Internal Revenue Bulletin 2025-50 (PDF rendition): IRS Revenue Rulings

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Bulletin No. 2025–50
December 8, 2025
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
ADMINISTRATIVE
Announcement 2025-29, page 785.
The Office of Professional Responsibility (OPR) announces
recent disciplinary sanctions imposed on attorneys, certi-
fied public accountants, enrolled agents, enrolled actuaries,
enrolled retirement plan agents, and appraisers. The OPR
also announces when certain unenrolled, unlicensed tax
return preparers (individuals who are not enrolled to prac-
tice before the Internal Revenue Service (IRS) and are not
licensed as attorneys or certified public accountants) have
been disciplined. Licensed or enrolled practitioners are sub-
ject to the regulations governing practice before the IRS,
which are set out in Title 31, Code of Federal Regulations,
Subtitle A, Part 10, and which are released as Treasury
Department Circular No. 230. The regulations prescribe
the duties and restrictions relating to such practice and
prescribe the disciplinary sanctions for violating the regula-
tions. Unenrolled/unlicensed return preparers who choose
to participate in the IRS’s voluntary Annual Filing Season
Program (AFSP) are subject to the guidance in Revenue
Procedure 2014-42, which governs a preparer’s eligibility
to represent taxpayers before the IRS in examinations of
tax returns the preparer both prepared for the taxpayer and
signed as the preparer. Additionally, unenrolled/unlicensed
return preparers who participate in the AFSP agree to be
subject to the duties and restrictions in Circular 230, includ-
ing the restrictions on incompetence or disreputable con-
duct.
EMPLOYMENT TAX
Notice 2025-69, page 766.
Notice 2025-69 provides guidance to individual taxpayers
who are eligible for the federal income tax deductions for
qualified tips or qualified overtime compensation for tax year
2025. These new deductions were added by Public Law 119-
21, 139 Stat. 72 (July 4, 2025), commonly known as the
One, Big, Beautiful Bill Act (OBBBA). As part of the phased
implementation of the OBBBA, there will be no changes to
the 2025 Form W-2, Form 1099-NEC, Form 1099-MISC, or
Form 1099-K to account for the new reporting requirements
in the OBBBA. As a result, employers and other payors will
not be required to separately account for cash tips or quali-
fied overtime compensation on those forms furnished to indi-
viduals for 2025. In the absence of this information report-
ing, this Notice provides guidance for individual taxpayers on
how to satisfy the requirements for the deductions, including
how to determine the amount of the qualified tips or qualified
overtime compensation, for tax year 2025. This Notice also
provides transition relief for taxpayers regarding the require-
ment that qualified tips must not be received in the course
of a trade or business that is a specified service trade or
business. This Notice does not affect any rights or respon-
sibilities regarding tips or overtime compensation under the
Fair Labor Standards Act of 1938, as amended.
INCOME TAX
Announcement 2025-22, page 783.
Section 48C(e)(1) directs the Secretary to establish the §
48C(e) program to consider and award certifications for
qualified investments eligible for § 48C credits to qualifying
advanced energy project sponsors. Section 48C(e)(7) pro-
vides that upon making a certification under § 48C(e), the
Secretary is required to disclose publicly the identity of the
applicant and the amount of the § 48C credit certified with
respect to such applicant. Notice 2023-18 established the
program under § 48C(e)(1). The Treasury Department and
the IRS provided two allocation rounds. For Round 1, the IRS
allocated approximately $4 billion. Round 1 allocation noti-
fication letters were issued on March 29, 2024. Announce-
ment 2025-22 provides the identity of each taxpayer and
the amount of the § 48C credits allocated to each taxpayer
with respect to projects that have been allocated a § 48C
Finding Lists begin on page ii.

credit and for which a certification was issued during the
period beginning on March 29, 2024, and September 30,
2025. The announcement also provides that the IRS will pub-
lish additional such announcements annually for certifications
issued during each successive 12-month period beginning
on October 1, 2025.
Announcement 2025-23, page 784.
Section 48C(e)(1) directs the Secretary to establish the §
48C(e) program to consider and award certifications for
qualified investments eligible for § 48C credits to qualifying
advanced energy project sponsors. Section 48C(e)(7) pro-
vides that upon making a certification under § 48C(e), the
Secretary is required to disclose publicly the identity of the
applicant and the amount of the § 48C credit certified with
respect to such applicant. Notice 2023-18 established the
program under § 48C(e)(1). The Treasury Department and
the IRS provided two allocation rounds. For Round 2, the IRS
allocated approximately $6 billion. Round 2 allocation notifi-
cation letters were issued on January 10, 2025. Announce-
ment 2025-23 provides the identity of each taxpayer and
the amount of the § 48C credits allocated to each taxpayer
with respect to projects that have been allocated a § 48C
credit and for which a certification was issued during the
period beginning on January 10, 2025, and September 30,
2025. The announcement also provides that the IRS will pub-
lish additional such announcements annually for certifications
issued during each successive 12-month period beginning
on October 1, 2025.
Notice 2025-70, page 773.
In anticipation of issuing proposed regulations to imple-
ment new § 25F of the Internal Revenue Code, as added
by § 70411 of Public Law 119-21, 139 Stat. 72 (July 4,
2025), commonly known as the One, Big, Beautiful Bill Act
(OBBBA), this notice requests comments regarding issues
arising under § 25F that should be addressed in guidance.
This notice emphasizes issues on which guidance is most
quickly needed, including issues relating to the annual certi-
fication by a State, as well as scholarship granting organiza-
tion requirements.
Notice 2025-71, page 779.
This notice provides interim rules under section 139L, which
was added to the Code by Public Law 119-21, 139 Stat. 72
(July 4, 2025), commonly known as the One, Big, Beautiful
Bill Act (OBBBA). This notice clarifies the partial exclusion
from gross income of interest received by qualified lenders
on loans secured by rural or agricultural property. The interim
guidance defines key terms from section 139L, establishes
standards for determining whether a loan is secured by rural
or agricultural property, and provides rules regarding refi-
nancings.
Rev. Rul. 2025-24, page 764.
Federal rates; adjusted federal rates; adjusted federal long-
term rate, and the long-term tax exempt rate. For purposes
of sections 382, 1274, 1288, 7872 and other sections of
the Code, tables set forth the rates for December 2025.

The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and
enforce the law with integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument
of the Commissioner of Internal Revenue for announcing offi-
cial rulings and procedures of the Internal Revenue Service
and for publishing Treasury Decisions, Executive Orders, Tax
Conventions, legislation, court decisions, and other items of
general interest. It is published weekly.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless other-
wise indicated. Procedures relating solely to matters of inter-
nal management are not published; however, statements of
internal practices and procedures that affect the rights and
duties of taxpayers are published.
Revenue rulings represent the conclusions of the Service
on the application of the law to the pivotal facts stated in
the revenue ruling. In those based on positions taken in rul-
ings to taxpayers or technical advice to Service field offices,
identifying details and information of a confidential nature are
deleted to prevent unwarranted invasions of privacy and to
comply with statutory requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions
of the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B,
Legislation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative
Rulings. Bank Secrecy Act Administrative Rulings are issued
by the Department of the Treasury’s Office of the Assistant
Secretary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
December 8, 2025 Bulletin No. 2025–50

Part I
Section 1274.—
Determination of Issue
Price in the Case of Certain
Debt Instruments Issued for
Property
(Also Sections 42, 280G, 382, 467, 468, 482, 483,
1288, 7520, 7872.)
Rev. Rul. 2025-24
This revenue ruling provides vari-
ous prescribed rates for federal income
tax purposes for December 2025 (the
current month). Table 1 contains the
short-term, mid-term, and long-term
applicable federal rates (AFR) for the
current month for purposes of section
1274(d) of the Internal Revenue Code.
Table 2 contains the short-term, mid-
term, and long-term adjusted applica-
ble federal rates (adjusted AFR) for the
current month for purposes of section
1288(b). Table 3 sets forth the adjusted
federal long-term rate and the long-
term tax-exempt rate described in sec-
tion 382(f). Table 4 contains the appro-
priate percentages for determining the
low-income housing credit described in
section 42(b)(1) for buildings placed in
service during the current month. How-
ever, under section 42(b)(2), the appli-
cable percentage for non-federally sub-
sidized new buildings placed in service
after July 30, 2008, shall not be less
than 9%. Finally, Table 5 contains the
federal rate for determining the present
value of an annuity, an interest for life
or for a term of years, or a remainder or
a reversionary interest for purposes of
section 7520.
REV. RUL. 2025-24 TABLE 1
Applicable Federal Rates (AFR) for December 2025
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term
AFR3.66%3.63%3.61%3.60%
110% AFR4.03%3.99%3.97%3.96%
120% AFR4.41%4.36%4.34%4.32%
130% AFR4.78%4.72%4.69%4.67%
Mid-term
AFR3.79%3.75%3.73%3.72%
110% AFR 4.17%4.13%4.11%4.09%
120% AFR4.55%4.50%4.47%4.46%
130% AFR4.94%4.88%4.85%4.83%
150% AFR5.71%5.63%5.59%5.57%
175% AFR6.67%6.56%6.51%6.47%
Long-term
AFR4.55%4.50%4.47%4.46%
110% AFR5.01%4.95%4.92%4.90%
120% AFR5.47%5.40%5.36%5.34%
130% AFR5.94%5.85%5.81%5.78%
REV. RUL. 2025-24 TABLE 2
Adjusted AFR for December 2025
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term adjusted AFR2.78%2.76%2.75%2.74%
Mid-term adjusted AFR2.87%2.85%2.84%2.83%
Long-term adjusted AFR3.45%3.42%3.41%3.40%
December 8, 2025 764 Bulletin No. 2025–50

REV. RUL. 2025-24 TABLE 3
Rates Under Section 382 for December 2025
Adjusted federal long-term rate for the current month3.45%
Long-term tax-exempt rate for ownership changes during the current month (the highest of the adjusted federal
long-term rates for the current month and the prior two months.)
3.58%
REV. RUL. 2025-24 TABLE 4
Appropriate Percentages Under Section 42(b)(1) for December 2025
Note: Under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after
July 30, 2008, shall not be less than 9%.
Appropriate percentage for the 70% present value low-income housing credit7.97%
Appropriate percentage for the 30% present value low-income housing credit 3.41%
REV. RUL. 2025-24 TABLE 5
Rate Under Section 7520 for December 2025
Applicable federal rate for determining the present value of an annuity, an interest for life or a term of years,
or a remainder or reversionary interest
4.60%

Section 42.—Low-Income
Housing Credit
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
December 2025. See Rev. Rul. 2025-24, page 764.
Section 280G.—Golden
Parachute Payments
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
December 2025. See Rev. Rul. 2025-24 page 764.
Section 382.—Limitation
on Net Operating Loss
Carryforwards and
Certain Built-In Losses
Following Ownership
Change
The adjusted applicable federal long-term rate
is set forth for the month of December 2025. See
Rev. Rul. 2025-24, page 764.
Section 467.—Certain
Payments for the Use of
Property or Services
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
December 2025. See Rev. Rul. 2025-24, page 764.
Section 468.—Special
Rules for Mining and Solid
Waste Reclamation and
Closing Costs
The applicable federal short-term rates are set
forth for the month of December 2025. See Rev.
Rul. 2025-24, page 764.
Section 482.—Allocation
of Income and Deductions
Among Taxpayers
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
December 2025. See Rev. Rul. 2025-24, page 764.
Section 483.—Interest on
Certain Deferred Payments
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
December 2025. See Rev. Rul. 2025-24, page 764.
Section 1288.—Treatment
of Original Issue Discount
on Tax-Exempt Obligations
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of December 2025. See Rev. Rul. 2025-24, page 764.
Section 7520.—Valuation
Tables
The applicable federal mid-term rates are set
forth for the month of December 2025. See Rev.
Rul. 2025-24, page 764.
Section 7872.—Treatment
of Loans With Below-
Market Interest Rates
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
December 2025. See Rev. Rul. 2025-24, page 764.

Bulletin No. 2025–50 765 December 8, 2025

December 8, 2025 766 Bulletin No. 2025–50
Part III
Guidance for Individual
Taxpayers who received
Qualified Tips or Qualified
Overtime Compensation in
2025
Notice 2025-69
I. PURPOSE
This Notice provides guidance to indi-
vidual taxpayers who are eligible for the
federal income tax deductions for quali-
fied tips or qualified overtime compensa-
tion for tax year 2025. These new deduc-
tions were added by Public Law 119-21,
139 Stat. 72 (July 4, 2025), commonly
known as the One, Big, Beautiful Bill Act
(OBBBA). As previously announced, and
as part of the phased implementation of the
OBBBA, there will be no changes to the
2025 Form W-2, Form 1099-NEC, Form
1099-MISC, or Form 1099-K to account
for the new reporting requirements in
the OBBBA.
1
As a result, employers and
other payors will not be required to sep-
arately account for cash tips or qualified
overtime compensation on those forms
or the written statements (copies of the
forms) furnished to individuals for 2025.
2

In the absence of this information report-
ing, this Notice provides guidance for
individual taxpayers on how to satisfy the
requirements for the deductions, including
how to determine the amount of the qual-
ified tips or qualified overtime compensa-
tion, for tax year 2025. This Notice also
provides transition relief for taxpayers
regarding the requirement that qualified
tips must not be received in the course of a
trade or business that is a specified service
trade or business. This Notice does not
affect any rights or responsibilities regard-
ing tips or overtime compensation under
the Fair Labor Standards Act of 1938, as
amended (FLSA).
II. BACKGROUND
Section 70201(a) of the OBBBA
added new section 224 to the Internal
Revenue Code (Code). In general, sec-
tion 224 provides an income tax deduc-
tion for “qualified tips” that are received
during the taxable year by individuals in
an occupation that customarily and regu-
larly received tips on or before Decem-
ber 31, 2024. Section 70201(b) of the
OBBBA added the deduction provided
by section 224 of the Code to the list
of deductions used to determine taxable
income in section 63(b).
Section 70202(a) of the OBBBA added
new section 225 to the Code. In general,
section 225 provides an income tax deduc-
tion for “qualified overtime compensa-
tion”, defined in section 225(c) as over-
time compensation paid to an individual
required under section 7 of the FLSA that
is in excess of the regular rate at which the
individual is employed.
3
Section 70202(b)
of the OBBBA added the deduction pro-
vided by section 225 of the Code to the list
of deductions used to determine taxable
income in section 63(b). Both deductions
are available for tax years beginning after
December 31, 2024, and ending before
January 1, 2029.
A. No Tax on Tips under Section 224
Section 224(a) provides a deduction
in an amount equal to the qualified tips
received by an individual in a taxable
year that are included on statements
4
fur-
nished to the individual pursuant to sec-
tion 6041(d)(3), section 6041A(e)(3), sec-
tion 6050W(f)(2), or section 6051(a)(18),
or are reported by the taxpayer on Form
4137 (or successor). Section 224(b)(1)
limits the amount of the deduction to an
amount not to exceed $25,000 in a taxable
year. Section 224(b)(2) further limits the
amount based on a taxpayer’s modified
adjusted gross income (MAGI), which is
a taxpayer’s adjusted gross income for
the tax year increased by any amount
excluded from gross income under sec-
tion 911, section 931, or section 933. The
deduction phases out for taxpayers with
MAGI over $150,000 ($300,000 for joint
filers).
Section 224(c) provides that, in the case
of qualified tips received by an individual
during any taxable year in the course of
a trade or business (other than the trade
or business of performing services as an
employee) of such individual, such qual-
ified tips are taken into account under
section 224(a) only to the extent that the
gross income for the taxpayer from such
trade or business for such taxable year
(including such qualified tips) exceeds
the sum of the deductions allocable to the
trade or business in which such qualified
tips are received by the individual for such
taxable year.
Section 224(d)(1) defines “qualified
tips” as cash tips received by an indi-
vidual in an occupation that customarily
and regularly received tips on or before
December 31, 2024, as provided by the
Secretary.
5
Section 224(d)(2) further
requires that qualified tips not include any
amount received by an individual unless
the amount:
• Is paid voluntarily without any conse-
quence in the event of nonpayment, is
not the subject of negotiation, and is
determined by the payor;
1
See IRS News Release IR-2025-82 (Aug. 7, 2025). Forms W-2, 1099-NEC, 1099-MISC, and 1099-K will be updated for tax year 2026 to provide separate reporting of the employee’s
qualified tips and qualified overtime compensation.
2
On November 5, 2025, the Internal Revenue Service (IRS) published Notice 2025-62, IRB 2025-48, which provides penalty relief from the new information reporting requirements for cash
tips and qualified overtime compensation under the OBBBA to employers and other payors for not filing correct information returns and not providing correct payee statements to employees
and other payees. Specifically, this notice provides relief from the penalty under section 6721 for failure to file correct information returns and the penalty under section 6722 for failure to
furnish correct payee statements. This relief applies only for taxable year 2025. See IRS News Release IR-2025-110 (Nov. 5, 2025).
3
The FLSA is codified at 29 USC §§ 201-219. Section 7 is found at 29 USC § 207.
4
The House Budget Committee report on the OBBBA, H. Rept. 119-106, at 1503 (2025), specifies that the tip amounts included on reporting statements (for example, Form 1099) must
be separately accounted for on the statements in order to take the deduction. The OBBBA revisions to sections 6041, 6041A, and 6050W further require the statements to provide either a
separate accounting or the portion of the amount designated as tips. The OBBBA revision to section 6051 follows the existing statutory structure of enumerating each separate category of
amounts to be listed on the Form W-2.
5
Under section 7701(a)(11)(B), Secretary means the Secretary of the Treasury or his delegate.

Bulletin No. 2025–50 767 December 8, 2025
• Is not received in the course of a trade
or business that is a specified service
trade or business as defined in section
199A(d)(2); and
• Satisfies such other requirements as
may be established by the Secretary
in regulations or other guidance.
Section 224(d)(2) further provides that
an individual receiving tips in the trade
or business of performing services as an
employee is treated as receiving tips in
the course of a trade or business that is
a specified service trade or business as
defined in section 199A(d)(2) if the trade
or business of the employer in which they
are employed is a specified service trade
or business.
Section 224(d)(3) provides that for pur-
poses of section 224(d)(1), the term “cash
tips” includes tips received from custom-
ers that are paid in cash or charged and,
in the case of an employee, tips received
under any tip-sharing arrangement.
Section 224(e) provides that no deduc-
tion is allowed under section 224 unless
the taxpayer includes on the tax return for
the taxable year such individual’s social
security number as defined in section
24(h)(7) of the Code.
Section 224(f) provides that if the tax-
payer is a married individual (within the
meaning of section 7703), section 224
applies only if the taxpayer and the tax-
payer’s spouse file a joint return for the
taxable year. That is, the deduction is not
available for a taxpayer who is married
and files separately.
Section 70201(h) of the OBBBA
instructs the Secretary to publish a list of
occupations that customarily and regu-
larly received tips on or before December
31, 2024, for purposes of section 224(d)
(1) of the Code no later than 90 days after
the date the OBBBA was enacted (July 4,
2025). On September 19, 2025, a notice
of proposed rulemaking (NPRM) (REG-
110032-25) was published in the Federal
Register (90 FR 45340) that includes a pro-
posed list of occupations that customarily
and regularly received tips on or before
December 31, 2024, and a proposed defi-
nition of qualified tips for purposes of the
income tax deduction for qualified tips.
The NPRM states that taxpayers may rely
on the proposed regulations, including the
proposed list of eligible occupations, for
taxable years beginning after December
31, 2024, and on or before the date the
regulations are published as final regula-
tions in the Federal Register, provided that
taxpayers follow the proposed regulations
in their entirety and in a consistent man-
ner.
Section 70201(f) of the OBBBA added
to the information reporting requirements
of the Code for employers and other pay-
ors making payments of cash tips by:
(1) amending section 6041(a) of the
Code to require a payor to include on the
information return filed with the IRS a
separate accounting of any such amounts
reasonably designated as cash tips and the
occupation described in section 224(d)(1)
of the person receiving such tips;
(2) adding new paragraph (d)(3) to sec-
tion 6041 to provide that, in the case of
compensation to non-employees, a payor
is required to include on the written state-
ment furnished to the payee the portion
of payments reasonably designated as
cash tips and the occupation described in
section 224(d)(1) of the person receiving
such tips;
(3) amending section 6041A(a) to
require a payor to include on the informa-
tion return filed with the IRS a separate
accounting of any such amounts reason-
ably designated as cash tips and the occu-
pation described in section 224(d)(1) of
the person receiving such tips;
(4) adding new paragraph (e)(3) to sec-
tion 6041A to provide that, in the case of
section 6041A(a), a payor is required to
include on the written statement furnished
to the payee the portion of payments rea-
sonably designated as cash tips and the
occupation described in section 224(d)(1)
of the person receiving such tips;
(5) adding new paragraph (a)(3) to sec-
tion 6050W to provide that, in the case
of a third party settlement organization
(TPSO), the TPSO must include on the
information return filed with the IRS the
portion of reportable payment transactions
that have been reasonably designated by
payors as cash tips and the occupation
described in section 224(d)(1) of the per-
son receiving such tips;
(6) amending section 6050W(f)(2) to
require a TPSO to include on the written
statement furnished to the payee a separate
accounting of any such amounts that have
been reasonably designated by payors as
cash tips and the occupation described in
section 224(d)(1) of the person receiving
such tips; and
(7) adding new paragraph (a)(18) to
section 6051 to provide that an employer
must include on the written statement fur-
nished to the employee the total amount
of cash tips reported by the employee
under section 6053(a) and the occupation
described in section 224(d)(1) of such per-
son.
Section 70201(k) of the OBBBA pro-
vides a transition rule for persons required
to file returns or furnish statements under
section 6041(a), 6041(d)(3), 6041A(a),
6041A(e)(3), 6050W(a), or 6050W(f)
(2) of the Code for cash tips required to
be reported for periods before January 1,
2026. Under this transition rule, those per-
sons may approximate a separate account-
ing of amounts designated as cash tips by
any reasonable method specified by the
Secretary.
Section 6053(a) requires every
employee who, in the course of the
employee’s employment by an employer,
receives in any calendar month tips that
are wages (as defined in section 3121(a)
for Federal Insurance Contributions Act
(FICA) tax purposes or section 3401(a)
for income tax withholding purposes)
6
to
report all those tips in one or more writ-
ten statements furnished to the employer
on or before the tenth day of the follow-
ing month. The employee is to furnish the
statements in the form and manner pre-
scribed by the IRS. See § 31.6053-1(b) of
the Employment Tax Regulations.
B. No Tax on Overtime under Section
225
Section 225(a) provides for a deduc-
tion in an amount equal to the qualified
overtime compensation received by an
individual in a tax year that is included
on statements furnished to the individual
pursuant to section 6041(d)(4) or 6051(a)
(19). Section 225(b)(1) limits this deduc-
6
See also sections 3121(a)(12) and 3401(a)(16) of the Code (generally excluding from wages non-cash tips and tips under $20 per month), sections 3121(q) and 3401(f) (specifically including
tips in wages), and the regulations thereunder.

December 8, 2025 768 Bulletin No. 2025–50
tion to an amount not to exceed $12,500
per return ($25,000 in the case of a joint
return) in a tax year. Section 225(b)(2)
further limits the amount of the deduc-
tion based on a taxpayer’s MAGI, which
is a taxpayer’s adjusted gross income
for the tax year increased by any amount
excluded from gross income under sec-
tion 911, section 931, or section 933. The
deduction phases out for taxpayers with
MAGI over $150,000 ($300,000 for joint
filers).
Section 225(c)(1) defines “qualified
overtime compensation” as overtime com-
pensation paid to an individual required
under 29 USC § 207 that is in excess of
the regular rate at which the individual is
employed. The FLSA defines the regular
rate as including “all remuneration for
employment paid to, or on behalf of, the
employee”, subject to eight exclusions
established in 29 USC § 207(e). Part 778
of CFR title 29 contains the regulations
addressing the calculation of the regular
rate of pay for overtime compensation
under 29 USC § 207. Individuals covered
7

by the FLSA generally must receive over-
time pay for hours worked in excess of
40 in a workweek at a rate not less than
one and one-half times their regular rate
of pay. Generally, the amount of overtime
pay due to an individual is based on the
individual’s regular rate of pay
8
and the
number of hours worked in a workweek.
9

Certain individuals are statutorily exempt
from the FLSA’s overtime requirements.
10

The Code and the FLSA use different defi-
nitions of “employee.” Therefore, it is
possible (but not common) for a non-em-
ployee under the Code to be covered as an
employee under the FLSA.
Under the FLSA, the overtime require-
ments are different for certain classes of
employers and employees (as defined in
the FLSA) under specific circumstances.
For example, 29 USC § 207(k) allows
overtime for public sector employees in
fire protection and law enforcement to
be based on a work period longer than
a standard 40-hour workweek in certain
circumstances, and subsection 29 USC
§ 207(j) allows hospitals and certain
residential care facilities to adopt agree-
ments with their employees in certain
circumstances to pay one-and-one-half
times overtime rates for all hours worked
over eight in any workday or over 80 in
a 14-day work period, whichever is the
greater number of overtime hours. The
FLSA also permits employers to sat-
isfy the overtime pay requirements with
(1) certain payments creditable under 29
USC § 207(h); (2) paid compensatory
time off in certain circumstances by a
public agency which is a State, a politi-
cal subdivision of a State or an interstate
governmental agency under 29 USC
§ 207(o); and (3) alternative rate struc-
tures under 29 USC § 207(g).
Some employers or other service-recip-
ients, on their own initiative, under a col-
lective bargaining agreement with a labor
union, and/or under State law, may pro-
vide overtime pay that is not required by
29 USC § 207. For example, an employer
may choose to pay a higher overtime
amount than the one and one-half times
an individual’s regular rate of pay that is
generally required by the FLSA (e.g., the
employer may choose to pay double time
for hours worked over 40 in a workweek)
or they may choose to pay employees an
extra amount to work on weekends or
holidays.
11
In such cases, while the addi-
tional one-half times portion required by
the FLSA may be qualified overtime, pay-
ments in excess of the FLSA-required pre-
mium are not.

Section 225(c)(2) of the Code excludes
from the definition of qualified overtime
compensation any qualified tips as defined
in section 224(d) of the Code.
Section 225(d) provides that no deduc-
tion is allowed under section 225 unless
the taxpayer includes on the return of tax
for the tax year such individual’s social
security number as defined in section
24(h)(7) of the Code.
Section 225(e) provides that if the tax-
payer is a married individual (within the
meaning of section 7703), section 225
applies only if the taxpayer and the tax-
payer’s spouse file a joint return for the tax
year. That is, the deduction is not available
for a taxpayer who is married and files
separately.
Section 70202(c) of the OBBBA added
to the information reporting requirements
of the Code for employers and certain
other payors for certain payments of qual-
ified overtime compensation by:
(1) adding new paragraph (a)(19) to
section 6051 of the Code to provide that
an employer must include on the written
statement furnished to the employee the
total amount of qualified overtime com-
pensation (as defined in section 225(c)),
(2) amending section 6041(a) to
require a payor to include on the infor-
mation return filed with the IRS a sepa-
rate accounting of any amount of qualified
overtime compensation (as defined in sec-
tion 225(c)), and
(3) adding new paragraph (d)(4) to
section 6041 to provide that a payor is
required to include on the written state-
ment furnished to the payee the portion of
payments that are qualified overtime com-
pensation (as defined in section 225(c)).
Section 70202(h) of the OBBBA pro-
vides a transition rule for persons required
to file returns or furnish statements under
7
See U.S. Department of Labor (DOL), Wage and Hour Division (WHD), Fact Sheet #14: Coverage Under the Fair Labor Standards Act (FLSA) | U.S. Department of Labor, https://www.
dol.gov/agencies/whd/fact-sheets/14-flsa-coverage (last visited Oct. 28, 2025).
8
Earnings may be determined on a piece-rate, salary, commission, or some other basis, but in all such cases the overtime pay due must be computed on the basis of the average hourly rate
derived from such earnings. This rate is calculated by dividing the total pay for employment (except for the statutory exclusions) in any workweek by the total number of hours actually
worked. See DOL, WHD, Fact Sheet #56A: Overview of the Regular Rate of Pay Under the Fair Labor Standards Act (FLSA) | U.S. Department of Labor, https://www.dol.gov/agencies/whd/
fact-sheets/56a-regular-rate (last visited Oct. 28, 2025).
9
The FLSA applies on a workweek basis. An employee’s workweek is a fixed and regularly recurring period of 168 hours -- seven consecutive 24-hour periods. It need not coincide with the
calendar week and may begin on any day and at any hour of the day. See DOL, WHD, Fact Sheet #23: Overtime Pay Requirements of the FLSA | U.S. Department of Labor, https://www.dol.
gov/agencies/whd/fact-sheets/23-flsa-overtime-pay (last visited Oct. 28, 2025).
10
See, e.g., 29 USC 207(i), 213. Whether an individual is exempted under the FLSA is a fact-specific determination that depends on the individual’s occupation, work activities, and/or earn-
ings. More information on exemptions from the FLSA is available at WHD Fact Sheets | U.S. Department of Labor, https://www.dol.gov/agencies/whd/fact-sheets (last visited Oct. 28, 2025).
11
Amounts for which the employer can and does claim a credit under 29 USC § 207(h) to satisfy 29 USC § 207(a) may constitute qualified overtime compensation (although the credit effec-
tively offsets other qualified overtime compensation). Individuals may consider requesting information from their employer for purposes of calculating this amount. See also Fact Sheet #21:
Recordkeeping Requirements under the Fair Labor Standards Act (FLSA) | U.S. Department of Labor regarding employer’s recordkeeping requirements, https://www.dol.gov/agencies/whd/
fact-sheets/21-flsa-recordkeeping (last visited Oct. 28, 2025).

Bulletin No. 2025–50 769 December 8, 2025
section 6051(a)(19), 6041(a), or 6041(d)
(4) of the Code for qualified overtime
compensation required to be reported for
periods before January 1, 2026. Under this
transition rule, those persons may approx-
imate a separate accounting of amounts
designated as qualified overtime compen-
sation by any reasonable method specified
by the Secretary.
III. GUIDANCE FOR TAX YEAR
2025
A. Qualified Tips
1. Determining the amount of qualified
tips received by employees
Under Section 224(a), an employee
may deduct an amount equal to the qual-
ified tips received during the taxable year
and included on a statement furnished to
the employee (a Form W-2) or reported
by the employee on Form 4137, subject
to certain limitations. Section 6051(a)
(18) requires employers to include the
total amount of cash tips reported by
the employee to the employer and the
employee’s occupation described in sec-
tion 224(d)(1) on the Form W-2. Only
cash tips separately accounted for on the
Form W-2 or reported on the Form 4137
are included in calculating the deduction.
As noted above, the 2025 Form W-2
has not been modified to account for the
new tips reporting requirements. As a
result, employers are not required to sep-
arately account for cash tips on the writ-
ten statements furnished to individuals for
2025. Therefore, the Department of the
Treasury (Treasury Department) and the
IRS have determined that, for purposes
of satisfying the requirements of section
224(a) for tax year 2025, an employee
may (1) treat the section 224(a) require-
ment that qualified tips be included on a
statement furnished to the employee pur-
suant to section 6051(a)(18) as satisfied
if the employee’s cash tips are properly
reported on the employee’s Form W-2,
without regard to the requirements of sec-
tion 6051(a)(18) (to separately account
for the total amount of cash tips reported
by the employee under section 6053(a)),
and (2) calculate the amount of qualified
tips (subject to the other limitations and
requirements for qualified tips in section
224) for tax year 2025 as follows:
1) Use the total amount of social secu-
rity tips reported in box 7 of the Form
W-2;
2) Use the total amount of tips reported
by the employee to the employer on
all Forms 4070, Employee’s Report of
Tips to Employer (or any similar sub-
stitute form used to monthly report
tips to the employer); or
12

3) If an employer voluntarily chooses
to report the amount of an employ-
ee’s cash tips in box 14 of Form
W-2 (or on a separate statement), the
employee may use this amount in
determining the amount of qualified
tips for tax year 2025.
4) In addition to these three options,
employees may also include any
amount listed on line 4 of the 2025
Form 4137 filed with the employee’s
2025 income tax return (and included
as income on that return).
Although the occupation of an
employee receiving tips may not appear on
the Form W-2 furnished to the employee
in 2025, the employee is still responsible
for determining whether the tips received
by the employee were received in an
occupation that customarily and regu-
larly received tips on or before December
31, 2024, as provided by the Secretary.
13

See 2025 Form 1040 instructions. Some
employers may choose to provide infor-
mation on an employee’s occupation or
other relevant information to employees
using box 14 of Form W-2, in which case
employees may rely on that information.
The Treasury Department and the IRS
recognize that the deduction for qualified
tips is a newly enacted provision and that
employees receiving tips are determining
their eligibility for the deduction for the
first time. The Treasury Department and
the IRS understand that it may be par-
ticularly difficult for employees to deter-
mine whether their tips were received in
the course of a specified service trade or
business, since section 224(d)(2) provides
that this determination turns on whether
the trade or business of their employer
in the course of which they receive tips
is a specified service trade or business.
Reporting by the employer regarding
the employer’s specified service trade or
business status would be helpful both to
assist employees in determining whether
they are eligible for the tips deduction and
to the IRS in administering section 224.
However, in order to implement such
information reporting, employers with
employees who receive tips will have to
make a determination as to whether their
trade or business in the course of which an
employee receives tips is a specified ser-
vice trade or business, and many of these
employers, a significant number of which
are small businesses, have not previously
had to make such a determination. Given
these circumstances, the Treasury Depart-
ment and the IRS believe that additional
guidance is needed to assist employees
and employers in determining whether an
employer’s trade or business is a specified
service trade or business. Employees and
employers will also need additional time
once guidance is issued to understand and
implement the guidance. Accordingly, in
the interest of sound tax administration,
there will be a transition period for pur-
poses of IRS enforcement and adminis-
tration with regard to the specified service
trade or business requirement. Specifi-
cally, until January 1 of the first calendar
year following the issuance of final reg-
ulations regarding the determination of
whether a trade or business is a specified
service trade or business for purposes
of section 224 and associated employer
information reporting, the IRS will treat
the employee as having received tips in
the course of a trade or business that is
not a specified service trade or business
if the employee is in an occupation that
customarily and regularly received tips on
or before December 31, 2024, as provided
12
If the combined total of the amounts in boxes 3 and 7 of the employee’s Form W-2 is equal to $176,100, the amount in box 7 may not include all the employee’s cash tips. In this instance,
the employee should consider reviewing the Forms 4070 they used to report tips to their employer.
13
Taxpayers claiming the deduction under section 224 on their tax return must demonstrate they meet the requirements of section 224 and establish that they are entitled to the deduction as
well as determine the appropriate amount of the deduction. Taxpayers must maintain adequate books and records to substantiate both their eligibility for and the amount of any deduction
claimed. See § 6001; Treas. Reg. § 1.6001-1; See generally Publication 17, pp. 17-18.

December 8, 2025 770 Bulletin No. 2025–50
by the Secretary. The Treasury Depart-
ment and the IRS intend to issue proposed
regulations and solicit public comment on
these issues before publishing final regu-
lations.
2. Determining the amount of qualified
tips for non-employees
Under section 224(a) an individual
may deduct an amount equal to the qual-
ified tips received as a non-employee
during the taxable year and included on
a statement furnished to the individual (a
Form 1099-MISC, 1099-NEC, or 1099-
K), subject to certain limitations. Under
sections 6041(d)(3), 6041A(e)(3), and
6050W(f)(2), payors must include on
the applicable Form 1099 the portion of
(or a separate accounting of) payments
that have been reasonably designated as
cash tips and the occupation described
in section 224(d)(1) of the individual
receiving the tips. Only cash tips sepa-
rately accounted for on the applicable
Form 1099 are included in calculating
the deduction.
However, for tax year 2025, a sepa-
rate accounting of cash tips received by
a non-employee will not appear on the
Form 1099 furnished to the non-em-
ployee. Therefore, the Treasury Depart-
ment and the IRS have determined that,
for purposes of satisfying the require-
ments of section 224(a) for tax year
2025, a non-employee may (1) treat the
section 224(a) requirement that qualified
tips be included on a statement furnished
pursuant to the requirements of sections
6041(d)(3), 6041A(e)(3), or 6050W(f)(2)
as satisfied if the non-employee’s cash
tips are included in the total amounts
reported as other income on the Form
1099-MISC, nonemployee compensation
on the Form 1099-NEC, or payment card/
third-party network transactions on the
Form 1099-K furnished to the non-em-
ployee, and (2) calculate the amount of
qualified tips (subject to the other lim-
itations and requirements for qualified
tips under section 224) using earnings
statements or other documentation such
as receipts, point-of-sale system reports,
daily tip logs, third party settlement
organization records, or other documen-
tary evidence that corroborates the cal-
culation of the total amount of tips that
are qualified tips for tax year 2025. For
example, if a payor issues an earnings
statement to contractors who provide
services to the payor, the contractor may
use the amount designated as tips by the
payor on the earnings statement in deter-
mining the amount of qualified tips, pro-
vided the other limitations and require-
ments for qualified tips are satisfied, and
provided the contractor maintains a copy
of the earnings statement in accordance
with IRS recordkeeping requirements.
14

Non-employee payees may also consult
with the payor regarding any available
information that may assist in determin-
ing and documenting the amount of qual-
ified tips.
Although the occupation of a non-em-
ployee payee receiving tips will not
appear on a 2025 Form 1099 furnished
to the non-employee payee, the payee is
still responsible for determining whether
the tips received by the payee were
received in an occupation that custom-
arily and regularly received tips on or
before December 31, 2024, as provided
by the Secretary
As with employees receiving tips, the
Treasury Department and the IRS recog-
nize that most non-employees receiving
tips are determining their eligibility for
the deduction for the first time. Simi-
larly, the Treasury Department and the
IRS understand that it may be difficult
for these non-employees to determine
whether their tips were received in con-
nection with a specified service trade or
business and that additional guidance is
needed to assist non-employees in making
that determination. Accordingly, the tran-
sition relief described above with regard
to whether employee tips were received in
connection with a specified service trade
or business will also apply to non-employ-
ees.
3. Examples
The following examples are intended
to assist taxpayers in determining the
amount of qualified tips under section
224(d) and do not address other limita-
tions on the deduction allowed under
section 224(a), including the overall limit
on deductions in section 224(b)(1), the
MAGI limit in section 224(b)(2), and
the social security number requirement
in section 224(e). See 2025 Form 1040
instructions for more details on how to
apply these limitations. In each example,
unless otherwise indicated, assume that
(1) the individual’s occupation is one that
customarily and regularly received tips
on or before December 31, 2024, and (2)
all other requirements for claiming the
deduction are satisfied.
Example 1. Employee A is a restaurant
server. The amount reported in A’s Form
W-2 box 7 is $18,000 of social security
tips. A did not report any additional tips on
Form 4137. A may use $18,000 in deter-
mining the amount of qualified tips for tax
year 2025.
Example 2. Employee B is a bartender.
During tax year 2025, B reports $20,000
in tips to B’s employer on Form 4070.
B’s 2025 Form W-2 reports $200,000 in
box 1, an amount in excess of the social
security wage base, and $15,000 in box
7. Additionally, B reports $4,000 of unre-
ported tips on Form 4137, line 4, and
includes this amount in income on B’s
Form 1040. B may use either the $15,000
in box 7 of the Form W-2, or the $20,000
of tips reported to B’s employer on Forms
4070 in determining the amount of qual-
ified tips for tax year 2025. Regardless
of the option chosen, B may also include
the $4,000 of unreported tips from Form
4137, line 4, in determining the amount of
qualified tips.
Example 3. Individual D is a self-em-
ployed travel guide who operates as a
sole proprietor. In 2025, Individual D
receives $7,000 in tips from custom-
ers paid through a third-party settle-
ment organization as defined in section
6050W(b)(3). For tax year 2025, Individ-
ual D receives a Form 1099-K from an
online booking platform that is a third-
party settlement organization as defined
in section 6050W(b)(3) showing $55,000
of total payments. The Form 1099-K does
not separately identify the tips. How-
ever, Individual D keeps a log of each
14
See id.

Bulletin No. 2025–50 771 December 8, 2025
tour that shows the date, customer, and
tip amount received. Because Individual
D has daily tip logs substantiating the
$7,000 tip amount, D may use the $7,000
tip amount in determining qualified tips
for tax year 2025.
B. Qualified Overtime Compensation
1. Determining whether an individual is
covered and nonexempt
Section 225(c) of the Code limits qual-
ified overtime compensation to overtime
compensation in excess of the individual’s
regular rate that is required and paid under
29 USC § 207. In order for overtime to
be required under 29 USC § 207, it must,
among other requirements, be paid to an
individual who is both covered by and
not exempt from the FLSA (an FLSA-el-
igible employee).
15
Thus, an individual
who is ineligible for Federal overtime (an
FLSA-ineligible employee) will gener-
ally not be paid overtime. However, some
FLSA-ineligible employees are eligible
for overtime under State law or are paid
premium rates for certain work for other
reasons. Overtime compensation paid to
FLSA-ineligible employees is not qual-
ified overtime compensation within the
meaning of section 225(c) with respect to
such employment, regardless of applica-
ble State law provisions or other circum-
stances causing these amounts to be paid.
Because employers and other payors
will not be required to separately account
for qualified overtime compensation, a
separate accounting of qualified overtime
compensation will not appear on written
statements furnished to individuals for
tax year 2025 absent an entry in box 14
of Form W-2 or a separate statement con-
taining that information. Consequently,
individuals who are not furnished a sep-
arate accounting of qualified overtime
compensation in box 14 of Form W-2 (or
on a separate statement) must make a rea-
sonable effort to determine whether they
are considered FLSA-eligible employees,
which may include asking their employers
or other service recipients about their sta-
tus under the FLSA.
2. Determining the amount of qualified
overtime compensation
Under section 225(a), an individual
may deduct an amount equal to the qual-
ified overtime compensation received
during the taxable year and included on
a statement furnished to the individual
(a Form W-2, Form 1099-NEC, or Form
1099-MISC). Under section 6051(a)(19),
employers must include on the Form W-2
the total amount of qualified overtime
compensation. Similarly, under section
6041(d)(4), payors must include on the
applicable Form 1099 the portion of pay-
ments that are qualified overtime com-
pensation. For tax year 2025, a separate
accounting of qualified overtime com-
pensation may not appear on the written
statement furnished to the individual.
Some employers may choose to report
the amount of qualified overtime com-
pensation to employees using box 14 of
Form W-2 or on a separate statement, in
which case employees may treat the sep-
arate accounting requirement as satisfied
for purposes of their eligibility for the
deduction and use this amount for pur-
poses of determining the deduction under
section 225. If the amount of qualified
overtime compensation is not provided by
the employer in box 14 of the Form W-2
or on a separate statement, the Treasury
Department and the IRS have determined
that, for tax year 2025, an FLSA-eligi-
ble employee may (1) treat the separate
accounting requirement as satisfied if the
qualified overtime compensation is prop-
erly reported on the individual’s Form
W-2, Form 1099-NEC, or From 1099-
MISC, without regard to the requirements
of section 6051(a)(19) (to separately
account for the amount of qualified over-
time compensation), copies of which are
furnished to the individual, and (2) base
the determination of the amount of qual-
ified overtime compensation (subject to
the other limitations and requirements for
qualified overtime compensation in sec-
tion 225 of the Code) on other documen-
tation such as earnings or pay statements,
invoices, or similar statements that sup-
port the determination, using a reasonable
method described below to determine the
amount of the qualified overtime com-
pensation. Individuals who had multiple
employers during 2025 may use different
methods for each employer.
Individuals may use any of the follow-
ing reasonable methods for purposes of
determining the amount of qualified over-
time compensation under section 225(c)
for tax year 2025:
(A) If the individual is paid overtime
compensation at a rate of one and one-
half times the individual’s regular rate for
hours worked in excess of 40 hours in a
workweek, as generally required by 29
USC § 207(a), and receives a statement
covering the entire 2025 tax year that sepa-
rately accounts for the overtime premium,
which is generally, the “half” portion of
the “one and one-half times” amount (the
FLSA Overtime Premium), the individual
may use that separate amount. See exam-
ple 1.
(B) If the individual is paid overtime
compensation at a rate of one and one-
half times the individual’s regular rate for
hours worked in excess of 40 hours in a
workweek, as generally required by 29
USC § 207(a), and receives a statement
covering the entire 2025 tax year that does
not separately account for the FLSA Over-
time Premium, but does include an entry
showing the aggregate dollar amount of
the FLSA Overtime Premium combined
with the portion of the individual’s regular
wages for the hours worked over 40 in a
workweek, the individual may use one-
third of that aggregate dollar amount. See
example 2.
(C) If the individual is paid overtime
compensation at a rate in excess of one
and one-half times the individual’s regular
rate for hours worked in excess of 40 hours
in a workweek, as generally required by
29 USC § 207(a) (for example, two times
the individual’s regular rate), and receives
a statement covering the entire 2025 tax
year that separately accounts for the por-
tion in excess of the employee’s regular
rate, the individual may multiply that
separate amount by an appropriate frac-
tion to approximate the FLSA Overtime
Premium (for example, if overtime is paid
15
For more information on coverage and exemption under the FLSA, see WHD Fact Sheets | U.S. Department of Labor, https://www.dol.gov/agencies/whd/fact-sheets (last visited Oct. 28,
2025).

December 8, 2025 772 Bulletin No. 2025–50
at a rate of two times the regular rate, the
appropriate fraction is one-half) and use
the product. See example 3.
(D) If the individual is paid overtime
compensation at a rate in excess of one and
one-half times the individual’s regular rate
for hours worked in excess of 40 hours in
a workweek, as generally required by 29
USC § 207(a) (for example, two times the
individual’s regular rate), and receives a
statement that does not separately account
for the FLSA Overtime Premium but does
include an entry showing the aggregate
dollar amount of overtime compensation
at that higher rate for the hours worked
over 40 hours combined with the portion
of the individual’s regular wages for the
hours worked over 40 in a workweek cov-
ering the entire 2025 tax year, then the
individual may multiply the aggregate
dollar amount by an appropriately smaller
fraction (for example, if overtime is paid
at a rate of two times the regular rate, the
appropriate fraction is one-fourth) and use
the product. See example 4.
(E) If the method for determining the
amount of qualified overtime compen-
sation described in paragraph (B) or (D)
above would result in underestimating the
employee’s qualified overtime compensa-
tion (for example, because the individual’s
regular rate is increased by a nondiscre-
tionary bonus), the individual may adjust
the method described in paragraph (B) or
(D) to take the difference into account.
(F) If the individual is paid overtime
compensation at a rate described in
paragraphs (A)-(E) above but does not
receive any statement covering the entire
2025 tax year separately accounting for
the FLSA Overtime Premium, the aggre-
gate dollar amount of FLSA overtime, or
the aggregate dollar amount of overtime
compensation paid at a higher rate, the
individual may use a reasonable method
that takes into account (1) the regular
rate under 29 USC § 207(e) paid to the
individual by the employer (or a reason-
able approximation of this amount), and
(2) the individual’s hours of service in
excess of 40 hours in a workweek (or a
reasonable approximation if the individ-
ual does not have records of actual hours
of service) for purposes of determining
the amount of qualified overtime com-
pensation under section 225(c). A reason-
able method includes requesting infor-
mation from the individual’s employer
and using the information provided by
the employer for purposes of calculating
the deduction.
16
(G) If an individual’s employer sat-
isfies the requirements under 29 USC
§ 207 by operation of another subsection
of the FLSA other than 29 USC § 207(a)
(including but not limited to public sec-
tor employees in fire protection and
law enforcement (29 USC § 207(k))
17
,
employees of a political subdivision
of a State or an interstate governmen-
tal agency who receives compensatory
time off in certain circumstances in lieu
of cash overtime compensation (29 USC
§ 207(o))
18
, and employees of hospitals or
certain residential care facilities (29 USC
§ 207(j)),
19
the individual must compute
the amount of overtime compensation
by operation of the different overtime
rules used in the relevant provision of
29 USC § 207 that apply to the individ-
ual and may use any reasonable method
contained in this notice that takes those
alternative overtime rules into account.
See examples 5 and 6.
The Treasury Department and the IRS
are aware that documents such as earn-
ings statements and pay stubs take a vari-
ety of forms, and employers and other
service-recipients provide overtime com-
pensation in a variety of ways (including,
for example, combining State-required
and FLSA-required overtime). Individ-
uals may use the amounts reported as
overtime compensation on earnings state-
ments, pay stubs, and other documenta-
tion provided by payors to calculate the
FLSA Overtime Premium for 2025. For
example, individuals may approximate
the amounts of FLSA Overtime Premium
by using overtime amounts reported on
a pay statement or similar document that
covers all wages paid in 2025. See Exam-
ple 1. In all cases, individuals must main-
tain copies of any documents they rely
on in accordance with IRS recordkeeping
requirements.
20

3. Examples
The following examples illustrate how
an individual may determine the amount
of qualified overtime compensation that
may be allowed as an income tax deduc-
tion under section 225 of the Code for tax
year 2025 and are not intended to address
the full universe of situations in which
overtime payments may be required
under the FLSA. These examples are
intended to assist a taxpayer in deter-
mining the amount of qualified overtime
under section 225(c) and do not address
other limitations on the deduction
allowed under section 225(a), including
the overall limit on deductions in sec-
tion 224(b)(1), the MAGI limit in section
225(b)(2), and the social security number
requirement in section 225(d). See 2025
Form 1040 instructions for more details
on how to apply these limitations. The
examples assume: (1) each individual is
furnished a Form W-2 without a discrete
entry reporting qualified overtime in box
14 or on a separate statement; (2) each
individual is an FLSA-eligible employee;
and (3) all other requirements for claim-
ing the deduction are satisfied.
Example 1. Individual A has access
to a payroll system that shows totals of
16
See Fact Sheet #21: Recordkeeping Requirements under the Fair Labor Standards Act (FLSA) | U.S. Department of Labor, https://www.dol.gov/agencies/whd/fact-sheets/21-flsa-record-
keeping (last visited Oct. 28, 2025) regarding employer’s recordkeeping requirements.
17
See Fact Sheet #8: Law Enforcement and Fire Protection Employees Under the Fair Labor Standards Act (FLSA) | U.S. Department of Labor, https://www.dol.gov/agencies/whd/
fact-sheets/8-flsa-police-firefighters (last visited Oct. 28, 2025).
18
Amounts described in 29 USC § 207(o) must be properly included on the employee’s Form W-2 to be considered qualified overtime compensation. Accordingly, individuals receiving
compensatory time under 29 USC § 207(o)(3)(B) in satisfaction of overtime amounts due under 29 USC § 207 may take the overtime amount into account for purposes of section 225 only
in the year the compensatory time is paid.
19
See Fact Sheet #33: Residential Care Facilities (Group Homes) Under the Fair Labor Standards Act | U.S. Department of Labor, https://www.dol.gov/agencies/whd/fact-sheets/33-flsa-
group-homes (last visited Oct. 28, 2025).
20
Taxpayers claiming the deduction under section 225 on their tax return must demonstrate they meet the requirements of section 225 and establish that they are entitled to the deduction as
well as determine the appropriate amount of the deduction. See also § 6001; Treas. Reg. § 1.6001-1; see generally Publication 17, pp. 17-18.

Bulletin No. 2025–50 773 December 8, 2025
amounts paid to Individual A in 2025,
including the FLSA Overtime Premium
paid during 2025. In 2025, Individual
A is last paid wages on December 22,
2025, for the payroll period beginning
on November 30, 2025, and ending on
December 13, 2025.
21
The payroll system
shows $5,000 as the “overtime premium”
that Individual A was paid during 2025.
For purposes of determining the amount
of qualified overtime compensation
received in tax year 2025, Individual A
may include $5,000 (the FLSA Overtime
Premium).
Example 2. Assume the same facts
as in example 1 except that Individual
A’s pay stub, shows a total “overtime”
amount of $15,000 (which is the FLSA
Overtime Premium combined with the
portion of the individual’s regular wages
for the hours worked over 40 in a work-
week). For purposes of determining the
amount of qualified overtime compensa-
tion received in tax year 2025, the indi-
vidual may include $5,000 (the FLSA
Overtime Premium, computed by divid-
ing $15,000 by 3).
Example 3. Individual B’s employer
has a practice of paying overtime at a
rate of two times an employee’s reg-
ular rate of pay and Individual B was
paid $20,000 in overtime pay under that
practice, although 29 USC § 207 only
requires Individual B’s employer to pay
at one and one-half times the employee’s
regular rate. Individual B’s last pay stub
for 2025 shows “overtime premium” of
$10,000 paid in 2025 (which is Individ-
ual B’s overtime premium paid at a rate
of two times the individual’s regular
rate). For purposes of determining the
amount of qualified overtime compensa-
tion received in tax year 2025, Individual
B may include $5,000 ($10,000 divided
by 2).
Example 4. Assume the same facts as
in example 3 except that Individual B’s
pay stub shows a total “overtime” amount
of $20,000 (which is Individual B’s over-
time premium paid at a rate of two times
the individual’s regular rate of pay com-
bined with the portion of the individual’s
regular wages for the hours worked over
40 in a workweek). For purposes of deter-
mining the amount of qualified overtime
compensation received in tax year 2025,
Individual B may include $5,000 (the
FLSA Overtime Premium, computed by
dividing $20,000 by 4).
Example 5. Individual C works in law
enforcement and is paid $15,000 of total
annual overtime pay on a “work period”
basis of 14 days that complies with sec-
tion 207(k) of the FLSA.
22
For purposes of
determining the amount of qualified over-
time compensation received in tax year
2025, Individual C may include $5,000
($15,000 divided by 3).
Example 6. Individual D works for
a State or local government agency that
gives compensatory time at a rate of one
and one-half hours for each overtime hour
worked under 29 USC 207(o). In 2025,
Individual D was paid wages of $4,500
with respect to compensatory time off
taken in accordance with section 207(o).
For purposes of determining the amount
of qualified overtime compensation
received in tax year 2025, Individual D
may include $1,500, one-third of these
wages for purposes of determining quali-
fied overtime compensation under section
225(c).
IV. Paperwork Reduction Act
The Paperwork Reduction Act of 1995
(44 USC 3501-3520) (PRA) generally
requires that a Federal agency obtain the
approval of the Office of Management and
Budget (OMB) before collecting infor-
mation from the public, whether such
collection of information is mandatory,
voluntary, or required to obtain or retain
a benefit. An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a valid control number
assigned by the Office of Management
and Budget.
This Notice mentions collection
requirements for taxpayers to keep records
to substantiate their tax deductions for
tax year 2025. These records are consid-
ered general tax records under 26 CFR
6001-1. General tax records are already
approved by OMB under 1545-0074.
Additionally, taxpayers report the deduc-
tions using Form 1040, which is already
approved by OMB under 1545-0074.
This Notice is not changing the already
approved OMB collection.
The Notice mentions new information
collection requirements for various forms
in tax year 2026. These collections will
be submitted for OMB approval when the
forms and their instructions are updated
for tax year 2026.
V. APPLICABILITY DATE
This notice applies to the 2025 tax year.
VI. DRAFTING INFORMATION
The principal author of this notice is
the Office of Associate Chief Counsel
(Employee Benefits, Exempt Organiza-
tions, and Employment Taxes). For fur-
ther information regarding this notice,
call (202) 317-6000 (not a toll-free num-
ber).
Request for Comments
on Individual Tax Credit
for Qualified Contributions
to Scholarship Granting
Organizations
Notice 2025-70
SECTION 1. PURPOSE
The Department of the Treasury
(Treasury Department) and the Internal
Revenue Service (IRS) intend to issue
proposed regulations (forthcoming pro-
posed regulations) to implement new
§ 25F of the Internal Revenue Code
21
The employee’s earning statement relating to the payroll period beginning on December 14, 2025, and ending on December 27, 2025, shows amounts that are not actually paid until January
6, 2026. Thus, it would not include any FLSA Overtime Premium paid in 2025.
22
See Fact Sheet #8: Law Enforcement and Fire Protection Employees Under the Fair Labor Standards Act (FLSA) | U.S. Department of Labor, https://www.dol.gov/agencies/whd/
fact-sheets/8-flsa-police-firefighters (last visited Oct. 28, 2025).

December 8, 2025 774 Bulletin No. 2025–50
(Code),
1
as added by § 70411 of Pub-
lic Law 119-21, 139 Stat. 72 (July 4,
2025), commonly known as the One,
Big, Beautiful Bill Act (OBBBA). Sec-
tion 25F provides a new credit for an
individual’s qualified contribution to
a scholarship granting organization
(as defined in § 25F(c)(5)) (SGO) that
provides qualified elementary and sec-
ondary scholarships. In anticipation of
issuing the forthcoming proposed reg-
ulations, this notice requests comments
regarding issues arising under § 25F
that should be addressed in guidance,
emphasizing issues on which guid-
ance is most quickly needed, including
issues relating to the annual certifica-
tion by a State
2
and SGO requirements.
Comments detailing factual situations
that differ from those addressed in this
notice, and the application of the stat-
ute to these factual situations, would be
especially helpful in the development of
the forthcoming proposed regulations.
SECTION 2. BACKGROUND
.01 Overview of § 25F Credit. Section
25F provides a nonrefundable income tax
credit (§ 25F credit) allowable to a tax-
payer for qualified contributions to SGOs
made by an individual who is a citizen or
resident of the United States (within the
meaning of § 7701(a)(9)). Section 25F(c)
(3) defines a “qualified contribution” as a
charitable contribution of cash to an SGO
that uses the contribution to fund schol-
arships for eligible students (as defined
in § 25F(c)(2)) solely within the State in
which the organization is listed pursuant
to § 25F(g). In order for a contribution
made by a taxpayer to an SGO in a State
to be a qualified contribution eligible for
a § 25F credit, the State must have volun-
tarily elected to participate under § 25F and
must have identified the SGO as one that
satisfies the requirements of § 25F(c)(5) for
the applicable calendar year in accordance
with § 25F(g). See sections 2.04 and 3 of
this notice regarding State lists and certifi-
cations necessary for State elections.
.02 Amount of § 25F Credit. Section
25F(a) provides that, in the case of an
individual who is a citizen or resident of
the United States (within the meaning of
§ 7701(a)(9)), there is allowed as a credit
against the tax imposed by chapter 1 of
the Code for the taxable year an amount
equal to the aggregate amount of quali-
fied contributions made by the taxpayer
during the taxable year. The amount of
the § 25F credit allowable to a taxpayer
for a taxable year is subject to two limita-
tions in § 25F(b). First, § 25F(b)(1) pro-
vides that the amount of the § 25F credit
allowed to any taxpayer for any taxable
year may not exceed $1,700. Second,
§ 25F(b)(2) provides that the amount
allowed as a § 25F credit for a taxable
year is reduced by the amount allowed
as a credit on any State tax return of the
taxpayer for qualified contributions made
by the taxpayer during the taxable year.
In addition, § 25F(e) prohibits a double
benefit to a taxpayer by providing that
any qualified contribution for which a
§ 25F credit is allowed cannot be taken
into account as a charitable contribution
for purposes of § 170.
Section 25F(f) provides for the carry-
forward of unused § 25F credit amounts.
Section 25F(f)(1) provides that, if the
§ 25F credit allowable for any taxable year
exceeds the limitation imposed by § 26(a)
for such taxable year reduced by the sum
of the credits allowable under §§ 21, 22,
24, 25, 25A, 25B, 25C, 25E, and 26, such
excess is carried to the succeeding tax-
able year and added to the credit allow-
able under § 25F(a) for such taxable year.
In addition, § 25F(f)(2) provides that
no credit may be carried forward under
§ 25F(f) to any taxable year following the
fifth taxable year after the taxable year in
which the credit arose. For this purpose,
§ 25F(f) provides that § 25F credits are
treated as used on a first-in, first-out basis.
.03 SGO Requirements.
(1) Section 25F(c)(5). An organization
can qualify as an SGO only if it satisfies
each requirement set forth in § 25F(c)(5).
The SGO requirements under § 25F(c)(5)
are that the organization must:
(a) be described in § 501(c)(3), be
exempt from tax under § 501(a), and not
be a private foundation;
(b) prevent the co-mingling of quali-
fied contributions with other amounts by
maintaining one or more separate accounts
exclusively for qualified contributions;
(c) satisfy each of the requirements of
§ 25F(d); and
(d) be included on the list submitted
for the applicable covered State under
§ 25F(g) for the applicable year. For this
purpose, § 25F(c)(1) defines a “covered
State” as “one of the States, or the District
of Columbia,” that, for a calendar year,
voluntarily elects to participate under
§ 25F and to identify the SGOs located in
the State, in accordance with § 25F(g).
(2) Section 25F(d). The requirements
in § 25F(d) that an SGO must satisfy are
as follows:
(a) The organization must provide
scholarships to 10 or more students who
do not all attend the same school.
(b) The organization cannot spend less
than 90 percent of its income on scholar-
ships for eligible students.
(c) The organization cannot provide
scholarships for any expenses other than
qualified elementary or secondary educa-
tion expenses. Section 25F(c)(4) defines
a qualified elementary or secondary edu-
cation expense as any expense described
in § 530(b)(3)(A) (relating to Coverdell
education savings accounts) of an eligible
student. Section 530(b)(3)(A) identifies
these expenses to include certain expenses
incurred at, required by, or provided by a
public, private, or religious school.
(d) The organization must provide
scholarships to eligible students with a
priority for:
(i) students awarded a scholarship the
previous school year, and thereafter, and
(ii) any eligible students who have a
sibling who was awarded a scholarship
from such organization.
(e) The organization cannot earmark or
set aside contributions for scholarships on
behalf of any particular student.
(f) The organization must:
(i) verify the annual household income
and family size of eligible students who
apply for scholarships to ensure such stu-
dents meet the area median gross income
requirement of § 25F(c)(2)(A), and
1
Unless otherwise provided, all "section" or "§" references are to sections of the Code.
2
Pursuant to § 25F(c)(1), for purposes of this notice, the term “State” means one of the 50 States or the District of Columbia.

Bulletin No. 2025–50 775 December 8, 2025
(ii) limit the awarding of scholarships
to eligible students who are members of
a household for which the income does
not exceed the amount established under
§ 25F(c)(2)(A).
(g) The organization cannot award a
scholarship to any disqualified person,
which § 25F(d)(2)(B) provides is deter-
mined pursuant to rules similar to the rules
of § 4946 (relating to private foundations).
.04 State lists and certifications. Sec-
tion 25F(g) provides that:
(1) Not later than January 1 of each
calendar year (or, with respect to the 2027
calendar year, as early as practicable), a
State that voluntarily elects to participate
under § 25F must provide to the Secretary
of the Treasury or the Secretary’s delegate
(Secretary) a list of the SGOs that meet
the requirements described in § 25F(c)(5)
and are located in the State (State list).
(2) The election under § 25F(g) must
be made by the Governor of the State or
by such other individual, agency, or entity
as is designated under State law to make
such elections on behalf of the State with
respect to Federal tax benefits.
(3) Each State list must include a cer-
tification that the individual, agency, or
entity submitting such list on behalf of
the State has the authority to perform this
function.
.05 Regulations and guidance. Section
25F(h) directs the Secretary to issue such
regulations or other guidance as the Secre-
tary determines necessary to carry out the
purposes of § 25F, including regulations
or other guidance:
(1) providing for enforcement of the
requirements under § 25F(d) and (g), and
(2) with respect to recordkeeping or
information reporting for purposes of
administering the requirements of § 25F.
SECTION 3. REQUEST FOR
COMMENTS ON STATE LISTS AND
CERTIFICATIONS
.01 Overview. Sections 3.02 and 3.03
of this notice describe the certification
process currently envisioned by the Trea-
sury Department and the IRS for covered
States to elect to participate under § 25F
in accordance with § 25F(g). The Treasury
Department and the IRS request comments
on all aspects of this certification process.
Sections 3.04 through 3.06 of this notice
set forth specific questions regarding par-
ticular aspects of the State certification
process on which the Treasury Depart-
ment and the IRS request comments.
.02 State election and list. Section
25F(g) provides that a State that volun-
tarily elects to participate under § 25F must
provide to the Secretary a list of the SGOs
that meet the requirements described in
§ 25F(c)(5) and are located in the State.
Thus, the election by a State to partici-
pate under § 25F (State election) may be
made prior to or contemporaneously with
the submission of the State’s list of those
organizations. The Treasury Department
and the IRS anticipate that the forthcom-
ing proposed regulations would require
each State electing to participate under
§ 25F for the 2027 calendar year to sub-
mit to the IRS, by a specified date before
January 1, 2027, the State’s list of organi-
zations located in that State meeting the
requirements of § 25F(c)(5) for the 2027
calendar year along with the State’s certi-
fication under § 25F(g)(2). The forthcom-
ing proposed regulations would include
a similar requirement for submission of
an annual list and certification from each
electing State for subsequent years.
However, the Treasury Department and
the IRS understand that potential SGOs
may need sufficient time to prepare for the
commencement of this new credit in 2027
and assurance that the State in which they
are located will elect to participate under
§ 25F. Accordingly, the Treasury Depart-
ment and the IRS intend to issue future
published guidance providing States with
the option to submit, beginning early
in 2026, the State election to participate
under § 25F for calendar year 2027.
The Treasury Department and the IRS
anticipate that the forthcoming proposed
regulations would require the State to
electronically submit the State election,
the State list and certification to the IRS,
as an electronic submission is more effi-
cient and timelier than paper submissions.
The Treasury Department and the IRS
anticipate that the forthcoming proposed
regulations would provide, consistent with
§ 25F(g)(1)(A), that the State list must
include all organizations located in the
State that have requested to be designated
as an SGO and that meet the § 25F(c)
(5) statutory requirements. However, the
Treasury Department and the IRS do not
anticipate that the forthcoming proposed
regulations would prohibit an SGO from
itself imposing additional governing pro-
visions beyond the requirements imposed
by § 25F(c)(5) unless such a provision
would conflict with the ability of the SGO
to satisfy such requirements.
The Treasury Department and the IRS
anticipate that the forthcoming proposed
regulations would provide that, if a donor
makes a contribution to an organization
that, at the time of the contribution, is on
the list of organizations for that taxable
year, the donor would generally be treated
as having made a contribution to an SGO
for purposes of § 25F. However, if the
recipient organization is later determined
not to qualify as an SGO, the IRS would
not be precluded from disallowing a § 25F
credit for any contribution made to that
organization if the donor either was aware
of, or was responsible to any extent for,
the activities or deficiencies that gave rise
to the organization’s eventual loss of SGO
status.
.03 Contents of State certification.
The Treasury Department and the IRS
interpret § 25F(g) as requiring each
covered State to verify that each orga-
nization on the State’s list satisfies all
of the requirements of § 25F(c)(5). The
Treasury Department and the IRS also
understand that organizations seeking to
satisfy the requirements to be an SGO
for purposes of § 25F may be structured
and/or operated in different ways. Specif-
ically, some organizations may operate
entirely within a single State, and some
may raise funds and award scholarships
to eligible students in a region consisting
of multiple States. The forthcoming pro-
posed regulations would require covered
States to verify information about each of
these types of organizations that qualify
as an SGO. Reliance by a covered State
on self-certifications by SGOs would not
be sufficient for this purpose. The Trea-
sury Department and the IRS anticipate
that the annual certification of the State’s
list that would be required of each cov-
ered State would include certification by
the individual who, or an authorized rep-
resentative of the agency or entity that,
has authority to perform this function on
behalf of the State, under penalties of
perjury, of at least the following informa-
tion:

December 8, 2025 776 Bulletin No. 2025–50
(1) Identification and contact informa-
tion: The name, IRS employer identifica-
tion number (EIN), address, and telephone
number of each organization on the State
list; the name, title and contact informa-
tion of the covered State’s point of contact
for this credit; and the identification of
each organization as a State or multistate
organization.
(2) Federal tax-exempt status: That
each organization on the State list is cur-
rently described in § 501(c)(3) and exempt
from tax pursuant to § 501(a), and is not a
private foundation, as defined in § 509.
(3) No co-mingling: That each orga-
nization on the State list maintains one
or more separate accounts exclusively
for qualified contributions, as that term
is defined in § 25F(c)(3), to prevent the
co-mingling of qualified contributions
with other amounts.
(4) Information regarding single-State
organizations: If the organization is
located solely in one State (single-State
organization), then, in accordance with
§ 25F and any regulations thereunder,
certification that the single-State organi-
zation:
(a) Provides scholarships to ten (10) or
more students in that State who do not all
attend the same school;
(b) Spends not less than ninety (90)
percent of its income on scholarships for
eligible students, as that term is defined in
§ 25F(c)(2);
(c) Does not provide scholarships for
any expenses other than qualified elemen-
tary or secondary education expenses, as
that term is defined in § 25F(c)(4);
(d) Selects students receiving scholar-
ships only from among eligible students
who reside in that State, and only from
among eligible students who are members
of a household for which the income does
not exceed the amount established under
§ 25F(c)(2)(A), and by giving priority first
to those who received a scholarship from
the organization for the previous school
year, and then those who have a sibling
who received a scholarship from the orga-
nization for the previous school year;
(e) Does not earmark or set aside con-
tributions for scholarships on behalf of
any particular student; and
(f) Does not award a scholarship to any
disqualified person, as defined for pur-
poses of § 25F(d)(2).
(5) Information regarding multistate
organizations: If the organization is not
solely located in one State and grants
scholarships in more than one State (mul-
tistate organization), then certification that
the multistate organization:
(a) Funds scholarships to eligible stu-
dents in the State providing the certifica-
tion;
(b) Requires donors to designate the
State, on whose State list the organization
is named, in which their qualified contri-
bution is to be used;
(c) Tracks and matches qualifying con-
tributions that are designated by the donor
to be spent within the State with scholar-
ships to eligible students within the State;
and
(d) Satisfies each of the requirements
for single-State organizations in the State,
as set forth in section 3.03(4) of this notice.
(6) State policies and procedures: That
the State has adopted, and is complying
with, policies and procedures designed to
enable the State to make its own indepen-
dent determination that each organization
on the State list is required by the organiza-
tion’s organizational documents or bylaws
to satisfy, and is operating in a manner
that satisfies, each of the requirements of
§ 25F(c)(5), as provided in section 2.03
of this Notice. With respect to a State’s
independent determination that an orga-
nization is described in § 501(c)(3) and
exempt from tax under § 501(a), and is not
a private foundation, policies and proce-
dures that include, for example, consider-
ation of whether the organization is identi-
fied as an exempt organization with 501(c)
(3) status (and not a private foundation) in
the EO BMF Extract available on irs.gov
(https://www.irs.gov/charities-non-prof-
its/exempt-organizations-business-mas-
ter-file-extract-eo-bmf) would be suffi-
cient for purposes of § 25F(c)(5)(A).
(7) Notification to the IRS of removal
from State list: That the State will
promptly notify the IRS of any determina-
tion by the State that an organization listed
on its State list is being removed from its
State list and the effective date of removal.
(8) Applicable State tax credits: If
applicable, that, for the calendar year for
which the State list is submitted to the
IRS, the State offers a tax credit for qual-
ified contributions pursuant to State law,
and a description of that credit including
relevant State statutes, regulations, and
other authoritative guidance.
(9) Authority to act on behalf of State:
That the individual, agency, or entity sub-
mitting the election, the list, and these cer-
tifications on behalf of the State has the
authority to perform this function.
.04 Request for comments on State
policies and procedures. Section 25F(g)
requires that a State that voluntarily elects
to participate under § 25F must provide to
the Secretary a list of the SGOs “that meet
the requirements” described in § 25F(c)
(5) and are located in the State. The Trea-
sury Department and the IRS anticipate
that States will be required to have imple-
mented, and to comply with, various pro-
cedures to verify that the required infor-
mation submitted by the covered State is
accurate and complete.
(1) What types of uniform policies,
procedures, recordkeeping or other
requirements would be reasonable to help
ensure that a State will be able to reliably
verify that each SGO meets each of the
requirements in § 25F(c)(5)?
(2) For States already participating
in State-level programs similar to § 25F,
how do those States determine that orga-
nizations are meeting the applicable State
requirements?
.05 Request for comments on “located
in the State.” Section 25F(g)(1)(A)
requires the State list to identify the SGOs
that meet the requirements described in
§ 25F(c)(5) and are “located in the State.”
(1) How should “located” be defined
for this purpose? Should organizations
that are authorized to operate in the State
be considered located in the State?
(2) For States that currently offer tax
credits for contributions to scholarship
awarding entities, are there jurisdictional
or other similar nexus requirements that
an organization must satisfy in order for
contributions to the organization to qual-
ify for the State tax credit?
.06 Request for comments on State tax
credit offset. Section 25F(b)(2) requires
that the amount of a § 25F credit allowed
under § 25F must be reduced by the amount
allowed as a State tax credit for qualified
contributions made by the taxpayer during
the taxable year. What information can a
State provide to the IRS, consistent with
applicable State law, to ensure taxpayer
compliance with this requirement?

Bulletin No. 2025–50 777 December 8, 2025
SECTION 4. REQUEST FOR
COMMENTS REGARDING SGO
REQUIREMENTS
.01 Request for comments regarding
income. Section 25F(d)(1)(B) requires an
SGO to spend “not less than 90 percent of
the income of the organization on scholar-
ships for eligible students.” The Treasury
Department and the IRS anticipate that the
forthcoming proposed regulations would
provide that the income of the organiza-
tion includes all income of the organiza-
tion, including unrelated business income,
and is not limited to qualified contribu-
tions segregated in the separate account(s)
described in § 25F(c)(5)(B).
(1) Does this interpretation of income
pose practical challenges for SGOs? If so,
what alternative interpretation would be
allowed under the statute, and why would
any alternative interpretation be a superior
reading of the statute?
(2) Should forthcoming proposed reg-
ulations address potential fluctuations in
income and expenses, such as potential
start-up costs to the organization in its
first year of operation or the smoothing of
this calculation over a certain number of
years?
.02 Request for comments on multistate
organizations. The Treasury Department
and the IRS are aware that organizations
may fundraise and award scholarships in
more than one State (see section 3.03(5)
of this notice). However, § 25F(c)(3)
requires that a qualifying contribution
must be used to fund scholarships for eli-
gible students “solely within the State in
which the organization is listed.”
(1) As noted above, the Treasury
Department and the IRS anticipate that the
forthcoming proposed regulations would
require a multistate organization to ask
donors to designate the State in which the
donor intends the qualified contribution to
be used. If a donor does not designate a
particular State, what rules should apply?
(2) For a multistate organization,
should the requirement that it provide
scholarships to 10 or more students who
do not all attend the same school apply
with respect to scholarships provided by
the organization in all states in the aggre-
gate or on a state-by-state basis?
(3) For a multistate organization,
should the requirement that it spend not
less than 90 percent of its income on
scholarships for eligible students apply
with respect to the organization’s opera-
tions in all states in the aggregate or on
a state-by-state basis? If the latter, how
should the organization’s income be allo-
cated for this purpose?
(4) For a multistate organization,
should satisfaction of the following
requirements be analyzed with respect to
all states on whose State list it appears, or
on a state-by-state basis:
(a) does not provide scholarships for
any expenses other than qualified elemen-
tary or secondary education expenses,
(b) provides a scholarship to eligi-
ble students with a priority for students
awarded a scholarship the previous school
year, and then for any eligible students
who have a sibling who was awarded a
scholarship from such organization,
(c) does not earmark or set aside contri-
butions for scholarships on behalf of any
particular student,
(d) verifies the annual household
income and family size of eligible stu-
dents who apply for scholarships to ensure
the annual household income of such stu-
dents does not exceed 300 percent of area
median gross income (as such term is
used in § 42), and limits the awarding of
scholarships to eligible students who are
a member of a household whose income
does not exceed such income limit, and
(e) does not engage in self-dealing?
.03 Request for comments on other
fact patterns. The Treasury Department
and the IRS are aware that there currently
are organizations operating in other ways
or under other fact patterns that may
wish to qualify as SGOs. For example,
there currently are “fundraising organi-
zations” raising funds to provide schol-
arships that, instead of awarding schol-
arships themselves, make distributions to
other organizations that may be defined
as SGOs. In addition, there are organi-
zations that operate in States with State
tax credits similar to the § 25F credit that
may want to qualify as SGOs described in
§ 25F(c)(5) but currently have structures
or operations not expressly addressed in
this notice. The Treasury Department and
the IRS request additional information
regarding such organizations and whether
they could satisfy all of the requirements
of § 25F(c)(5).
.04 Request for comments on definition
of disqualified person. Section 25F(d)(2)
prohibits an SGO from awarding a schol-
arship to any “disqualified person” and
provides that, for this purpose, a disquali-
fied person is determined pursuant to rules
similar to the rules of § 4946 (relating to
private foundations). Section 4946 pro-
vides that “substantial contributors” to a
private foundation are considered disqual-
ified persons. For purposes of § 4946, a
“substantial contributor” includes any
person that made contributions during the
taxable year in the aggregate of at least
$5,000, if that amount is more than 2 per-
cent of the total contributions the foun-
dation or organization received from its
inception through the end of the taxable
year in which that person’s contributions
were received.
(1) The Treasury Department and the
IRS are considering whether the forth-
coming proposed regulations should
propose to modify this definition, for
purposes of § 25F, to state that the term
“substantial contributor,” with respect
to an SGO, means any person who con-
tributed an aggregate amount of more
than 2 percent of the total contributions
received by the SGO from its inception
through the end of the taxable year in
which that person’s contributions were
received. The Treasury Department and
the IRS request comments on this poten-
tial definition and whether any alterna-
tive interpretation would be a superior
reading of the statute.
(2) The Treasury Department and the
IRS expect that the forthcoming proposed
regulations would provide that an individ-
ual who is a member of the SGO’s selec-
tion committee, or part of the immediate
family of such a member, is a disqualified
person with respect to that SGO. Under
what circumstances should such an indi-
vidual not be considered a disqualified
person for purposes of the § 25F credit?
.05 Request for comments on reporting
and recordkeeping requirements.
(1) Pursuant to the authority provided
by § 25F(h), the Treasury Department
and the IRS anticipate issuing guidance
that would require organizations seeking
to satisfy the requirements to be an SGO
to report certain information to the IRS
and to retain certain records to ensure
that the requirements of § 25F are met.

December 8, 2025 778 Bulletin No. 2025–50
This required reporting and recordkeep-
ing may include the following informa-
tion:
(a) Information on an IRS form or
schedule pertaining to § 25F to be filed
annually by the organization with the
IRS;
(b) Information on each qualified con-
tribution received by the organization,
including the donor’s taxpayer identi-
fication number, to facilitate compari-
son with the donor’s Federal tax credit
claimed; and
(c) Information on each scholarship
recipient awarded a scholarship by the
organization, to ensure that each recipient
meets the requirements of § 25F.
(2) These reporting requirements
would apply to charitable organizations
seeking to satisfy the requirements to
be an SGO that may not normally be
required under § 6033 to file an annual
return with the IRS. These reporting
requirements also would apply to sub-
ordinate organizations recognized as
tax-exempt under § 501(c)(3) on the
basis of a group exemption letter issued
to a central organization.
(a) How should reporting and record-
keeping requirements be designed to
balance the IRS’s need for information
for Federal income tax administration
purposes with the burden imposed on the
reporting organizations?
(b) Is there any current reporting by
such organizations of such information
to States, and, if so, what is reported and
what form does the reporting take?
(c) Under what circumstances, if any,
would relief from these requirements be
justified?
(3) Section 25F(c)(2)(A) defines an
“eligible student” as an individual who is
a member of a household with an income
that, for the calendar year prior to the
date of the application for a scholarship,
is not greater than 300 percent of the area
median gross income (as such term is used
in § 42). How should an SGO verify this
information? For example, should the
SGO require the eligible student to pro-
vide a copy of the most recently filed Fed-
eral income tax return (Form 1040, U.S.
Individual Income Tax Return) that was
filed for each member of the household
with a Federal tax return filing require-
ment? Should additional information be
required? If any member of the household
of the eligible student did not have a Fed-
eral return filing requirement, how should
the SGO verify such household member’s
income?
(4) Section 25F(c)(5)(B) prohibits an
SGO from co-mingling qualified contri-
butions with other amounts and requires
that it maintain one or more separate
accounts exclusively for qualified contri-
butions.
(a) At the time of a donation, what kind
of information would allow the SGO to
determine that the cash is intended to be
a qualified contribution entitling the donor
to a credit under § 25F that thus needs to
be segregated?
(b) Should the donor be required to
provide this information to the SGO in
order to take the § 25F credit?
(c) Should the SGO be required to pro-
vide the donor with written substantiation
in order for the donor to take the § 25F
credit?
(5) What information should an SGO
be required to provide to its donor?
(a) Should the SGO be required to
inform the donor that only the first $1,700
of qualified contributions to SGOs may
entitle the donor to a § 25F credit?
(b) Should the SGO be required to
inform the donor that additional amounts
over the first $1,700 may qualify for a
Federal tax deduction under § 170 (but
that any qualified contribution for which
a § 25F credit is allowed may not be taken
into account as a charitable contribution
for purposes of § 170)?
(c) Should the SGO be required to
inform the donor that any § 25F credit
must be reduced by any credit on any
State tax return of the taxpayer for qual-
ified contributions made by the taxpayer
during the taxable year. If so, when should
the SGO be required to inform the donor
of the requirement to reduce the § 25F
credit by any such State credit?
(6) For a multistate organization (see
sections 3.03(5) and 4.02 of this notice),
what types of reporting and recordkeep-
ing requirements could allow the organi-
zation to demonstrate that it satisfies, for
each State on whose State list it appears,
the requirements of § 25F(c)(5), including
that at least 90 percent of its income allo-
cated to a State is spent on scholarships
within that State?
(7) For multistate organizations, if
such an organization could be eligible
to be listed on one or more State lists as
an SGO, what recordkeeping or other
requirements could allow such an organi-
zation to establish that contributions to it
qualify as contributions to an SGO defined
in § 25F(c)(5)?
SECTION 5. SUBMISSION OF
COMMENTS
.01 Written comments should be sub-
mitted on or before December 26, 2025.
Consideration will be given, however,
to any written comment submitted after
December 26, 2025, if such consideration
will not delay the issuance of guidance.
The subject line for the comments should
include a reference to Notice 2025-70.
Comments may be submitted in one of
two ways:
(1) Electronically via the Federal
eRulemaking Portal at www.regulations.
gov (type IRS-2025-0466 in the search
field on the regulations.gov homepage to
find this notice and submit comments).
(2) Alternatively, by mail to: Internal
Revenue Service, CC:PA:01:PR (Notice
2025-70), Room 5503, P.O. Box 7604,
Ben Franklin Station, Washington, DC
20044.
.02 All commenters are strongly
encouraged to submit comments electron-
ically. The Treasury Department and the
IRS will publish for public availability
any comment submitted electronically, or
on paper, to its public docket on www.reg-
ulations.gov.
SECTION 6. DRAFTING
INFORMATION
The principal author of this notice
is Edward Waters of the Office of the
Associate Chief Counsel (Income Tax &
Accounting). However, other personnel
from the Treasury Department and the
IRS participated in its development. For
further information regarding this notice,
please contact Mr. Waters at (202) 317-
7009 (not a toll-free number).

Bulletin No. 2025–50 779 December 8, 2025
Interim Guidance
Regarding Interest on
Loans Secured by Rural or
Agricultural Real Property
under Section 139L of the
Internal Revenue Code
Notice 2025-71
SECTION 1. OVERVIEW
This notice announces that the Depart-
ment of the Treasury (Treasury Depart-
ment) and the Internal Revenue Service
(IRS) intend to publish a notice of pro-
posed rulemaking (forthcoming proposed
regulations) addressing the exclusion
of interest on loans secured by rural or
agricultural real property under § 139L
of the Internal Revenue Code (Code).
1

Section 139L was added to the Code by
Public Law 119-21, 139 Stat. 72 (July 4,
2025), commonly known as the One, Big,
Beautiful Bill Act (OBBBA). The Trea-
sury Department and the IRS intend to
propose rules in the forthcoming proposed
regulations similar to the interim guidance
provided in section 3 of this notice. Tax-
payers may rely on the interim guidance
in section 3 of this notice in accordance
with section 4 of this notice. Section 5 of
this notice requests comments on issues
addressed in this notice and certain addi-
tional issues, as well as other issues on
which taxpayers believe guidance would
be helpful.
SECTION 2. BACKGROUND
.01 Partial exclusion for certain inter-
est income.
(1) Overview. Section 139L(a)
excludes from gross income 25 percent of
the interest received by a qualified lender
on any qualified real estate loan.
(2) Qualified lender. For purposes of
§ 139L, § 139L(b) defines the term quali-
fied lender to mean--
(a) any bank or savings association the
deposits of which are insured under the
Federal Deposit Insurance Act (12 U.S.C.
1811 et seq.);
(b) any State- or federally-regulated
insurance company;
(c) any entity wholly owned, directly or
indirectly, by a company that is treated as
a bank holding company for purposes of
section 8 of the International Banking Act
of 1978 (12 U.S.C. 3106) if such entity
is organized, incorporated, or established
under the laws of the United States or
any State, and the principal place of busi-
ness of such entity is in the United States
(including any territory of the United
States);
(d) any entity wholly owned, directly
or indirectly, by a company that is con-
sidered an insurance holding company
under the laws of any State if such entity
is organized, incorporated, or established
under the laws of the United States or
any State, and the principal place of busi-
ness of such entity is in the United States
(including any territory of the United
States); and
(e) with respect to interest received on
a qualified real estate loan secured by real
property which is substantially used for
the production of one or more agricultural
products, any federally chartered instru-
mentality of the United States established
under section 8.1(a) of the Farm Credit
Act of 1971 (12 U.S.C. 2279aa-1(a)).
(3) Qualified real estate loan.
(a) In general. For purposes of § 139L,
§ 139L(c)(1) defines a qualified real estate
loan as any loan secured by rural or agri-
cultural real estate, or a leasehold mort-
gage (with a status as a lien) on rural or
agricultural real estate; made to a person
other than a specified foreign entity (as
defined in § 7701(a)(51)); and made after
the date of the enactment of § 139L (July
4, 2025). The determination of whether a
property securing a loan is rural or agri-
cultural real estate must be made as of the
time the interest income on such loan is
accrued.
(b) Refinancings. Pursuant to § 139L(c)
(2), a loan is not treated as made after the
date of the enactment of § 139L to the
extent that the proceeds of such loan are
used to refinance a loan which was made
on or before the date of the enactment of
§ 139L (or, in the case of any series of refi-
nancings, the original loan was made on
or before such date).
(c) Rural or agricultural real estate.
For purposes of § 139L, § 139L(c)(3)
defines the term rural or agricultural real
estate as any real property which is sub-
stantially used for the production of one
or more agricultural products; any real
property which is substantially used in the
trade or business of fishing or seafood pro-
cessing; and any aquaculture facility. Such
term does not include any property which
is not located in a State or a possession of
the United States.
(d) Aquaculture facility. Sec-
tion 139L(c)(4) defines the term aquacul-
ture facility to mean any land, structure, or
other appurtenance that is used for aqua-
culture (including any hatchery, rearing
pond, raceway, pen, or incubator).
.02 Effective date. Section 139L applies
to taxable years ending after July 4, 2025
(that is, the date of the enactment of the
OBBBA).
SECTION 3. INTERIM GUIDANCE
REGARDING THE APPLICATION
OF § 139L
.01 Purpose of this notice. The Trea-
sury Department and the IRS are issuing
this notice to provide interim guidance
regarding the application of § 139L prior
to the publication of the forthcoming pro-
posed regulations.
.02 Defined terms. Any term not defined
in this notice has the meaning provided in
§ 139L. For purposes of this notice:
(1) Interest received. The term inter-
est received means the interest, includ-
ing amounts treated as interest under the
Code, that is includible in gross income
by a qualified lender. For purposes of the
preceding sentence, the amount of inter-
est includible in gross income by a qual-
ified lender is determined without regard
to § 139L, and the time at which interest
is includible in gross income is deter-
mined under the qualified lender’s overall
method of accounting (for example, the
cash receipts and disbursements method
of accounting or an accrual method of
accounting) or, if applicable, under a spe-
cial method of accounting (for example,
§ 1272 for original issue discount).
(2) Pre-enactment loan. The term
pre-enactment loan means any debt
1
Unless otherwise specified, all “section” or “§” references are to sections of the Code or the Income Tax Regulations (26 CFR part 1).

December 8, 2025 780 Bulletin No. 2025–50
instrument with an issue date (within the
meaning of § 1.1273-2) on or before July
4, 2025, or in the case of a refinancing or
any series of refinancings, any debt instru-
ment for which the issue date of the orig-
inal loan was on or before July 4, 2025.
(3) Qualified rural or agricultural
property. The term qualified rural or agri-
cultural property means rural or agricul-
tural real estate or a leasehold mortgage
(with a status as a lien) on rural or agricul-
tural real estate.
.03 Interest received by a qualified
lender under § 139L(a).
(1) Allocation of exclusion. For pur-
poses of applying § 139L(a), a qualified
lender excludes from gross income 25
percent of the interest received on a qual-
ified real estate loan in a taxable year and
includes in gross income 75 percent of the
interest received on a qualified real estate
loan in the taxable year.
(2) No origination requirement. A qual-
ified lender is not required to have been
the original holder of a qualified real estate
loan on the issue date of the qualified real
estate loan in order to exclude interest
income under § 139L(a). For example, a
qualified lender may include a subsequent
holder of a qualified real estate loan, if the
subsequent holder is a qualified lender.
.04 Qualified real estate loan.
(1) Determining whether a loan is
secured by qualified rural or agricultural
property.
(a) A qualified real estate loan is secured
by qualified rural or agricultural property
only if, at the time interest income on such
loan accrues, the qualified lender holds
a valid and enforceable security interest
with respect to the qualified rural or agri-
cultural property under applicable law.
(b) Subject to the safe harbor described
in section 3.04(2) of this notice, the
amount of a loan that is a qualified real
estate loan is limited to the fair market
value of the qualified rural or agricultural
property securing the loan, determined as
of the issue date of the loan. If the amount
of the loan, that is, the issue price of the
loan, exceeds the fair market value of the
qualified rural or agricultural property
securing the loan, determined as of the
issue date of the loan, only the portion of
the loan that does not exceed such value is
a qualified real estate loan. For example,
if, on the issue date of a loan, the loan is
secured by qualified rural or agricultural
property with a fair market value of $10x
and the amount of the loan is $100x, then
only $10x of the loan is a qualified real
estate loan.
(c) A qualified lender that is a subse-
quent holder may apply section 3.04(1)
(b) of this notice either based on the fair
market value of the qualified rural or agri-
cultural property securing the loan and the
issue price of the loan on the issue date,
or based on the fair market value of such
property and the adjusted issue price of
the loan on the date the qualified lender
acquires the loan.
(2) Safe harbor for determining
whether a loan is secured by qualified
rural or agricultural property.
(a) Notwithstanding section 3.04(1) of
this notice, a qualified lender may treat
a loan as fully secured by qualified rural
or agricultural property for purposes of
§ 139L(c) if the terms of the loan provide
the qualified lender an interest described
in section 3.04(1)(a) of this notice with
respect to the property and the fair mar-
ket value of the qualified rural or agricul-
tural property securing the loan is at least
80 percent of the issue price of the loan
on the issue date. For example, if, on the
issue date of a loan, the loan is secured
by qualified rural or agricultural property
with a fair market value of $85x and the
issue price of the loan is $100x, then the
entire loan is treated as a qualified real
estate loan.
(b) A qualified lender that is a subse-
quent holder may apply section 3.04(2)
(a) of this notice either based on the fair
market value of the qualified rural or agri-
cultural property securing the loan and the
issue price of the loan on the issue date,
or based on the fair market value of such
property and the adjusted issue price of
the loan on the date the qualified lender
acquires the loan.
(3) Determining fair market value.
(a) For purposes of this section 3.04,
a qualified lender may determine the
fair market value of property by using
any commercially reasonable valuation
method. A commercially reasonable valu-
ation method includes a method the qual-
ified lender uses in the ordinary course of
its trade or business for valuing property
that secures loans. A commercially rea-
sonable valuation method may take into
account expectations regarding the rural
or agricultural real estate’s production of
income from the activities conducted on
such real estate, as described in § 139L(c)
(3). For example, a qualified lender’s com-
mercially reasonable valuation method
may take into account the value of crops
on or the projected income from harvest-
ing crops on the rural or agricultural real
estate securing the loan.
(b) For purposes of this section 3.04,
a qualified lender may, subject to the
limitation in the following sentence,
add to the fair market value of the rural
or agricultural real estate the fair market
value of any personal property used in
the course of the activities conducted on
such real estate, as described in § 139L(c)
(3), such as farm equipment and machin-
ery or livestock. A qualified lender may
include the value of personal property in
such determination only if the qualified
lender holds a valid and enforceable secu-
rity interest with respect to such personal
property under applicable law, and only
if the relevant loan is secured to a sub-
stantial extent by rural or agricultural real
estate. For example, if real property sub-
stantially used for the production of corn
is valued at $500x, and farm equipment
and machinery used for the production
of corn on such real property is valued
at $50x, the total value that may be used
to determine the fair market value of the
qualified rural and agricultural property
for purposes of section 3.04(1) and (2) of
this notice would be $550x.
(4) Subsequent fair market value test-
ing not required. For purposes of section
3.04(1) and (2) of this notice, so long as
the qualified real estate loan continues to
be secured by the qualified rural or agri-
cultural property and there is not a sub-
sequent significant modification of such
loan under § 1.1001-3, retesting of the fair
market value of such property other than
on the relevant date provided by section
3.04(1) or (2) of this notice is not required.
(5) Reasonable belief. If a qualified
lender initially determined a loan was
secured by qualified rural or agricultural
property under section 3.04(1) or (2) of
this notice, and reasonably believes in
good faith that the loan continues to be
so secured, then the qualified lender may
rely on that initial determination at the
time interest income on such loan accrues

Bulletin No. 2025–50 781 December 8, 2025
for purposes of § 139L(c) and this sec-
tion 3.04. A reasonable, good-faith belief
exists only if the qualified lender reason-
ably believes in good faith both that the
security interest remains in place and that
the rural or agricultural real estate contin-
ues to be used in a manner that qualifies
it as rural or agricultural real estate. A
qualified lender may base this reasonable,
good-faith belief on covenants or other
certifications made by the borrower of
the loan or other parties that have actual
knowledge or reason to know that the loan
is secured by qualified rural or agricultural
property.
(6) Later discovery that a loan is not
secured under § 139L(c).
(a) Except as provided in section
3.04(6)(b) of this notice, if, despite the
qualified lender’s previous reasonable,
good-faith belief described in section
3.04(5) of this notice, the qualified lender,
on a later date, learns or has reason to
believe that a loan is no longer secured by
qualified rural or agricultural property, the
loan will lose its status as a qualified real
estate loan under § 139L on that date.
(b) A loan will be treated as not losing
its status as a qualified real estate loan
under section 3.04(6)(a) of this notice if the
qualified lender, borrower, or other party
causes the loan to be secured by qualified
rural or agricultural property within 90
days following the date on which the qual-
ified lender learns or has reason to believe
that the loan is not secured by qualified
rural or agricultural property.
(7) Use of loan proceeds. For purposes
of section 3.04(1) or (2) of this notice, a
borrower’s use of loan proceeds does not
affect whether a loan may be treated as a
qualified real estate loan.
.05 Refinancings, significant modifica-
tions, and pre-enactment loans.
(1) Partial refinancing. For purposes
of § 139L(c)(2), if the proceeds of a loan
(new loan) are used in part to refinance a
pre-enactment loan and in part for other
purposes, the portion of the new loan
used to refinance the pre-enactment loan
is treated as made on or before July 4,
2025 (that is, the date of enactment of
§ 139L). The amount of the new loan that
may be treated as a qualified real estate
loan is limited to the portion of the new
loan that exceeds the outstanding balance
of the pre-enactment loan as of the date
of the refinancing. In such case, a qual-
ified lender must allocate the principal
of the new loan between amounts used
to refinance any pre-enactment loan and
amounts borrowed for other purposes
accordingly. Any payments of interest or
principal on the new loan are allocated
to the portion of the new loan that is a
pre-enactment loan and the portion that
may be a qualified real estate loan on a
pro rata basis.
(2) Significant modifications. A sig-
nificant modification within the meaning
of § 1.1001-3 of a pre-enactment loan is
treated as a refinancing of the pre-enact-
ment loan for purposes of § 139L(c)(2).
(3) Additional borrowings. A borrowing
after the date of the enactment of § 139L
that is added to the principal amount of
any pre-enactment loan or a borrowing
after the date of enactment of § 139L pur-
suant to a line of credit or similar agree-
ment entered into on or before the date
of enactment that allows the borrower to
borrow periodically under the agreement
(post-enactment amount), is not treated as
a pre-enactment loan to the extent of the
post-enactment amount. For purposes of
this section 3.05(3), the post-enactment
amount does not include any amount
that is used to refinance a pre-enactment
loan. In cases where the outstanding prin-
cipal includes both a pre-enactment loan
and a post-enactment amount, a qualified
lender must allocate the principal amount
between the pre-enactment loan and the
post-enactment amount and must allocate
payments of principal or interest on a pro
rata basis.
.06 Use described in § 139L(c)(3).
For purposes of § 139L(c)(3) and section
3.04(1) or (2) of this notice, the presence
of a residence on qualified rural or agri-
cultural property, or intermittent periods
when such property is not used for the
purposes described in § 139L(c)(3) due
to seasonality, fallowing, or similar cir-
cumstances, does not prevent such prop-
erty from being qualified rural or agri-
cultural property as long as the property
satisfies the substantial use requirement.
By contrast, property with only minimal
or incidental agricultural activity gener-
ally would not be considered to be used
for the purposes described in § 139L(c)
(3), including for this purpose a small
personal garden, backyard beekeeping,
and keeping chickens to produce eggs for
household use.
SECTION 4. APPLICABILITY
DATES
It is anticipated that the forthcoming
proposed regulations will include pro-
posed rules consistent with the interim
guidance provided in section 3 of this
notice and that the proposed regulations,
when finalized, will apply for taxable
years beginning after final regulations are
published in the Federal Register. Taxpay-
ers may rely on the interim guidance set
forth in section 3 of this notice for loans
made after July 4, 2025, and on or before
the date that is 30 days after the forthcom-
ing proposed regulations are published in
the Federal Register.
SECTION 5. REQUEST FOR
COMMENTS
.01 Comments regarding § 139L. The
Treasury Department and the IRS request
comments on the issues addressed in this
notice as well as other issues on which
taxpayers believe guidance would be
helpful. The Treasury Department and the
IRS also request comments on the follow-
ing specific issues:
(1) To what extent should the forth-
coming proposed regulations address the
meaning of the terms rural or agricultural
real estate, real property, agricultural
products, fishing or seafood processing,
or aquaculture facility? Should the forth-
coming proposed regulations consider
definitions and guidance relating to sim-
ilar terms, including under § 2032A, §
1.199A-8, and § 1.856-10?
(2) To what extent should the forth-
coming proposed regulations address
whether property is substantially used for
the production of one or more agricultural
products, or in the trade or business of
fishing or seafood processing? For exam-
ple, are factors such as time spent, amount
of land used, or revenue relevant, and to
what extent should seasonality or periods
of non-use be further considered?
(3) To what extent should the forth-
coming proposed regulations address how
the substantial use requirement applies to
properties with mixed uses, such as farm-
land that is used to host events or other

December 8, 2025 782 Bulletin No. 2025–50
non-agricultural activity, or properties that
are also used (in whole or part) for per-
sonal purposes?
(4) How should the forthcoming pro-
posed regulations address changes involv-
ing qualified rural or agricultural property
following the issuance of a qualified real
estate loan, including changes in the use
of the property, changes to the property, or
changes affecting the collateral of a loan?
(5) How should the forthcoming pro-
posed regulations address how a quali-
fied lender determines whether the loan
remains secured by qualified rural or agri-
cultural property?
(6) To what extent should the forth-
coming proposed regulations address how
§ 139L applies in securitization structures,
including a securitization involving a trust
for which holders of trust certificates are
treated as holding an interest in the under-
lying loan assets?
(7) To what extent should the forth-
coming proposed regulations address
§ 139L(d), regarding the application of
§ 265 to any qualified real estate loan?
.02 Procedures for submitting com-
ments.
(1) Deadline. Written comments
should be submitted by January 20, 2026.
Consideration will also be given to any
written comment submitted after January
20, 2026, though such comments may not
be considered in the development of the
forthcoming proposed regulations if such
consideration would delay the publica-
tion of the forthcoming proposed regu-
lations.
(2) Form and manner. The subject line
for the comments should include a refer-
ence to Notice 2025-71. All commenters
are strongly encouraged to submit com-
ments electronically. Comments may be
submitted in one of two ways:
(a) electronically via the Federal
eRulemaking Portal at https://www.reg-
ulations.gov (type IRS-2025-0400 in the
search field on the https://www.regula-
tions.gov homepage to find this notice and
submit comments); or
(b) by mail to: Internal Revenue Ser-
vice, CC:PA:01:PR (Notice 2025-71),
Room 5503, P.O. Box 7604, Ben Franklin
Station, Washington, D.C., 20044.
(3) Publication of comments. The Trea-
sury Department and the IRS will publish
for public availability any comment sub-
mitted electronically and on paper to the
IRS’s public docket on https://www.regu-
lations.gov.
SECTION 6. DRAFTING AND
CONTACT INFORMATION
The principal author of this notice is
Matthew DeBenedetto of the Office of the
Associate Chief Counsel (Financial Insti-
tutions & Products). For further informa-
tion regarding this notice, please contact
Mr. DeBenedetto at (202) 317-3998 (not a
toll-free number).

Bulletin No. 2025–50 783 December 8, 2025
Part IV
Certifications Issued for
Round 1 of the Qualifying
Advanced Energy Project
Credit Allocation Program
Under Section 48C(e)
Announcement 2025-22
This announcement discloses the first
set of certifications from the period begin-
ning March 29, 2024, through September
30, 2025, resulting from the Round 1 allo-
cation of the qualifying advanced energy
project credit provided by § 48C(e) of the
Internal Revenue Code.
SECTION 1. QUALIFYING
ADVANCED ENERGY PROJECT
CREDIT
Notice 2023-18 established the pro-
gram under § 48C(e)(1) of the Internal
Revenue Code (Code) to allocate $10 bil-
lion of credits ($4 billion of which may be
allocated only to projects located in cer-
tain energy communities) (§ 48C credits)
for qualified investments in eligible quali-
fying advanced energy projects (§ 48C(e)
program).
For purposes of § 48C credit allocations
under the § 48C(e) program, § 48C(e)(4)
(A) provides a base credit rate of 6 percent
of the qualified investment (as defined in §
48C(b)). In the case of any project which
satisfies the requirements of § 48C(e)(5)
(A) and (6) (prevailing wage and appren-
ticeship requirements), § 48C(e)(4)(B)
provides an alternative rate of 30 percent
of the qualified investment.
The Treasury Department and the IRS
provided two allocation rounds under the
§ 48C(e) program. For the first allocation
round (Round 1) of the § 48C(e) program,
which began on May 31, 2023, the IRS
allocated $4 billion
1
of the § 48C credits
with approximately $1.6 billion in § 48C
credits allocated to projects located in cer-
tain energy communities. Section 70515
of Public Law 119-21, 139 Stat. 72, 276
(July 4, 2025), commonly known as the
One, Big, Beautiful Bill Act (OBBBA)
amended § 48C(e)(3)(C) to limit the
availability of previously allocated § 48C
credits that were subsequently revoked for
future § 48C(e) program allocations.
SECTION 2. CERTIFICATION
Section 48C(e)(3)(B) provides that
each applicant for certification has 2 years
from the date of acceptance by the Sec-
retary of the § 48C(e) application during
which to provide to the Secretary evidence
that the requirements of the certification
have been met.
Section 48C(e)(7) provides that
upon making a certification under §
48C(e), the Secretary is required to dis-
close publicly the identity of the appli-
cant and the amount of the § 48C credit
certified with respect to such applicant.
This notice provides the identity of the
taxpayer and the amount of the § 48C
credits allocated to the taxpayer with
respect to projects that have been allo-
cated a § 48C credit and for which a cer-
tification was issued during the period
beginning on March 29, 2024, the day
that Round 1 allocation notification
letters were issued, and ending on Sep-
tember 30, 2025, for Round 1 of the §
48C(e) program. The IRS will publish
additional such notices annually for
certifications issued during each suc-
cessive 12-month period beginning on
October 1, 2025.
Accordingly, the certifications issued
to date for Round 1 of the § 48C(e) pro-
gram are as follows:
ApplicantAmount
Power Brace LLC$ 628,168.00
Hemlock Semiconductor Operations LLC$ 86,400,000.00
Essex Furukawa Magnet Wire USA LLC$ 11,520,000.00
JSW Steel USA Ohio, Inc.$ 43,500,000.00
Pennsylvania Transformer Technology Inc.$ 2,100,000.00
Voith Hydro Inc.$ 5,826,254.00
Electric Hydrogen Co.$ 18,348,108.00
Delta Star Inc.$ 1,803,480.00
MP Magnetics LLC$ 58,500,000.00
Beam Suntory Inc.$ 9,495,900.00
Bekaert Corporation $ 4,061,559.00
Electric Research and Manufacturing Cooperative Inc. $ 4,762,743.00
American Battery Technology Company$ 19,575,896.00
1
The IRS allocated approximately $6 billion of the § 48C credits in the second allocation round (Round 2) of the § 48C(e) program. See Announcement 2025-23 in I.R.B. 2025-50.

December 8, 2025 784 Bulletin No. 2025–50
SECTION 3. DRAFTING
INFORMATION
The principal author of this
announcement is Jean Elting Rowe of
the Large Business and International
Division. However, other personnel
from the Treasury Department and
Office of Associate Chief Counsel
(Energy, Credits, and Excise Tax) par-
ticipated in its development. For further
information regarding this announce-
ment, call (202) 317-5254 (not a toll-
free number).
Certifications Issued
for Round 2 of the
Qualifying Advanced
Energy Project Credit
Allocation Program Under
Section 48C(e)
Announcement 2025-23
This announcement discloses the
first set of certifications from the period
beginning January 10, 2025, through
September 30, 2025, resulting from the
Round 2 allocation of the qualifying
advanced energy project credit provided
by § 48C(e) of the Internal Revenue
Code.
SECTION 1. QUALIFYING
ADVANCED ENERGY PROJECT
CREDIT
Notice 2023-18 established the pro-
gram under § 48C(e)(1) of the Internal
Revenue Code (Code) to allocate $10 bil-
lion of credits ($4 billion of which may be
allocated only to projects located in cer-
tain energy communities) (§ 48C credits)
for qualified investments in eligible quali-
fying advanced energy projects (§ 48C(e)
program).
For purposes of § 48C credit allocations
under the § 48C(e) program, § 48C(e)(4)
(A) provides a base credit rate of 6 percent
of the qualified investment (as defined in §
48C(b)). In the case of any project which
satisfies the requirements of § 48C(e)(5)
(A) and (6) (prevailing wage and appren-
ticeship requirements), § 48C(e)(4)(B)
provides an alternative rate of 30 percent
of the qualified investment.
The Treasury Department and the IRS
provided two allocation rounds under the §
48C(e) program. For the second allocation
round (Round 2) of the § 48C(e) program,
which began on May 22, 2024, the IRS
allocated approximately $6 billion
1
of the
§ 48C credits with approximately $2.5 bil-
lion in § 48C credits allocated to projects
in designated energy communities. Section
70515 of Public Law 119-21, 139 Stat. 72,
276 (July 4, 2025), commonly known as
the One, Big, Beautiful Bill Act (OBBBA),
amended § 48C(e)(3)(C) to limit the avail-
ability of previously allocated § 48C credits
that were subsequently revoked for future §
48C(e) program allocations.
SECTION 2. CERTIFICATION
Section 48C(e)(3)(B) provides that
each applicant for certification has 2 years
from the date of acceptance by the Sec-
retary of the § 48C(e) application during
which to provide to the Secretary evidence
that the requirements of the certification
have been met.
Section 48C(e)(7) provides that upon
making a certification under § 48C(e),
the Secretary is required to disclose pub-
licly the identity of the applicant and the
amount of the § 48C credit certified with
respect to such applicant. This notice pro-
vides the identity of the taxpayer and the
amount of the § 48C credits allocated to
the taxpayer with respect to projects that
have been allocated a § 48C credit and for
which a certification was issued during
the period beginning on January 10, 2025,
the day that Round 2 allocation notifica-
tion letters were issued, and ending on
September 30, 2025, for Round 2 of the
§ 48C(e) program. The IRS will publish
additional such notices annually for cer-
tifications issued during each successive
12-month period beginning on October 1,
2025.
Accordingly, the certifications issued
to date for Round 2 of the § 48C(e) pro-
gram are as follows:
TaxpayerAmount of Credit Certified
Ozinga Cement, Inc.$ 14,930,597.75
Tesla, Inc.$ 240,289,310.00
SECTION 3. DRAFTING
INFORMATION
The principal author of this announce-
ment is Jean Elting Rowe of the Large
Business and International Division.
However, other personnel from the Trea-
sury Department and the Office of Asso-
ciate Chief Counsel (Energy, Credits, and
Excise Tax) participated in its develop-
ment. For further information regarding
this announcement, call (202) 317-5254
(not a toll-free number).
1
The IRS allocated approximately $4 billion of the § 48C credits in the first allocation round (Round 1) of the § 48C(e) program. See Announcement 2025-22 in I.R.B. 2025-50.

Bulletin No. 2025–50 785 December 8, 2025
Announcement of
Disciplinary Sanctions
From the Office of
Professional Responsibility
Announcement 2025-29
The Office of Professional Responsibil-
ity (OPR) announces recent disciplinary
sanctions imposed on attorneys, certi-
fied public accountants, enrolled agents,
enrolled actuaries, enrolled retirement
plan agents, and appraisers. The OPR also
announces when certain unenrolled, unli-
censed tax return preparers (individuals
who are not enrolled to practice before
the Internal Revenue Service (IRS) and
are not licensed as attorneys or certified
public accountants) have been disciplined.
Licensed or enrolled practitioners are sub-
ject to the regulations governing practice
before the IRS, which are set out in Title
31, Code of Federal Regulations, Subti-
tle A, Part 10, and which are released as
Treasury Department Circular No. 230.
The regulations prescribe the duties and
restrictions relating to such practice and
prescribe the disciplinary sanctions for
violating the regulations. Unenrolled/
unlicensed return preparers who choose to
participate in the IRS’s voluntary Annual
Filing Season Program (AFSP) are sub-
ject to the guidance in Revenue Procedure
2014-42, which governs a preparer’s eligi-
bility to represent taxpayers before the IRS
in examinations of tax returns the preparer
both prepared for the taxpayer and signed
as the preparer. Additionally, unenrolled/
unlicensed return preparers who partic-
ipate in the AFSP agree to be subject to
the duties and restrictions in Circular 230,
including the restrictions on incompetence
or disreputable conduct.
The disciplinary sanctions imposed for
violation of the applicable standards are:
Disbarred from practice before the
IRS—An individual who is disbarred
is not eligible to practice before the IRS
as defined at 31 C.F.R. § 10.2(a)(4) for a
minimum period of five (5) years and until
reinstated to practice.
Suspended from practice before the
IRS—An individual who is suspended is
not eligible to practice before the IRS as
defined at 31 C.F.R. § 10.2(a)(4) during
the term of the suspension and until rein-
stated to practice.
Censured—Censure is a public repri-
mand. Unlike disbarment or suspension,
censure does not affect an individual’s eli-
gibility to practice before the IRS, but the
OPR may subject the individual’s future
practice rights to conditions designed to
promote high standards of conduct.
Monetary penalty—A monetary pen-
alty may be imposed on an individual who
engages in conduct subject to sanction, or
on an employer, firm, or other entity if the
individual was acting on its behalf and it
knew, or reasonably should have known,
of the individual’s conduct.
Disqualification of appraiser—An
appraiser who is disqualified is barred
from presenting evidence or testimony in
any administrative proceeding before the
Department of the Treasury or the IRS.
Additionally, any appraisal made by the
disqualified appraiser after the effective
date of disqualification will not have any
probative effect in any administrative pro-
ceeding before the Treasury Department
or the IRS.
Ineligible for limited practice—An
unenrolled/unlicensed tax return preparer
who participates in the AFSP and who fails
to comply with Circular 230 as required
by Revenue Procedure 2014-42 may have
their AFSP credential revoked and may be
determined ineligible to engage in future
limited practice under the program as a
representative of a taxpayer.
Under the regulations, individuals
subject to Circular 230 may not assist, or
accept assistance from, individuals who
are suspended or disbarred with respect
to matters constituting practice (i.e., rep-
resentation) before the IRS, and they may
not aid or abet suspended or disbarred
individuals to practice before the IRS.
Disciplinary sanctions are described in
these terms:
Disbarred by decision, Suspended by
decision, Censured by decision, Mone-
tary penalty imposed by decision, and
Disqualified by decision (including after
a hearing)—An administrative law judge
(ALJ), upon the OPR’s complaint alleg-
ing violation of the regulations, issued a
decision imposing one of these sanctions
after the ALJ either (1) granted the gov-
ernment’s motion for summary adjudica-
tion or (2) after conducting an evidentiary
hearing. After 30 days from the issuance
of the decision, in the absence of an
appeal, the ALJ’s decision becomes the
final agency decision.
Disbarred by default decision, Sus-
pended by default decision, Censured
by default decision, Monetary pen-
alty imposed by default decision, and
Disqualified by default decision—An
ALJ, after finding that no answer to the
OPR’s complaint was filed or timely filed,
granted the OPR’s motion for a default
judgment and issued a decision imposing
one of these sanctions.
Disbarred by decision on appeal,
Suspended by decision on appeal, Cen-
sured by decision on appeal, Mone-
tary penalty imposed by decision on
appeal, and Disqualified by decision
on appeal—The decision of the ALJ was
appealed to the agency’s appellate author-
ity, acting as the delegate of the Secretary
of the Treasury, and the appellate author-
ity issued a decision imposing one of these
sanctions.
Disbarred by consent, Suspended by
consent, Censured by consent, Mone-
tary penalty imposed by consent, and
Disqualified by consent—In lieu of a
disciplinary proceeding being instituted or
continued, an individual offered their con-
sent to one of these sanctions (or a firm or
other entity offered to consent to a mon-
etary penalty) and the OPR accepted the
offer and the parties entered into a consent
agreement. Typically, an offer of consent
will provide for: suspension for an indef-
inite term; conditions that the individual
must observe during the suspension; and
the individual’s opportunity, after a stated
number of months, to file with the OPR
a petition for reinstatement affirming
compliance with the terms of the consent
agreement and affirming current fitness
and eligibility to practice (i.e., an active
professional license or active enrollment
status, with no intervening violations of
the regulations).
Suspended indefinitely by decision
in expedited proceeding, Suspended
indefinitely by default decision in expe-
dited proceeding—The OPR instituted
an expedited proceeding for suspension
(based on certain limited grounds, includ-
ing loss of a professional license for cause,
and criminal convictions) that resulted in
suspension.

December 8, 2025 786 Bulletin No. 2025–50
Determined ineligible for limited
practice—There has been a final deter-
mination under Revenue Procedure
2014-42 that an unenrolled/unlicensed
tax return preparer is not eligible for con-
tinued limited representation of taxpay-
ers because the preparer violated stan-
dards of conduct prescribed in Circular
230 or failed to comply with any of the
requirements described in the revenue
procedure.
A practitioner who has been disbarred
or suspended under 31 C.F.R. § 10.60, or
suspended under § 10.82, or a disqualified
appraiser may petition for reinstatement
before the IRS after the expiration of 5
years following such disbarment, suspen-
sion, or disqualification (or immediately
following the expiration of the suspension
or disqualification period if shorter than 5
years). Reinstatement will not be granted
unless the IRS is satisfied that the peti-
tioner is not likely to engage thereafter in
conduct contrary to Circular 230, and that
granting such reinstatement would not be
contrary to the public interest.
Reinstatement decisions are published
at the individual’s request, and described
in these terms:
Reinstated to practice before the
IRS—The OPR granted the individual’s
petition for reinstatement. The individual
is eligible to practice before the IRS, or in
the case of an appraiser, the individual is
no longer disqualified.
The OPR has authority to disclose
the grounds for disciplinary sanctions in
these situations: (1) an ALJ or the Sec-
retary’s delegate on appeal has issued a
final decision imposing a sanction; (2) the
individual has settled a disciplinary case
by signing the OPR’s consent-to-sanction
agreement admitting to one or more vio-
lations of the regulations and consenting
to the disclosure of the admitted viola-
tions (for example, willful failure to file
Federal income tax returns, lack of due
diligence, conflict of interest, etc.); (3)
that the OPR has issued a decision in an
expedited proceeding for indefinite sus-
pension; or (4) upon a final determination
(including any decision on appeal) that an
unenrolled/unlicensed return preparer is
no longer eligible to represent taxpayers
before the IRS under Revenue Procedure
2014-42.
Announcements of disciplinary sanc-
tions appear in the Internal Revenue
Bulletin at the earliest practicable date.
The sanctions announced below are
alphabetized first by state and second by
the last names of the sanctioned individ-
uals.
City & StateNameProfessional
Designation
Disciplinary SanctionEffective Date(s)
California
BeniciaSingh, BarjinderjitC PASuspended by default decision
in expedited proceeding under
31 C.F.R. § 10.82(b)
Indefinite from
August 15, 2025
Chino HillsZhong, John Z.CPA/
Enrolled Agent
Reinstated to
practice before
the IRS, effective
July 16, 2024
Colorado
EnglewoodBaird, StephenAttorneySuspended by default decision
in expedited proceeding under
31 C.F.R. § 10.82(b)
Indefinite from
September 30, 2024
Iowa
Atkins Sweet, Kimberly S.Enrolled AgentSuspended by decision in
expedited proceeding under
31 C.F.R. § 10.82(b)
Indefinite from
September 9, 2025
Kansas
LeawoodRenkemeyer, Troy D. Attorney/
C PA
Suspended by decision in
expedited proceeding under
31 C.F.R. § 10.82(b)
Indefinite from
July 7, 2025
WichitaAyesh, Mark G.Attorney/
C PA
Censured by consent for
admitted violations of
31 C.F.R. § 10.51(a)(10)
Indefinite from
June 21, 2023
New Jersey
Avon by the SeaBenkoil, James H.C PASuspended by default decision
in expedited proceeding under
31 C.F.R. § 10.82(b)
Indefinite from
August 1, 2025

Bulletin No. 2025–50 787 December 8, 2025
City & StateNameProfessional
Designation
Disciplinary SanctionEffective Date(s)
Englewood CliffsSardis, Jack N.C PASuspended by decision in
expedited proceeding under
31 C.F.R. § 10.82(b)
Indefinite from
August 1, 2025
Tennessee
Signal MountainFrost, Jonathan D.C PASuspended by default decision
in expedited proceeding under
31 C.F.R. § 10.82(b)
Indefinite from
September 30, 2024
Virginia
AlexandriaGuilliams, Roger L.C PASuspended by decision in
expedited proceeding under
31 C.F.R. § 10.82(b)
Indefinite from
September 30, 2024

Bulletin No. 2025–50 i December 8, 2025
Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplified describes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus,
if an earlier ruling held that a principle
applied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).
Clarified is used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in a
prior ruling is being changed.
Distinguished describes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modified is used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
with amplified and clarified, above).
Obsoleted describes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transactions.
This term is most commonly used in a ruling
that lists previously published rulings that
are obsoleted because of changes in laws or
regulations. A ruling may also be obsoleted
because the substance has been included in
regulations subsequently adopted.
Revoked describes situations where the
position in the previously published ruling
is not correct and the correct position is
being stated in a new ruling.
Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a
period of time in separate rulings. If the
new ruling does more than restate the sub-
stance of a prior ruling, a combination of
terms is used. For example, modified and
superseded describes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.
Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings in the series.
Suspended is used in rare situations
to show that the previous published rul-
ings will not be applied pending some
future action such as the issuance of new
or amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.
Abbreviations
The following abbreviations in current
use and formerly used will appear in
material published in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.
—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.

December 8, 2025 ii Bulletin No. 2025–50
Numerical Finding List
1
Bulletin 2025–50
Announcements:
2025-19, 2025-29 I.R.B. 191
2025-20, 2025-31 I.R.B. 271
2025-21, 2025-32 I.R.B. 312
2025-24, 2025-36 I.R.B. 359
2025-25, 2025-36 I.R.B. 360
2025-26, 2025-40 I.R.B. 444
2025-22, 2025-50 I.R.B. 783
2025-23, 2025-50 I.R.B. 784
2025-29, 2025-50 I.R.B. 785
Notices:
2025-32, 2025-27 I.R.B. 1
2025-33, 2025-27 I.R.B. 4
2025-34, 2025-27 I.R.B. 6
2025-35, 2025-27 I.R.B. 8
2025-31, 2025-28 I.R.B. 14
2025-36, 2025-30 I.R.B. 192
2025-37, 2025-30 I.R.B. 198
2025-40, 2025-31 I.R.B. 266
2025-39, 2025-32 I.R.B. 308
2025-28, 2025-34 I.R.B. 316
2025-41, 2025-34 I.R.B. 325
2025-42, 2025-36 I.R.B. 351
2025-43, 2025-36 I.R.B. 356
2025-44, 2025-37 I.R.B. 386
2025-45, 2025-37 I.R.B. 388
2025-38, 2025-38 I.R.B. 392
2025-47, 2025-40 I.R.B. 441
2025-51, 2025-41 I.R.B. 448
2025-52, 2025-41 I.R.B. 474
2025-54, 2025-41 I.R.B. 479
2025-46, 2025-43 I.R.B. 533
2025-50, 2025-43 I.R.B. 542
2025-53, 2025-43 I.R.B. 624
2025-55, 2025-43 I.R.B. 625
2025-49, 2025-44 I.R.B. 627
2025-57, 2025-45 I.R.B. 692
2025-61, 2025-45 I.R.B. 693
2025-63, 2025-46 I.R.B. 709
2025-65, 2025-47 I.R.B. 717
2025-62, 2025-48 I.R.B. 740
2025-67, 2025-49 I.R.B. 761
2025-69, 2025-50 I.R.B. 766
2025-70, 2025-50 I.R.B. 773
2025-71, 2025-50 I.R.B. 779
Proposed Regulations:
REG-125710-18, 2025-30 I.R.B. 263
REG-107459-24, 2025-32 I.R.B. 313
REG-132805-17, 2025-35 I.R.B. 342
REG-108822-25, 2025-36 I.R.B. 361
Proposed Regulations:—Continued
REG-129260-16, 2025-39 I.R.B. 410
REG-108673-25, 2025-42 I.R.B. 494
REG-110032-25, 2025-42 I.R.B. 495
REG-112261-24; REG-116085-23, 2025-42
I.R.B. 522
REG-109742-25, 2025-46 I.R.B. 712
Revenue Procedures:
2025-22, 2025-30 I.R.B. 200
2025-24, 2025-31 I.R.B. 273
2025-25, 2025-32 I.R.B. 311
2025-26, 2025-33 I.R.B. 315
2025-28, 2025-38 I.R.B. 393
2025-30, 2025-42 I.R.B. 489
2025-27, 2025-44 I.R.B. 646
2025-32, 2025-45 I.R.B. 695
2025-31, 2025-48 I.R.B. 743
Revenue Rulings:
2025-13, 2025-28 I.R.B. 11
2025-14, 2025-32 I.R.B. 300
2025-15, 2025-32 I.R.B. 302
2025-16, 2025-35 I.R.B. 342
2025-17, 2025-36 I.R.B. 349
2025-18, 2025-37 I.R.B. 365
2025-19, 2025-41 I.R.B. 445
2025-20, 2025-41 I.R.B. 447
2025-21, 2025-45 I.R.B. 690
2025-22, 2025-48 I.R.B. 719
2025-23, 2025-48 I.R.B. 749
2025-24, 2025-50 I.R.B. 764
Treasury Decisions:
10021, 2025-31 I.R.B. 264
10031, 2025-32 I.R.B. 304
10033, 2025-40 I.R.B. 411
10035, 2025-42 I.R.B. 484
10034, 2025-43 I.R.B. 523
10036, 2025-43 I.R.B. 525
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2025–27 through 2025–52 is in Internal Revenue Bulletin
2025–52, dated December 22, 2025.

Bulletin No. 2025–50 iii December 8, 2025
Finding List of Current Actions on
Previously Published Items
1
Bulletin 2025–50
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2025–27 through 2025–52 is in Internal Revenue Bulletin
2025–52, dated December 22, 2025.

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