IRS Increases Standard Mileage Rates Effective July 1, 2026
The IRS has announced an increase to the optional standard mileage rates for the second half of 2026 in response to rising fuel costs. Effective July 1, 2026, the standard mileage rate for business use of a vehicle increases to 76 cents per mile, while the rate for deductible medical or qualified moving expenses increases to 23.5 cents per mile. The charitable mileage rate remains unchanged at 14 cents per mile, as it is set by law and is not adjusted for inflation.
Because this is a mid-year adjustment, two different mileage rates will apply during 2026. Mileage incurred through June 30, 2026, is subject to the rates established earlier this year, while travel on or after July 1, 2026, must use the updated rates. Businesses that reimburse employees for business mileage under an accountable plan should update their reimbursement procedures accordingly to ensure compliance with the new IRS guidance.
IRS Provides Guidance on Gift Tax Relief for Trump Account Contributions
The IRS has issued Revenue Procedure 2026-25, providing a welcome safe harbor for certain contributions made to Trump accounts, the new tax-advantaged savings accounts established under IRC Section 530A. Previously, contributions to these accounts could have been treated as gifts of a “future interest,” potentially requiring donors to file a federal gift tax return (Form 709) regardless of the amount contributed. Under the new guidance, eligible donors whose total gifts to any one recipient do not exceed the 2026 annual gift tax exclusion of $19,000 generally will not be required to file a gift tax return solely because of a Trump account contribution.
However, donors should be mindful that the safe harbor has limits. If total gifts to the same individual—including contributions to a Trump account, 529 education savings plan, or other gifts—exceed the annual exclusion amount during the year, a gift tax return may still be required. Families making multiple gifts for a child’s benefit should keep careful records and coordinate their gifting strategy to avoid unexpected filing requirements.
While the new guidance simplifies gift tax reporting, questions remain about the long-term administration of Trump accounts, including how they will interact with traditional and Roth IRAs once the account beneficiary reaches adulthood. As additional IRS guidance becomes available, we will continue to keep you informed of any developments that may affect your tax planning.
IRS Expands Online Features for Business Tax Accounts
The IRS has announced several enhancements to its Business Tax Account (BTA), making it easier for eligible businesses to access important tax information and complete common tasks online. New features include access to additional digital notices, such as refund notifications and extension approval letters, as well as the ability for authorized individuals to download an Employer Identification Number (EIN) verification notice that can be used in place of certain IRS correspondence when working with financial institutions.
The updated platform also allows eligible taxpayers to make payments toward an Offer in Compromise (OIC) online, providing a more convenient way to resolve qualifying tax debts. These improvements are part of the IRS’s continued efforts to expand digital self-service options for businesses. The Business Tax Account is currently available to sole proprietors with an EIN, partners, shareholders, S corporations, C corporations, government entities, and tax-exempt organizations.
For more information: https://bit.ly/4b0L2nU
IRS Finalizes Rules Targeting Charitable Remainder Trust Transactions
The IRS and U.S. Treasury have finalized regulations identifying certain abusive Charitable Remainder Annuity Trust (CRAT) strategies as “listed transactions.” The rules target arrangements in which appreciated assets are transferred to a CRAT, sold, and the proceeds used to purchase an annuity in an attempt to improperly defer or avoid taxes on capital gains and other income. The IRS has determined that these transactions misuse existing tax rules and has formally designated them as abusive tax avoidance schemes.
As a result, taxpayers who participate in these transactions, as well as material advisors who promote or assist with them, must disclose their involvement to the IRS or risk significant penalties. The final regulations, effective July 9, 2026, also clarify that charitable organizations serving only as the trust’s remainder beneficiary are not considered participants and are not subject to the disclosure requirements.
