November 2025 Tax Regulatory Update

In September, the Treasury Department and Internal Revenue Service (IRS) issued the 2025-2026 Priority Guidance Plan. The plan outlines priority guidance projects to be addressed from July 1, 2025, through June 30, 2026. The plan emphasizes five key areas: implementation of the One Big Beautiful Bill Act (OBBBA), deregulation and burden reduction efforts, tribal tax issues, digital assets and implementation of the SECURE 2.0 Act.

In November, the IRS issued guidance addressing cryptocurrency, education, real estate, individuals, retirement and more. Please see below for more information on this month’s significant releases.[1]

Business

IRS Issues Final Guidance on Corporate Stock Buyback Tax: On Nov. 21, Treasury issued final regulations for corporate stock repurchases under the Inflation Reduction Act. The final rules clarify their application after Dec. 31, 2022, modify exceptions for reorganizations, retirement plan contributions and regulated investment companies (RICs) and real estate investment trusts (REITs). The final regulations exclude “plain vanilla” preferred stock and certain other classes of preferred stock from the tax and also include transition relief for “mandatorily redeemable preferred stock” issued prior to Aug. 16, 2022, if the corporation does not have discretion over repurchase decisions. The regulations also adjust the “netting rule” and drop the proposed “funding rule” from the April 2024 proposed regulations that would have taxed certain foreign corporate share repurchases indirectly funded by U.S. subsidiaries.​

Cryptocurrency

FAQs on Broker Reporting for Digital Assets: On Oct. 30, the IRS issued FAQs to address digital-asset broker reporting issues under section 6045 to clarify when Form 1099-DA reporting applies. The informal guidance explains that custodial services alone do not create reporting obligations, but entities such as digital asset kiosks that execute sales must report proceeds. The FAQs also address how brokers may use customer or transfer-provided acquisition information for lot ordering (but not for basis reporting), how to complete Form 1099-DA for multiple lots or NFT transactions, and when to check boxes indicating reliance on customer data. The FAQs cover management of transaction fees in digital asset exchanges, optional basis reporting, NFT sale aggregation and tests for determining whether a stablecoin qualifies as a “qualified stablecoin” under the stabilization mechanism rules.

Crypto in Investment and Grantor Trusts: On Nov. 10, Treasury and the IRS issued Revenue Procedure 2025-31, which provides a safe harbor for investment and grantor trusts using digital asset staking on proof-of-stake blockchains. Staking is defined as the practice of holding digital assets or tokens in a blockchain network to earn rewards. The guidance clarifies that staking, when conducted within prescribed limits, will not jeopardize a trust’s classification as an investment or grantor trust for tax purposes. Some of the requirements to maintain investment trust status include using only one type of digital asset, having custodial arrangements where it retains ownership and maintaining liquidity for investor redemptions. Additionally, trust interests must be traded on national securities exchanges with Securities and Exchange Commission (SEC)-approved disclosures, and trusts must have liquidity policies to meet redemption demands despite staking restrictions. Existing trusts have a nine-month window starting Nov. 10, 2025, to amend their agreements to comply. The guidance is effective for tax years ending on or after Nov. 10, 2025.

Education

Comments Requested on Tax Credits for Scholarship Granting Organizations: On Nov. 26, Treasury and the IRS issued Notice 2025-70 announcing their intent to issue guidance under section 25F, which provides a nonrefundable individual income tax credit of up to $1,700 per year for cash contributions to state-certified scholarship granting organizations (SGOs) that fund elementary and secondary education scholarships for income-limited eligible students. The notice describes statutory SGO requirements (including 501(c)(3) status, separate accounts for qualified contributions, at least 90% of income spent on scholarships, income-verification and priority rules, and prohibitions on earmarking and awards to disqualified persons) and outlines an envisioned state election, annual SGO listing and detailed certification process distinguishing single-state and multistate SGOs. It then poses targeted questions seeking comments on state policies and procedures, the meaning of “located in the state,” implementation of the state tax credit offset, interpretation of “income,” treatment of multistate and alternative organizational structures, the definition of “disqualified person,” and possible IRS reporting and recordkeeping requirements (including donor and recipient-level data). Requested comments are due by Dec. 26, 2025.

Individuals and Families

Penalty Relief Guidance for Tips and Overtime Deductions: On Nov. 5, Treasury and the IRS issued Notice 2025-62 outlining temporary penalty relief for tax year 2025 related to new information reporting requirements. Specifically, the notice provides that the IRS will not impose penalties on employers for missing or incomplete reporting with respect to tip income and overtime subject to the new deductions for such income, provided all other required information is accurate. The penalty relief is limited to 2025 returns and statements, and the IRS encouraged employers and filers to share relevant data with employees to support proper taxpayer claims on their 2025 tax returns.

Guidance for the 2026 Filing Season for Taxpayers Claiming the Tip and Overtime Deduction: On Nov. 21, Treasury and the IRS issued Notice 2025-69, providing 2025-only guidance for individuals claiming the deductions for “qualified tips” and “qualified overtime compensation,” for tax years 2025–2028. Since Forms W‑2 and 1099 for 2025 will not separately report these amounts, the notice outlines other methods employees and nonemployees may use to determine qualified tips (for example, relying on W‑2 box 7, Forms 4070, box 14 entries, Form 4137, or corroborated tip logs) and to compute the FLSA-based overtime premium component of overtime pay using pay statements and reasonable allocation fractions. The notice also provides transition relief by temporarily treating tips in listed tip-earning occupations as not from specified service trades or businesses for enforcement purposes, explains that overtime must be FLSA-required premium pay to qualify (not purely contractual or state-law extras), and confirms the deductions are unavailable to married individuals filing separately and requires a Social Security number to claim them.

International

Allocation of Foreign Income Taxes and Recognition of Pretransition Gain or Loss: On Nov. 25, Treasury and the IRS issued Notice 2025-72, announcing plans to issue regulations on the one-month deferral provision in the OBBBA for foreign corporations with a repealed one-month deferral election. The regulations will address rules to allocate foreign taxes between the required one-month short taxable year and the following taxable year and will also modify the Section 987 regulations so that pretransition gain or loss elections and related rules operate correctly in short taxable years.

Real Estate

Guidance on Loans Secured by Rural or Agricultural Real Property: On Nov. 20, Treasury and the IRS issued Notice 2025-71, providing interim rules under section 139L on the exclusion from income of 25% of interest received by lenders on loans secured by qualifying rural or agricultural real property. The guidance defines key terms (including “interest received,” “pre‑enactment loan” and “qualified rural or agricultural property”), sets rules and safe harbors for determining when and to what extent a loan is treated as secured by qualifying property (including fair market value thresholds, treatment of subsequent holders, mixed collateral, and reasonable good‑faith reliance), and provides allocation rules for refinancings, significant modifications and post‑enactment borrowings. It also clarifies that qualifying use can include seasonal agricultural or fishing operations and aquaculture facilities but excludes incidental agricultural activity. It allows taxpayers to rely on this guidance for loans made after July 4, 2025, and on or before 30 days after proposed regulations are published. The notice also requests comments on definitional issues (such as “rural or agricultural real estate” and “substantial use”), mixed‑use properties, post‑issuance changes in collateral or use, securitization structures. Public comments are due on Jan. 20, 2026.

Retirement

401(k) Limit Increases and Cost of Living Adjustments: On Nov. 13, Treasury and the IRS issued Notice 2025-67, providing the inflation-adjusted limits for various retirement accounts. Starting in 2026, employees participating in 401(k), 403(b), governmental 457 and Thrift Savings Plans can contribute up to $24,500, up $1,000 from 2025. The IRA contribution limit rises to $7,500, with the catch-up contribution for individuals aged 50 and over increasing to $1,100 under SECURE 2.0. The catch-up contribution limit for most employer-sponsored plans increases to $8,000, with a higher limit still applying to employees aged 60 to 63. The notice also includes cost-of-living increases for other retirement-related provisions of the code that are subject to inflation adjustments.

Tax Administration

Withdrawal of Rules for Furnishing Identifying Number of Tax Return Preparer: On Nov. 26, Treasury withdrew an Obama-era proposal, REG-124791-11. The regulation was proposed in 2012 and addressed the eligibility of tax return preparers to obtain a Preparer Tax Identification Number (PTIN). The proposed regulations aimed to establish two additional categories of preparers eligible for PTINs as part of a broader IRS effort to impose minimum qualification requirements on tax return preparers. The withdrawal follows a 2014 ruling by the U.S. Court of Appeals for the D.C. Circuit in Loving v. IRS, which upheld an injunction prohibiting the agency from regulating tax preparer eligibility.

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[1] This summary includes significant regulatory and other guidance issued by Treasury and the IRS. It does not include administrative or regularly scheduled guidance like monthly updates to federal interest rates.

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THIS DOCUMENT IS INTENDED TO PROVIDE YOU WITH GENERAL INFORMATION REGARDING TAX REGULATIONS FOR NOVEMBER 2025. THE CONTENTS OF THIS DOCUMENT ARE NOT INTENDED TO PROVIDE SPECIFIC LEGAL ADVICE. IF YOU HAVE ANY QUESTIONS ABOUT THE CONTENTS OF THIS DOCUMENT OR IF YOU NEED LEGAL ADVICE AS TO AN ISSUE, PLEASE CONTACT THE ATTORNEYS LISTED OR YOUR REGULAR BROWNSTEIN HYATT FARBER SCHRECK, LLP ATTORNEY. THIS COMMUNICATION MAY BE CONSIDERED ADVERTISING IN SOME JURISDICTIONS.