Issue Number: 2026-13
Inside This Issue
Majority of states join new Federal Scholarship Tax Credit Program
A total of 27 states have joined the Federal Scholarship Tax Credit (FSTC) program created under the One, Big, Beautiful Bill. Starting in 2027, eligible taxpayers can claim a federal tax credit for up to $1,700 for qualified contributions to Scholarship Granting Organizations (SGOs) that fund scholarships for K-12 education expenses and services.
To claim the credit, taxpayers must contribute to an SGO located in a state that participates in the FSTC program and submits a list of qualified SGOs.
Visit Federal Scholarship Tax Credit at IRS.gov for a complete list of states that have joined the program and to read the most current information.
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IRS and Security Summit announce new framework to combat fraud
The IRS and Security Summit partners announced a new framework to protect taxpayers from fraud. The updated structure strengthens protections against tax-related identity theft and fraud. It also enhances information sharing with the IRS, state tax agencies and the tax professional community. To help improve early detection of suspicious activity, five specialized work groups will focus on:
- Pre-filing early identification
- Forecasting emerging schemes and threats
- Preventing fraud
- Detecting fraud and intelligence sharing
- Coordinated responses to security incidents
For additional information, view Security Summit at IRS.gov.
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Fiscal Year 2025 Data Book now available
The IRS Data Book highlights the agency’s activities during fiscal year 2025.
Activities highlighted include:
- Returns filed: 271.4 million federal tax returns processed
- Taxpayer Service: almost 18.6 million calls answered and nearly 2 million taxpayers assisted by Taxpayer Assistance Centers
- IRS online: nearly 417 million inquiries on “Where’s My Refund?”
Read the news release or view the complete Data Book on IRS.gov for more information.
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Treasury and IRS move forward on executive compensation excise tax
Treasury and IRS recently announced intent to issue proposed regulations implementing changes made by the One, Big, Beautiful Bill (OBBB) to the excise tax on excessive compensation paid by tax-exempt organizations. OBBB broadened the definition of covered employee of an applicable tax-exempt organization (ATEO).
Businesses and individuals should review notice 2026-36 for clarification on the definition of covered employees and guidance on ATEOs and their related organizations. The news release also contains more details about the proposed regulations.
Public comments on these proposed regulations should be submitted by August 4, 2026, through Regulations.gov.
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Other tax news
The following information may be of interest to individuals and groups in or related to small businesses:
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