The Internal Revenue Service (IRS) unveiled several significant updates regarding tax guidance and related matters between December 15 and December 22, 2025. These updates include new notices, rulings, and interim guidance addressing various aspects of federal tax policy.
Key Notices and Rulings Issued
On December 15, 2025, the IRS released Notice 2026-2, which detailed updates on weighted average interest rates, yield curves, and segment rates. This notice specifically outlined the corporate bond monthly yield curve and the relevant spot segment rates for Internal Revenue Code (Code) Section 417(e)(3). Additionally, it provided 24-month average segment rates pertinent to Code Section 430(h)(2) and included interest rates for 30-year Treasury securities applicable under Code Section 417(e)(3)(A)(ii)(II) for plan years commencing prior to 2008.
Also on December 15, the IRS published Revenue Ruling 2026-2, which specified various prescribed rates for federal income tax purposes effective from January 2026. This ruling included short-, mid-, and long-term applicable federal rates for certain debt instruments, as well as housing credit appropriate percentages as per Section 42(b)(1). Additionally, it addressed the deemed rate of return for calendar year 2026 transfers made to pooled income funds in accordance with Section 642(c)(5).
On December 19, the IRS issued Notice 2026-1, providing interim guidance regarding the credit for carbon oxide sequestration under Code Section 45Q. This notice offers a safe harbor for determining eligibility for qualified carbon oxide that has been captured and disposed of in secure geological storage. This applies particularly to carbon oxide not used as a tertiary injectant in qualified enhanced oil or natural gas recovery projects during the 2025 calendar year. The safe harbor will be available if the US Environmental Protection Agency (EPA) does not activate the electronic Greenhouse Gas Reporting Tool for required submissions by June 10, 2026.
Extensions and Future Guidance
The IRS further extended the transition period for states administering paid family and medical leave (PFML) programs through Notice 2026-6, issued on December 19. This extension allows an additional year for states and employers participating in PFML programs concerning medical leave benefits attributed to employer contributions.
On December 22, the IRS released Notice 2026-3, offering relief from additions of tax for underpayments of estimated income tax under Code Sections 6654 and 6655. This relief applies to taxpayers making valid elections under Code Section 1062(a).
In a related announcement on December 22, the IRS indicated its intention to issue guidance concerning Code Section 6435. This guidance will assist taxpayers who have paid the Code Section 4081 tax on diesel fuel or kerosene and later removed this fuel as dyed fuel. The IRS has advised taxpayers to refrain from submitting any claims under Code Section 6435 until the guidance is issued in early 2026, as no claims will be processed until then.
The IRS also published its weekly list of written determinations, including Private Letter Rulings and Technical Advice Memorandums. Contributions to this information were made by Suzanne Golshanara, a law clerk in the Washington, DC, office.
These updates reflect the IRS’s ongoing efforts to clarify tax regulations and provide necessary guidance for taxpayers navigating the complexities of federal tax law.
