United States: Tax Authorities

The U.S. Department of the Treasury and IRS have released Notice 2026-53, establishing new emissions rate tables for the Section 45Z clean fuel production tax credit and implementing key amendments from the One Big Beautiful Bill Act. The notice introduces distinct emissions rates for transportation fuels derived from animal manure, permits farm-specific alternative fate determinations, and addresses the exclusion of indirect land use change emissions.

Washington voters will decide the future of the state’s new 9.9% tax on annual taxable income above $1 million after a repeal initiative qualified for the November ballot.

The IRS and Treasury Department have proposed sweeping new regulations that could strip tax-exempt status from private schools using race-based criteria in admissions, scholarships, or programs—even when designed to promote diversity or remedy historical discrimination. These proposed rules would affect an estimated 18,000 educational institutions nationwide and create significant compliance challenges for schools, their donors, and holders of tax-exempt bonds financing educational facilities.

New Texas Comptroller Don Huffines has confirmed the need to revisit the state's aggressive data processing tax interpretations, which have drawn significant criticism from the business community.

The U.S. Department of Treasury has proposed new regulations that would revoke federal tax-exempt status for private schools and colleges that consider race, color, or national origin in any of their policies or practices. The proposed rule would eliminate existing provisions that currently permit limited race-conscious measures and could dramatically affect thousands of private educational institutions across the country.

On Sept. 3, 2026, the U.S. Department of the Treasury and the Internal Revenue Service (IRS) released proposed regulations that would deny or revoke tax-exempt status under Internal Revenue Code (Code) Section 501(c)(3) for private educational institutions that offer targeted support to students based on race, color or national or ethnic origin.

Recent court rulings are reshaping how the IRS applies the economic substance doctrine to challenge tax transactions, but conflicting judicial interpretations of the relevancy threshold are creating uncertainty for businesses. The Tenth Circuit's decision in Liberty Global and the Tax Court's ruling in Patel reveal divergent approaches to determining when this doctrine applies, leaving taxpayers to navigate inconsistent standards across different jurisdictions.

On August 14, the U.S. Department of the Treasury (Treasury) and the Internal Revenue Service (the IRS), in consultation with the Administrator of the Environmental Protection Agency (the EPA), the Secretary of Energy, and the Secretary of the Interior, released Notice 2026-50 (the Updated Notice), which modifies and amplifies guidance under Section 45Q of the Internal Revenue Code of 1986, as amended (the Code), that was introduced in December under Notice 2026-1.

Cannabis businesses face unique tax challenges under Section 280E, which limits deductions and increases audit risk. Learn how to prepare comprehensive documentation, establish proper accounting methods, and respond effectively to IRS examinations while maintaining compliance with federal, state, and local tax obligations.