There is always something changing in the tax world. Most business owners do not need to follow every IRS announcement or court case, nor should they.
What matters is knowing when something changes enough that you need to act.
A few developments this year fall into that category. Some may require attention now. Others are worth keeping in mind if they affect your business later.
New Automatic Penalty Exemption Being Phased In
A new IRS process should make life a little easier for taxpayers with a good compliance history.
Historically, taxpayers who qualified for First Time Abate generally had to ask the IRS to remove certain penalties. In summer 2026, the IRS began phasing in a separate Automatic Exemption from Penalty (AEP) process for eligible original returns, starting with 2025 annual returns and 2026 quarterly returns.
Under AEP, the IRS generally will not assess certain failure-to-file, failure-to-pay, and failure-to-deposit penalties when an eligible taxpayer meets the required compliance-history rules.
There is a catch worth knowing about.
AEP does not replace every basis for relief. A taxpayer who does not qualify for AEP may still be entitled to relief based on reasonable cause.
That is why we would not recommend simply ignoring a penalty notice and assuming the IRS will take care of it. During the transition, some taxpayers who qualify may still receive penalty notices, and others may have reasonable cause grounds. If a penalty notice arrives, understand what caused the penalty and what options you have before deciding how to respond.
BOI Reporting Is Over for Most U.S. Businesses
After a lot of starts, stops and uncertainty, most domestic businesses can finally take Beneficial Ownership Information (BOI) reporting off their compliance lists.
Under FinCEN’s final rule, effective August 14, 2026, entities created in the United States are exempt from BOI reporting. U.S. persons generally do not need to provide beneficial ownership information either.
There is still an important exception. Certain entities formed outside the United States and registered to do business here may continue to have reporting obligations.
So, for a typical U.S. business, there is likely nothing more to do. If your structure includes a foreign entity registered in the United States, it is worth checking before assuming the same rule applies.
BOI scams have not disappeared either. Be cautious with unsolicited payment requests, unfamiliar forms or QR codes claiming a fee is required to file with FinCEN.
Limited Partners and Self-Employment Tax: An Issue Worth Watching
There is an interesting issue working its way through the courts that could matter to some partnership owners.
It centers on when a limited partner’s share of partnership income is subject to self-employment tax.
Recent decisions agree that a state law title alone does not necessarily answer the federal tax question, but the courts do not yet apply a uniform test.
The Tax Court’s Soroban line of cases asks whether the partner functions as a passive investor. In August 2026, however, the Fifth Circuit’s revised Sirius Solutions opinion rejected that test and instead focused on whether the partner plays a significant role in managing or running the business.
That makes the partner’s management role, services, compensation arrangements, and applicable appellate jurisdiction especially important.
This is not something every partnership needs to react to. But if significant amounts of partnership income are being treated as subject to self-employment tax, the treatment may be worth reviewing.
In some cases, a timely protective refund claim may also make sense while litigation continues, but that decision depends on the facts, jurisdiction, and applicable limitations period The point is not to predict the outcome. It is to avoid losing an opportunity if the law ultimately develops in the taxpayer’s favor.
Still Waiting on an ERC Claim? Watch the Deadline
The Employee Retention Credit is one of those tax issues that seems determined to stick around.
As of the week ending August 29, 2026, the IRS reported about 14,900 claims remaining in its inventory. Many were under audit, awaiting review of a disallowance response, or in Appeals.
If your business is one of them, there is an important point to understand.
An administrative appeal does not necessarily stop the clock on your ability to file a refund suit.
Generally, the two-year period for filing a refund suit begins when the IRS mails a notice of disallowance.A business can continue working with the IRS during that time, but the administrative process does not automatically extend the deadline.
An executed Form 907 may extend the deadline in certain situations. Simply submitting the form does not secure the extension; both the taxpayer and the IRS generally must execute it before the existing limitations period expires.
If you have an unresolved ERC claim and received a disallowance letter, find that letter and make sure the date is tracked. At this point, protecting the deadline can be just as important as arguing about the merits of the claim.
Information Reporting Changes in 2026
Businesses should also be aware of a few changes affecting information returns.
For third-party network transactions, the Form 1099-K reporting threshold is again more than $20,000 and more than 200 transactions. Beginning with payments made in 2026, the threshold for many payments reported on Forms 1099-NEC and 1099-MISC increases from $600 to $2,000, although some categories retain different thresholds.
Those thresholds determine when a form needs to be issued. They do not determine whether the underlying income is taxable.
That distinction can create reconciliation problems when the forms received by a business do not match its books. Keeping clean records remains important even when no information return is issued.
For businesses paying independent contractors or receiving payments through third-party platforms, it is worth making sure accounting and reporting processes reflect the current rules.
Expect More Scrutiny of Conservation Easements
Conservation easements have been on the IRS’s radar for years, and that attention is not going away.
On August 19, 2026, the IRS announced a new Office of Conservation Easements to centralize technical expertise and coordinate policy, enforcement, and case-resolution strategy.
For anyone considering a conservation easement, that is another reason to get the right people involved before the transaction is completed.
These situations can involve much more than the tax deduction itself. Valuation, appraisals, partnership agreements, insurance arrangements and documentation can all come under scrutiny.
It is also an area where several advisors may need to be at the table. Your CPA, attorney, appraiser, and other specialists may each have an important role depending on the transaction.
So, What Actually Needs Your Attention?
Not every tax development needs a response. We tend to think about issues like these in three ways.
- Some require action. You received a notice, have a filing deadline, or need to make a decision before an opportunity closes.
- Some require you to protect your position. The answer is not settled yet, but keeping good records or making a protective filing today could preserve your options later.
- And some simply need to be watched. Nothing needs to change today, but you want to know if the facts or the law change.
For most business owners, that is more practical than trying to keep up with every new ruling. The important part is knowing which developments actually affect your business and when waiting could cause you to lose an option.
Have questions about any of these developments or an IRS issue affecting your business? Contact your YHB advisor. We can help you determine what needs attention now, what can wait, and when it makes sense to bring in legal counsel or another specialist.