Tax law rarely stands still. While some changes make headlines, others arrive quietly through new regulations, enforcement announcements, and government reports. But even the less-publicized developments can have meaningful consequences for taxpayers, businesses, and the professionals advising them.
This month, several updates in IRS news and tax law caught my attention, from a nationwide tax fraud enforcement campaign to changes in how the IRS handles payments. Some are fairly straightforward. Others involve more technical areas of tax law. All are worth a closer look, particularly as the enforcement landscape continues to shift.
IRS Finalizes Rules Allowing Direct Credit and Debit Card Tax Payments
The IRS has finalized regulations allowing it to accept tax payments directly by credit or debit card without requiring taxpayers to use third-party payment processors.
Effective October 19, 2026, the regulations implement the Taxpayer First Act of 2019, which amended Section 6311(d)(2) of the Internal Revenue Code. Under the new rules, the IRS may pay processing fees, provided it fully recovers those costs from taxpayers using these payment methods. The IRS cannot retain any portion of the reimbursements.
For taxpayers, paying by card could become more direct, but not necessarily less expensive. Taxpayers will still be responsible for processing fees.
DOJ and IRS Announce Results of Nationwide Tax Fraud Enforcement Campaign
A recent nationwide tax fraud enforcement campaign resulted in prosecutorial actions involving 76 defendants and more than $490 million in estimated intended losses to the federal government.
The initiative, coordinated by the Department of Justice (DOJ), IRS Criminal Investigation, and 35 U.S. attorneys' offices, included new charges against 31 defendants involving more than $350 million in estimated intended losses. Another 39 enforcement actions, including trials, guilty pleas, and sentencings, involved 45 defendants and nearly $140 million in intended losses.
The campaign targeted fraudulent tax return preparation and false claims involving pandemic-era tax credits, including the Employee Retention Credit (ERC). In one North Carolina case, a preparer received a 60-month prison sentence for participating in a conspiracy involving approximately $23.9 million in fraudulent COVID-19 credit refund claims.
Other cases involved sham trust arrangements, fraudulent loan applications, and identity theft. In Georgia, prosecutors charged three defendants in an alleged $74 million scheme involving stolen identities and fraudulent refund checks.
The campaign is another indication that federal authorities are continuing to scrutinize questionable tax credit claims, return preparation practices, and the professionals who promote abusive tax arrangements. There's an important difference between an honest mistake and tax fraud, and for taxpayers who have concerns about past filings, coming forward voluntarily may be an option. For taxpayers and businesses facing an investigation, understanding the nature of the allegations and seeking legal guidance early can be critical.
IRS Temporarily Suspends Dyed Diesel Penalties
The IRS has announced nationwide penalty relief for dyed diesel fuel sold for highway use or used on public highways from October 1 through December 31, 2026.
Dyed diesel is generally intended for tax-exempt purposes, such as farming and off-road equipment. Using it on public highways ordinarily triggers federal excise taxes and penalties.
The relief follows Executive Order 14435, Emergency Tax Relief on Diesel Fuel, which directs the Treasury Department to defer certain diesel fuel tax payment obligations. During the relief period, the IRS will suspend federal inspections of on-road dyed diesel use, and taxpayers will not need to maintain records specifically to establish eligibility for the relief.
Businesses should be aware that the relief does not automatically eliminate underlying tax obligations or affect state fuel taxes and penalties. Those requirements must be considered separately, and procedural details like deadlines and penalty rules often matter more than taxpayers expect.
TIGTA Reports on IRS Transition to Electronic Payments
The IRS continues to move toward electronic payments and refunds, but the transition presents challenges for some taxpayers.
A recent Treasury Inspector General for Tax Administration (TIGTA) report found that approximately 654 million of the 743 million tax transactions processed during 2024 and 2025 were electronic, representing 88% of all transactions.
The report also identified barriers for taxpayers without bank accounts, those with limited access to technology, and individuals whose religious beliefs may restrict their use of electronic financial systems.
The challenge for the IRS is making sure taxpayers who can’t easily use electronic payments aren’t left without practical options.
IRS Clarifies Consolidated Return Rules for Stock Basis Adjustments
The IRS has finalized regulations clarifying the timing of certain stock basis adjustments when liabilities are assumed in transactions between members of a consolidated corporate group.
Under the new rules, certain liabilities that can give rise to tax deductions and are assumed in transfers governed by Section 351 of the Internal Revenue Code do not immediately reduce the transferor's basis in the transferee's stock. Instead, the reduction occurs when the related deduction is absorbed under Treasury Regulation Section 1.1502-32.
The regulations help prevent duplicate basis reductions and clarify the timing of adjustments. For corporations filing consolidated returns, getting the timing right can affect how these transactions are reported.
Maryland Expands Eligibility for Urban Agricultural Property Tax Credits
Maryland has expanded eligibility for local urban agricultural property tax credits by removing previous acreage and priority-funding-area requirements. The legislation took effect June 1, 2026, and applies to taxable years beginning after June 30, 2026.
Qualifying activities may include indoor growing, hydroponics, beekeeping, livestock, composting, pollinator habitats, agricultural education, and agritourism. Eligible properties must be used for urban agriculture and cannot already be assessed as agricultural land under state law.
The law also requires jurisdictions to provide at least one year's public notice and an opportunity for comment and appeal before terminating a credit determined to be ineffective.
For Maryland property owners and businesses involved in urban agriculture, the expanded eligibility may create new opportunities for property tax savings. However, local eligibility criteria and application procedures still apply.
Staying Informed as Tax Laws Evolve
Not every tax law change makes headlines, and not every development will affect every taxpayer. But understanding what's changing, and how it might apply to your circumstances, can help you avoid surprises and make more informed decisions.
With offices in Rockville, Maryland; Washington, D.C.; and Mumbai, India, Kundra Tax Law represents individuals and businesses nationwide and internationally. Our IRS tax attorneys handle complex tax matters, including IRS disputes, tax controversies, and criminal tax investigations. If you have questions about your tax obligations or are facing an IRS issue, contact our office to discuss your situation.