July 2026: IRS USA Tax Updates

IRS Simplifies Penalty Relief with Automatic Process for Eligible Taxpayers 

The IRS has introduced an automatic penalty relief process for eligible taxpayers with a strong history of filing and paying taxes on time. Rather than requiring taxpayers to submit a request, the IRS will now automatically identify qualifying taxpayers and grant first-time penalty relief where applicable. 

This initiative reduces administrative burden, improves taxpayer experience, and makes it easier for compliant taxpayers to receive the relief they deserve. 

Read the official IRS announcement: https://www.irs.gov/newsroom/irs-simplifies-penalty-relief-introduces-automatic-process-for-eligible-taxpayers 

Treasury & IRS Finalize Regulations on Certain Charitable Remainder Annuity Trust (CRAT) Transactions 

The Treasury Department and the IRS have issued final regulations designating certain Charitable Remainder Annuity Trust (CRAT) transactions as listed transactions due to concerns over abusive tax avoidance strategies. 

Taxpayers and advisors involved in these arrangements may now have additional disclosure and reporting obligations under IRS regulations. 

Read the official IRS announcement: https://www.irs.gov/newsroom/treasury-irs-issue-final-regulations-naming-certain-charitable-remainder-annuity-trust-transactions-as-listed-transactions 

IRS & Security Summit Launch Summer Series to Combat Identity Theft 

The IRS and its Security Summit partners have launched the annual “Protect Your Clients; Protect Yourself” summer campaign—a five-week educational series designed to help tax professionals strengthen cybersecurity practices and defend against identity theft. 

The campaign shares practical guidance on securing taxpayer data, recognizing phishing attempts, and implementing stronger security measures for tax practices. 

Read the official IRS announcement: https://www.irs.gov/newsroom/irs-security-summit-launch-summer-series-to-help-tax-pros-protect-clients-from-identity-theft 

IRS Announces Tax Relief for Hawaii Storm Victims 

The IRS has announced tax relief for individuals and businesses affected by severe storms in Hawaii. Eligible taxpayers now have until July 8, 2026, to meet various federal tax filing and payment deadlines that would have otherwise fallen during the disaster period. 

The relief applies automatically to taxpayers located in designated disaster areas. 

Read the official IRS announcement: https://www.irs.gov/newsroom/irs-announces-tax-relief-for-taxpayers-impacted-by-severe-storms-in-the-state-of-hawaii-various-deadlines-postponed-to-july-8-2026 

IRS Marks National Whistleblower Day with $8 Billion Recovered Since 2007

In recognition of National Whistleblower Day, the IRS highlighted the significant impact of its Whistleblower Program, which has helped recover more than $8 billion in tax revenue since the program was established in 2007. The program encourages individuals to report credible information about tax noncompliance, helping the IRS identify underreported income and unpaid taxes.

The IRS also acknowledged the important role whistleblowers play in strengthening tax compliance and maintaining the integrity of the U.S. tax system.

Read the official IRS announcement:
https://www.irs.gov/newsroom/irs-recognizes-national-whistleblower-day-with-8-billion-recovered-since-2007

Final Thoughts 

July’s IRS updates reinforce the importance of staying informed as tax administration continues to evolve. From automated penalty relief and enhanced cybersecurity guidance to new compliance requirements and disaster tax relief, these developments present valuable opportunities for firms to better support their clients while maintaining regulatory compliance. 

At Infinity Globus, we help accounting firms stay ahead of regulatory changes with dependable offshore tax and accounting support, allowing you to focus on delivering exceptional client service throughout the year.