1026 Publ 5084 (PDF)

Official source: IRS Forms, Instructions & Publications (https://www.irs.gov/pub/irs-pdf/p5084.pdf), retrieved 2026-10-03. U.S. Government work (17 U.S.C. § 105).

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Rules proposed to protect refundable tax credits from abuse

The Department of the Treasury and the IRS issued proposed regulations to apply and clarify the federal law regarding the eligibility requirements for taxpayer-funded refundable individual income tax credits.

(Full article on page 2)

Tax relief for farmers, ranchers affected by drought in 49 states

The IRS issued guidance that provides an extension of tax relief for farmers and ranchers in most states and other regions who sold or exchanged livestock because of drought conditions.

(Full article on page 3)

IRS sends notices for the Saver’s Match

The IRS is distributing more than 47 million CP321J notices by October to inform eligible taxpayers that the new Saver’s Match begins with retirement contributions made in 2027.

(Full article on page 3)

Helpful taxpayer information................................... 5

Multifactor authentication, IP PINs, and secure online accounts ...................................................... 6

Direct Pay offers free, easy way to pay taxes......... 7

Federal Scholarship Tax Credit............................... 7

In the News............................................................. 8

Get Help on IRS.gov . ............................................. 8

Connect with IRS & TAS . ........................................ 8

Treasury, IRS proposes rules to protect refundable tax credits from abuse by illegal aliens.................. 2

IRS announces extension of tax relief for farmers and ranchers affected by drought........................... 3

IRS sends notices to millions of taxpayers who may qualify for the Saver’s Match . ................................. 3

IRS calls on community organizations and volunteers to expand free tax services................... 4

Introducing IRS Congressional Portal..................... 4

Treasury, IRS proposes rules to protect refundable tax credits from abuse by illegal aliens

The Department of the Treasury and the IRS issued proposed regulations to apply and clarify the federal law regarding the eligibility requirements for taxpayer-funded refundable individual income tax credits, delivering on President Trump’s commitment to enforce our nation’s laws and ensuring tax benefits are reserved for American taxpayers.

“Under President Trump, the days of illegal aliens collecting taxpayer-funded benefits are over. The federal law is clear, and Treasury is enforcing it,” said Treasury Secretary Scott Bessent. “American taxpayers should not be forced to foot the bill for benefits going to those who are barred by law from receiving them. These proposed regulations end the abuse, protect the integrity of the tax system, and put Americans first.”

“Refundable tax credits, like the Earned Income Tax Credit (EITC), were enacted to help low-to-middle income American families and workers receive critical financial support,” said IRS Chief Executive Officer Frank J. Bisignano. “Today’s proposed regulations ensure that federally funded benefits are reserved for eligible taxpayers and protect the integrity of every taxpayer dollar.”

Background

The Treasury and IRS proposed regulations to strengthen enforcement of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) by clarifying that the refunded portion of certain refundable individual income tax credits are federal public benefits and establishing clear rules governing who is legally eligible to receive them.

This action cracks down on the abuse of taxpayer-funded refundable individual income tax credits and ensures that illegal aliens and other non-qualified aliens barred by federal law do not receive public benefits, which they are ineligible to receive.

Under PRWORA, only U.S. citizens, U.S. nationals, and qualified aliens are eligible to receive federal public benefits. The proposal follows legal analysis by the Department of Justice’s Office of Legal Counsel concluding that the refunded portions of the affected credits are federal public benefits.

Proposed regulations

The proposed regulations apply PRWORA to four individual income tax credits: the adoption tax credit, the child tax credit, the American opportunity tax credit, and the earned income tax credit.

To receive the refunded portion of an affected credit:

❯ The taxpayer must be a U.S. citizen, U.S. national, or

qualified alien on the date the taxpayer files the federal income tax return first claiming the affected credit. Qualified aliens include lawful permanent residents, asylees, refugees, and certain other groups defined or specified under PRWORA.

❯ The taxpayer must declare on the tax return, under

penalty of perjury, that the taxpayer is eligible to receive the refunded portion of the credit.

❯ For a joint return, only one spouse must be a U.S.

citizen, U.S. national, or qualified alien.

Only the refunded portion of the affected credits is treated as a federal public benefit. The refunded portion is the aggregate amount of the affected refundable credits that exceeds the income tax liability imposed for the tax year. A taxpayer who is not qualified to receive the refunded portion may still claim any portion of an affected credit for which the taxpayer otherwise qualifies that generally offsets income tax liability.

The proposed regulations would apply to tax years ending on or after the date the regulations are published as final regulations.

Treasury and the IRS will seek public comments and requests for a public hearing on all aspects of the proposed regulations. Complete instructions for submitting comments are included in the proposed regulations.

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IRS announces extension of tax relief for farmers and ranchers affected by drought in 49 states, other regions

The IRS issued guidance that provides an extension of tax relief for farmers and ranchers in most states and other regions who sold or exchanged livestock because of drought conditions. Under the guidance, those affected may take more time to replace their livestock and defer tax on any gains from the forced sales or exchanges.

“Large swaths of the United States continue to experience drought conditions, distressing hard-working American farmers and ranchers,” said IRS Chief Executive Officer Frank J. Bisignano. “By extending relief for those who sell or exchange livestock, the IRS is providing much-needed support to those who feed our nation.”

Notice 2026-54 PDF lists the specified areas, by county or other jurisdiction, that qualify for federal assistance. The list includes 49 states, the District of Columbia, Puerto Rico, and other areas that reported exceptional, extreme or severe drought during the 12-month period ending on Aug. 31, 2026.

The tax relief generally applies to capital gains realized by eligible farmers and ranchers from sales or exchanges of livestock held for draft, dairy or breeding purposes. Sales of other livestock—such as those raised for slaughter or held for sporting purposes – and sales of poultry do not qualify.

Eligible farmers and ranchers must show that drought

prompted the sales or exchanges, and that the area received a federal drought designation. Generally, livestock must be replaced within a four-year period, instead of the usual two-year period. The IRS is authorized to further extend this replacement period if the drought persists.

The replacement period extension announced in the notice gives eligible farmers and ranchers until the end of their first tax year after the first drought-free year after the four-year replacement period to replace the sold or exchanged livestock. As a result, eligible farmers and ranchers whose drought-sale replacement period was scheduled to expire at the end of 2026 will have until the end of their next tax year to replace the sold or exchanged livestock.

The IRS provides this extension to eligible farmers and ranchers if the applicable region is listed as suffering exceptional, extreme or severe drought conditions during any week between Sept. 1, 2025, and Aug. 31, 2026. This determination is made by the National Drought Mitigation Center.

Details and an example of how this provision works can be found in Notice 2006-82 PDF, available on IRS.gov.

More information on reporting drought sales and other farm-related tax issues can be found in Publication 225, Farmer’s Tax Guide PDF , available on IRS.gov.

IRS sends notices to millions of taxpayers who may qualify for the Saver’s Match

The IRS is distributing more than 47 million CP321J notices by October to inform eligible taxpayers that the new Saver’s Match begins with retirement contributions made in 2027.

The CP321J notice informs taxpayers about their potential eligibility for the Saver’s Match and how to claim the federal matching contribution. The Saver’s Match will equal up to 50% of the first $2,000 in qualifying contributions, for a maximum match of $1,000 per eligible individual. For married couples filing jointly, the match is calculated separately for each eligible spouse who makes qualifying contributions.

The notice is issued to taxpayers who claimed the Saver’s Credit on their 2025 tax return or whose 2025 income was

otherwise in the range of Saver’s Match eligibility.

2027 may claim the Saver’s Match when they file their 2027 federal tax return in 2028. The IRS

will provide a new Form 8880-A and instructions for claiming the match.

The IRS recommends that congressional offices encourage their constituents to open the notice upon

CP321J notice | Internal Revenue Service on IRS.gov.

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IRS calls on community organizations and volunteers to expand free tax services

The IRS is seeking volunteers and community partners to support the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs.

VITA and TCE programs help low- to moderate-income individuals and families gain access to free and trusted tax return preparation. These services would not be possible without the volunteers, schools, non-profits, financial institutions, faith-based groups and other community organizations who partner with the IRS.

Whether a tax professional is looking to manage a VITA/ TCE site as a site coordinator, or a student is looking to learn about tax preparation for the first time, there’s a volunteer opportunity for everyone. No experience is necessary to volunteer, with free specialized training offered by the IRS. Roles also expand beyond tax preparation, so those with skills in instructing, IT or translation services can also sign up to make a difference at a VITA/TCE site. Volunteers can often contribute based on their schedule, with virtual opportunities available.

Volunteers and partners make a huge impact across the country helping populations such as persons with disabilities, limited English speakers, senior citizens and more. Last year, approximately 9,000 VITA/TCE sites were hosted by community organizations. By hosting or sponsoring a VITA/ TCE site, partners ensure that underserved communities can file their returns with confidence and at no cost.

To learn more about becoming a VITA/TCE volunteer or partner, visit IRS.gov/volunteers or sign-up today using the VITA/TCE volunteer and partner sign-up form .

Introducing IRS Correspondence in the IRS Congressional Portal (October 2026)

This new capability streamlines how congressional offices submit, manage, and track correspondence with the IRS, including letters and constituent inquiries.

What you’ll be able to do

❯ Submit requests directly to the IRS via the portal.

❯ Track status from submission through final response.

❯ Communicate directly with the IRS to ask questions.

or add information.

❯ Access secure final responses in one place.

When & how to get ready

❯ Training materials and short videos will be available

in the portal before launch.

Why it matters

Faster responses, greater transparency, and simpler-follow up. Your office can track all submitted correspondence in one place and quickly check the status as needed.

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The top 5 tips for extension filers

Helpful taxpayer information on a variety of topics

Extension filers don’t have to wait until Oct. 15, 2026, to file their federal tax return. Taxpayers are encouraged not to wait and to take steps to help them prepare an accurate return. Let’s go over a few tips to make completing the return quick and easy.

Complete and accurate records can reduce errors and delays. Individual taxpayers can access their IRS Individual Online Account to view account information and transcripts, make payments, and manage communication preferences.

Taxpayers can see if they are eligible to file their return for free through IRS Free File . The program is available to taxpayers who had an adjusted gross income of $89,000 or less in 2025. IRS Free File is guided tax preparation and can help taxpayers determine their eligibility for many valuable tax credits.

IRS Free File Fillable Forms is available to taxpayers who are comfortable preparing and filing their own returns. Regardless of income level, taxpayers can still electronically file their returns at no cost.

Additionally, many Volunteer Income Tax Assistance and Tax Counseling for the Elderly sites still offer free basic tax return preparation to qualified individuals, including:

❯ People who generally qualify for the Earned Income Tax Credit

❯ Persons with disabilities

❯ Limited English-speaking taxpayers

Some may choose to use a tax professional to complete and file their return. A tip issued earlier this year provides important information on choosing a tax professional.

Don’t wait until the last minute

The extension to file is not an extension to pay. The deadline for extension filers is Oct. 15, 2026. Taxpayers should file electronically and choose direct deposit for their tax refund – it’s the fastest and safest way to receive their money.

Taxpayers in disaster areas may have more time to file. Information on the most recent tax relief for disaster situations is available on the IRS website.

Those who owe taxes and can’t pay their balance in full should pay as much as they can to reduce interest and penalties for late payment. The IRS has options for people who can’t pay their taxes, including applying for a payment plan on IRS.gov. Taxpayers can view payment options or check their account balance online.

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Multifactor authentication, IP PINs, and secure online accounts add layers of protection

The IRS and the Security Summit urge tax professionals and taxpayers to strengthen defenses against tax-related identity theft.

In the fourth installment of the “Protect Your Clients; Protect Yourself” summer series, the IRS and Security Summit partners highlight the benefits of multifactor authentication (MFA), Identity Protection PINs, and secure IRS online accounts. Under the Federal Trade Commission’s Safeguards Rule, tax preparation firms must use multifactor authentication to protect access to customer information, unless a Qualified Individual approves in writing an equivalent secure access control.

“Taxpayers and tax professionals should take advantage of the powerful tools available to help protect against identity theft,” said IRS Chief Executive Officer Frank J. Bisignano. “Using multifactor authentication, IP PINs, and other protections adds important layers of security that help safeguard sensitive data held by practitioners, taxpayers, and IRS systems.”

What tax pros should know about MFA

Multifactor authentication strengthens account security by requiring at least two independent factors to verify a user’s identity. These factors may include a password, a security code sent to a device, or biometric information.

MFA helps protect against phishing, social engineering, and other technology attacks that exploit weak or stolen passwords.

MFA best practices include:

❯ Use MFA across all services and data access points.

❯ Regularly review current MFA methods, standards, and

emerging technologies.

❯ Provide different authentication options

to meet users’ needs.

❯ Enable MFA in tax software, cloud storage, email, and

other services containing sensitive client information.

❯ Use individual accounts and never share

usernames or passwords.

Tax professionals should use MFA to secure client information on computers and networks and to access client information stored in tax preparation software. The MFA requirement applies to tax preparation firms regardless of size.

IP PINs help protect tax returns

An IRS Identity Protection PIN, also referred to as an IP PIN, is a critical defense tool against identity thieves filing fraudulent tax returns. It is a six-digit number known only to the taxpayer and the IRS. It helps the IRS verify the taxpayer’s identity when a federal tax return is filed. An IP PIN is valid for one calendar year, and a new number is generated each year.

Tax professionals cannot obtain an IP PIN on behalf of clients; taxpayers must obtain their own. Taxpayers may opt in by visiting the IRS Get an Identity Protection PIN on IRS.gov. Confrmed victims of tax-related identity theft automati- cally receive a new IP PIN each year.

IP PIN users should never share their number with anyone but the IRS and their trusted tax preparation provider. The IRS will never call, email, or text to request an IP PIN.

IRS Online Account and Tax Pro Account

The IRS encourages taxpayers to create an IRS Online Account to securely view their tax account information and to help protect against identity theft and fraud. Creating secure IRS accounts helps prevent fraudsters from creating accounts in taxpayers’ or tax professionals’ names.

IRS Online Account is available to anyone who can verify their identity. Tax professionals can encourage clients to use IRS Online Account and use Tax Pro Account to submit power of attorney and tax information authorization requests, manage active authorizations, and access eligible client information.

Security Summit and the Nationwide Tax Forums

The “Protect Your Clients, Protect Yourself” summer series is part of an annual education effort by the Security Summit . Since 2015, the public-private partnership has worked to protect the tax system against tax-related identity theft and fraud.

In addition to the five-part series, tax professional security is a key focus of the 2026 IRS Nationwide Tax Forum .

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Direct Pay offers free, easy way to pay taxes

The IRS reminds taxpayers who have bank accounts that Direct Pay offers a free, secure way to pay federal taxes directly from a checking or savings account.

Direct Pay is available on IRS.gov and allows taxpayers to make one-time payments from their bank account without signing in or paying fees. Taxpayers answer a few basic questions to verify their identity, and no registration is required. For individual payments, Direct Pay uses information from a prior-year tax return selected by the taxpayer. For business payments, Direct Pay verifies the business name and employer identification number (EIN) against IRS records.

effort to modernize payments to and from the government, Direct Pay gives taxpayers a free, secure, and convenient way to pay directly from a bank account,” said IRS Chief Executive Officer Frank J. Bisignano. “This is part of our ongoing effort to make it easier for taxpayers to interact with the IRS and take care of their tax responsibilities online.”

Taxpayers can use Direct Pay for individual tax payments, including balance due payments, estimated tax payments, amended return payments, extension payments, and other federal income tax payments. If taxpayers are married and file jointly, they must enter information for the spouse whose name is listed first on the tax return when they make their payment. Business taxpayers can use Direct Pay to make balance due payments, federal tax deposits, and other federal tax payments.

With Direct Pay, taxpayers can quickly handle many common payment tasks online and choose the payment date that works best for them. Direct Pay allows taxpayers to:

❯ Make a same-day payment or schedule a payment up to

365 days in advance.

❯ Receive a confirmation number and the option

for email confirmation.

❯ Change or cancel a scheduled payment up to two

business days before the payment date.

❯ Pay directly from a U.S. financial institution using bank

routing and account numbers.

Direct Pay cannot be used to receive tax refunds by

direct deposit. Taxpayers who have never filed a

tax return, or who have not filed in more than six

years, may need to use another payment option.

Each Direct Pay payment must be less than $10 million. Taxpayers who need to make payment of $10 million or more can use a same-day wire or the Electronic Federal Tax Payment System (EFTPS) , if they are already enrolled.

To make a payment, taxpayers can visit Direct Pay with bank account and select “Pay individual tax” or “Pay business tax.” Before making a payment, taxpayers must verify their identity by providing individual or business information. For more information about payment types, scheduling, confirmation numbers, and other payment options, visit Direct Pay Help .

Online Accounts

❯ Online account for individuals

❯ Business Tax Account

❯ Tax Pro Account

Filing and Payments

❯ E-fle: Do your taxes for free

❯ Payments

❯ Where’s My Refund?

❯ Where’s my application for tax-exempt status?

Online Tools

❯ Order forms and publications by U.S. mail

❯ Tax Exempt Organization Search

❯ Tax Withholding Estimator

❯ IRS Local Offce Locator

❯ Employer identifcation number

❯ Tools

Assistance

❯ Congressional Affairs Program

❯ Taxpayer Advocate Service (TAS)

Resources

❯ Working Families Tax Cuts

❯ Forms & instructions

❯ Report fraud

❯ Identity Theft Central

❯ Revocation or denial of passport

❯ Self-employed individuals tax center

❯ Disaster relief by state

Working Families Tax Cuts Links

❯ Individuals and workers

❯ Families and dependents

❯ Healthcare

❯ Businesses

❯ Clean energy

❯ Investment and community development

❯ Tax-exempt entities and charitable giving

❯ Other taxes

❯ Resources and guidance

Connect with IRS Connect with TAS

The IRS Congressional Update is a monthly newsletter prepared by IRS Legislative Affairs. For information on resolving taxpayer account issues, visit the Taxpayer Advocate Service .

Publication 5084 (Rev. 10-2026) Catalog Number 62903M Department of the Treasury Internal Revenue Service www.irs.gov

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