Tax Bytes: Week of April 6, 2026

Tax developments

New revenue procedure offers flexibility for business interest limitation elections

On March 18, 2026, the IRS released Rev. Proc. 2026-17, providing an avenue for taxpayers to revoke a prior election under section 163(j)(7) to be treated as an “electing real property trade or business,” “electing farming business,” or “excepted regulated utility trade or business.” New changes in the One Big Beautiful Bill Act (OBBBA) have significantly altered the cost-benefit analysis of having made an otherwise irrevocable election under section 163(j)(7), which requires electing taxpayers to forgo bonus depreciation in exchange for the ability to disregard the limitation on the deductibility of business interest expense in section 163(j). Rev. Proc. 2026-17 provides a rare opportunity for relief from an otherwise irrevocable election and represents a potentially significant benefit for taxpayers in capital-intensive industries that also expect to have substantial deductible business interest expense under OBBBA.
Read our full alert here.

IRS Notice 2026-20: Extended relief for digital asset basis identification

The IRS recently issued Notice 2026-20, which extends for an additional year the temporary relief originally provided in Notice 2025-7. As discussed in additional detail below, Notice 2025-7 allowed eligible taxpayers to use alternative methods for making an adequate identification of digital asset units held in the custody of a broker that are sold, disposed of, or transferred during the relief period. 

When a taxpayer sells some, but not all, of its units of a digital asset, a question arises as to which units the taxpayer sold and which units it retained for purposes of calculating gain or loss on the sale. Final regulations under Treas. Reg. § 1.1012-1(j) provide ordering rules for determining which units of the same digital asset should be treated as sold when a taxpayer holds multiple units of the same digital asset within the same wallet that were acquired on different dates or at different prices. For assets held by a taxpayer’s broker, the regulations permit a taxpayer to identify the particular units of the digital asset to be transferred or record a standing order with the broker, for example, treat units with the highest basis as sold first. If the taxpayer does not make an adequate identification or have a standing order in place, then the taxpayer is treated as selling the units that have been held the longest (typically referred to as the “first-in first-out” or “FIFO” rule).

Notice 2025-7 offered temporary relief to taxpayers for the calendar year 2025, allowing them to identify particular units to be transferred or record a standing order in their own books and records, relieving them from the requirements under the regulations to communicate identifications or standing orders to the broker. Notice 2026-20 extends this relief for sales, dispositions, or transfers occurring after December 31, 2026. While Notice 2025-7 was intended to lapse at the end of 2025, the Department of the Treasury and IRS have determined that additional time is necessary to allow brokers to build out systems to allow taxpayer to make identifications and record standing orders. 

Notably, the relief is limited to the regulations under section 1012. It does not affect the requirement for brokers to report sales of digital assets under section 6045, nor does it affect digital assets that are not held by a broker.

Recent Trump accounts guidance: Implications for employers and beyond

In early March, Treasury and the IRS released two notices of proposed rulemaking regarding Trump accounts, providing the first sets of proposed regulations with respect to Trump accounts. In this legal alert, we provide an overview of Trump accounts and the guidance provided thus far, and focus on employer contributions, trustee obligations, initial and rollover contributions, investments, and state tax implications.

Read our full alert here. 

Bipartisan Senate Bill proposes significant improvements to US tax administration

Bipartisan leaders in the Senate Finance Committee have introduced the Taxpayer Assistance and Service Act, a wide-ranging proposal aimed at modernizing IRS operations and strengthening taxpayer protections. The bill would accelerate digital return processing, expand transparency tools on IRS.gov, reinforce penalty-approval safeguards, streamline duplicative international reporting (including FBAR-related requirements), and improve access to IRS Appeals and Tax Court review.

Read our full alert here.

Recent Eversheds Sutherland Tax insights 

Reduced VAT rate applies to public electric vehicle charging

Swiss Tax – The One Pager

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