Federal Tax

The IRS issued frequently asked questions (FAQs) addressing updates to the Premium Tax Credit. The FAQs clarified changes to repayment rules, the removal of outdated provisions and how the IRS will treat updated guidance.

Removal of Repayment Limitations

For tax years beginning after December 31, 2025, limitations on the repayment of excess advance payments of the Premium Tax Credit no longer applied.

Previously Applicable Provisions

Premium Tax Credit rules that applied only to tax years 2020 and 2021 were no longer applicable and were removed from the FAQs.

Updated FAQs

The FAQs were updated throughout for minor style clarifications, topic updates and question renumbering.

Reliance on FAQs

The FAQs were issued to provide general information to taxpayers and tax professionals and were not published in the Internal Revenue Bulletin.

Legal Authority

If an FAQ was inconsistent with the law as applied to a taxpayer’s specific circumstances, the law controlled the taxpayer’s tax liability.

Penalty Relief

Taxpayers who reasonably and in good faith relied on the FAQs were not subject to penalties that included a reasonable cause standard for relief, to the extent reliance resulted in an underpayment of tax.

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IR 2025-127

Federal Tax

The Internal Revenue Service Math and Taxpayer Help Act has advanced to the White House after passage in the Senate.

The bill, H.R. 998, was introduced in the House in February 2025 and requires the IRS to provide specific information when it sends a notice to taxpayers when there is a math or clerical error and send a notice related to an abatement of taxes assessed due to a math or clerical error, as well as provide procedures for requesting such an abatement.

It also requires the agency to implement a pilot program for sending notices on a clerical error.

The notice regarding the error must include the following information:

• A clear description of the error, including the type of error and the line in the tax return where the error occurred;
• An itemized computation of adjustments required to correct the error;
• The telephone number for the automated transcript service; and
• The deadline for requesting an abatement of any tax assessed due to the error.

IRS will be required to provide procedures to taxpayers how to request in writing, electronically, by phone, or in person an abatement of tax assessed due to a math or clerical error. The pilot program on the issuance of the math/clerical error letters will require a report to Congress.

H.R. 998 passed by unanimous consent in the Senate on October 20, 2025. It passed by a voice vote in the House of Representatives on March 31, 2025.

The American Institute of CPAs applauded passage of H.R. 998.

“The IRS Math and Taxpayer Health Act represents common-sense reform that enhances IRS operations and improves the taxpayer experience,” AICPA Vice President of Tax Policy and Advocacy Melanie Lauridsen said in a statement. “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.”

By Gregory Twachtman, Washington News Editor