Passage of the IRS Math and Taxpayer Help Act
Published December 5, 2025
On December 1, the Internal Revenue Service (IRS) Math and Taxpayer Help Act (H.R. 998) was signed into law. The new law aims to assist taxpayers by requiring the IRS to explain math and clerical errors found on tax returns and include a computation of the adjustments required to correct the errors.
The new law institutes a pilot program that requires the expanded notices to be sent by mail. The notices must also include the deadline to respond to the adjustment and the ability to request abatement of the tax assessed. The law requires the IRS to submit a report to Congress that includes information related to the errors and abatements.
Current IRS notices often contain generic or vague statements that the information on the tax return is incorrect, often including multiple possible issues without reference to the specific issue in the return. Internal Revenue Code 6213(b) states that IRS notices must include the error and an explanation, but this has been interpreted in various ways.
Both the American Institute of CPAs (AICPA) and the National Taxpayer Advocate applauded the passage of the IRS Math and Taxpayer Help Act. Melanie Lauridsen, the Vice President of Tax Policy & Advocacy for AICPA shared, “The IRS Math and Taxpayer Help Act represents common-sense reform that enhances IRS operations and improves the taxpayer experience. This new law directly addresses long-standing issues with how the IRS communicates and resolves mathematical or clerical errors on tax returns. By expanding access to abatement procedures and establishing a pilot program for better communication, this law provides greater fairness and due process, reduces confusion and stress and offers taxpayers improved access to remedies.”
The new law will require specific explanations and the deadline for requesting an abatement. Tax professionals believe this will empower taxpayers to better understand their returns and how to correct any errors.
National Tax Security Awareness Week
The Internal Revenue Service (IRS) and the Security Summit partners announced the 10th annual National Tax Security Awareness Week. During National Tax Security Awareness Week, the IRS and the Security Summit want to remind taxpayers and tax professionals to stay vigilant and protect personal data.
The Security Summit includes the IRS, state tax administrators, representatives of tax software companies, CPAs and other tax preparers. The Security Summit cautions taxpayers and tax professionals that the holiday season creates more opportunities for fraudsters and other identity thieves to target potential victims. As noted by IRS CEO Frank Bisignano, there is a "heightened risk of identity theft as criminals ramp up efforts to trick people into sharing sensitive personal information."
The holiday season is a prime time for fraudsters to steal information from tax professionals. This information can be used in early 2026 to file false tax returns and claim fraudulent refunds.
Bisignano further shared, “With the holiday shopping season underway and tax season quickly approaching, we are urging taxpayers and tax professionals to take extra steps to protect their financial and tax information.”
The IRS reports there has been a significant increase in fraudster activities on social media. The inaccurate tax advice on social media will mislead taxpayers. The Security Summit partners have created a Coalition Against Scam and Scheme Threats to deal with the problem.
The IRS and Security Summit partners have also jointly formed the Identity Theft Information Sharing and Analysis Center. This group has enhanced the IRS’s tax systems to spot emerging scams and coordinate responses against fraudsters.
The focus during National Tax Security Awareness Week includes:
- Social Media — There are many popular scams this year on social media. Social media scams are encouraging taxpayers to lie to receive a credit or refund.
- Phishing and Smishing — Taxpayers and advisors should be on guard for email phishing and text message smishing campaigns. Scam emails or text messages typically include a link or attachment that may harm your computer or phone and allow the thief to steal your personal information.
- Protection for Seniors — Taxpayers over the age of 65 are often targets of money scams. Taxpayers should be wary of any individual asking them to withdraw funds from a retirement account.
- Protections for Businesses and Tax Professionals — Each tax professional must have a Written Information Security Plan (WISP) and use multi-factor authentication. The WISP is a requirement of federal law and can be scaled to a large or small tax practice.
- Identity Protection PIN — Taxpayers are encouraged to obtain an Identity Protection Personal Identification Number (IP PIN). This six-digit number is known only to the taxpayer and the IRS. The PIN can be created through an IRS Online Account beginning in January. The system is currently unavailable while undergoing annual maintenance.
Tax Court Reduces Conservation Easement Value
In Mize Farm, LLC v. Commissioner; No. 8979-23, the Tax Court reduced the value of a charitable conservation easement of over $10.5 million to $379,000. The gross valuation misstatement penalty of 40% under IRC Sec. 6662(h) was applied.
Mize Farm, LLC (Mize Farm) claimed a charitable contribution deduction of over $10.5 million for a 2017 donation of a conservation easement of approximately 30 acres of undeveloped land in Demorest, Habersham County, Georgia.
The property had recently been transferred into Mize Farm as part of a syndicated conservation easement structure, where investors purchased interests in the LLC. The land was then contributed as a conservation easement to a qualified conservation organization.
The claimed deduction was based on an appraisal that assigned a “before” value of more than $10.6 million and an “after” value around $118,458, yielding the claimed easement value of $10.5 million.
The IRS challenged the valuation and asserted that the claimed deduction was grossly inflated. The IRS argued the appraisal lacked credible support, was not based on local market data and comparable land sales and that the “highest and best use” theory underpinning the high value was unrealistic.
On review, the Court found the taxpayer’s pre-donation valuation without credible support and relied on expert testimony and “nearby comparable properties” showing typical land values for similar parcels far below those assumed in the taxpayer’s appraisal. The Court agreed with the IRS’s expert valuation of $425,000.
The Court did not adopt the valuation given by any of the experts on the post-donation value. Instead, the Court found a post-donation value of $46,000, based on a comparable property that both parties’ experts used in their opinions.
The Court held the conservation easement’s fair market value was $379,000. Because the claimed deduction exceeded 200% of the Court-determined value, the Court imposed the 40% gross valuation-misstatement penalty under Sec. 6662(h).
Applicable Federal Rate of 4.6% for December: Rev. Rul. 2025-24; 2025-50 IRB 1 (17 November 2025)
The IRS has announced the Applicable Federal Rate (AFR) for December of 2025. The AFR under Sec. 7520 for the month of December is 4.6%. The rates for November of 4.6% and October of 4.6% also may be used. The highest AFR is beneficial for charitable deductions of remainder interests. The lowest AFR is best for lead trusts and life estate reserved agreements. With a gift annuity, if the annuitant desires greater tax-free payments the lowest AFR is preferable. During 2025, pooled income funds in existence less than three tax years must use a 4.0% deemed rate of return. Charitable gift receipts should state, “No goods or services were provided in exchange for this gift and the nonprofit has exclusive legal control over the gift property.”