refund Possibilities

Taxpayers who paid penalties or interest connected to pandemic-era filing or payment deadlines should ask a tax adviser whether the Kwong decision creates a potential refund-claim opportunity. The analysis should include tax type, deadline date, payment date, penalty category, refund statute, and litigation risk.

Experience-Based Insights: How to Handle an IRS Tax Matter Update Without Losing Your Weekend

Anyone who has followed IRS guidance for more than five minutes knows the experience can feel like watching a weather forecast for accountants: “Expect scattered notices, possible proposed regulations, and a 90 percent chance of acronyms.” The November 25 to December 10, 2025 IRS tax matter update is a perfect example. A casual reader sees a list of notices. A tax professional sees action items hiding in every paragraph.

The first experience-based lesson is to separate “interesting” from “urgent.” Notice 2025-70 on scholarship credits is important, but most individual donors cannot use the credit until 2027. That makes it a planning and comment-period item, not a same-day filing panic. By contrast, Notice 2025-69 on tips and overtime affects tax year 2025 documentation. That is urgent for workers who need proof now, before records disappear into payroll systems, closed restaurants, seasonal jobs, or the mysterious black hole known as “old employee portal login.”

The second lesson is to match the guidance to the taxpayer profile. A parent with a newborn may care about Trump Accounts. A multinational manufacturer cares about CFC taxable years, FDDEI, and foreign tax credits. A restaurant server cares about qualified tips. A business that paid pandemic-era IRS penalties cares about Kwong. Not every update matters to every taxpayer. Good tax planning is partly knowing which fires are yours and which are just dramatic flames on someone else’s spreadsheet.

The third lesson is to document early. IRS guidance often creates a gap between law and forms. In 2025, the tip and overtime deductions are a clear example: the law changed, but the forms did not fully catch up for that year. When forms lag behind law, records become the bridge. Taxpayers should save pay stubs, payroll exports, invoices, tip logs, employer letters, and account transcripts. A clean PDF folder in December can prevent a very cranky scavenger hunt in April.

The fourth lesson is to treat court cases carefully. The Kwong decision is exciting for taxpayers who paid COVID-era penalties and interest, but excitement is not the same as certainty. A refund claim may be appropriate for some taxpayers, especially to preserve rights before deadlines expire. But each claim needs legal analysis, payment history, transcript review, and an understanding that future litigation could affect the outcome. In tax controversy, “maybe” can be valuable, but only if filed on time.

The fifth lesson is that IRS notices are improving, but taxpayers still need discipline. The Math and Taxpayer Help Act should make math error notices clearer, which is good news for everyone except perhaps the tiny population that enjoys decoding vague government letters by candlelight. Still, a clearer notice does not eliminate response deadlines. If a letter says 60 days, treat it like 60 days, not “sometime after I reorganize the garage.”

Finally, the best experience-based approach is to create a tax update habit. Once a month, review major IRS notices, save relevant documents, ask what affects the current year, and flag anything with a comment or refund deadline. Tax law will never be a beach read, but with a system, it can become manageable. And manageable is a beautiful word when the IRS is publishing guidance faster than your coffee machine can recover.

Conclusion

The IRS tax matter update for November 25 to December 10, 2025, shows how quickly tax law can move from statute to real-world administration. The IRS and Treasury began shaping rules for new education credits, Trump Accounts, tip and overtime deductions, energy project credits, and international tax changes under OBBBA. Meanwhile, Kwong v. United States raised potentially significant refund questions for COVID-era penalties and interest, and the IRS Math and Taxpayer Help Act strengthened taxpayer notice rights.

The bottom line is practical: taxpayers should not panic, but they should not nap either. Individuals should preserve records for tips, overtime, education contributions, and IRS notices. Families should watch Trump Account procedures. Businesses should update international tax models. Tax professionals should screen clients for refund claims, filing-position changes, and comment opportunities. The IRS guidance train is moving, and this is a very good time to check whether you are standing on the platform, holding the right ticket, or accidentally waiting for a bus.