US Tax Insights: September 2026

Key highlights:

• Federal tax updates: Proposed Treasury regulations on international tax provisions affecting foreign tax credits and the repeal of the IRC §898 deferral election. The edition also highlights the FinCEN's removal of beneficial ownership reporting obligations for US companies and the IRS’s continued expansion of digital taxpayer services.
• State tax updates: State tax developments include California’s taxation of SaaS and digital products, Colorado’s expanded software tax regime, and New Jersey’s proposed restrictions on net operating loss utilisation.
• Federal administrative guidance: Key IRS notices address paid family and medical leave credits, retirement savings initiatives under SECURE 2.0, and new procedures affecting retirement plans and exempt organisations.
• State administrative guidance: Highlights include Connecticut's MyCTSavings compliance deadline, Nevada’s voluntary disclosure programme updates, Washington’s capital gains tax guidance, and New York City’s pied-à-terre tax rules.
• Private Letter Rulings (PLRs): Recent PLRs provide relief for late tax elections and compliance filings, including entity classification elections, Section 754 elections preserving basis adjustment benefits, consolidated return elections, debt cancellation income exclusions, and inherited IRA administration, offering practical guidance on preserving favourable tax outcomes.
• Judicial insights: Notable court decisions examine the application of Separate Return Limitation Year (SRLY) rules to inherited net operating losses and reaffirm the Internal Revenue Service’s authority to offset taxpayer overpayments against certain outstanding liabilities.
• Practical tax tips: Includes practical insights on protecting against tax-related identity theft and navigating the IRS appeals process.
• Expert perspective: Expert insights on the US tax treatment of stock options, equity compensation, and cross-border employee mobility.

US Tax Insights: September 2026

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