2025-2026 Treasury-IRS Priority Guidance Plan

On September 30, 2025, the Treasury Department and the IRS released the first Priority Guidance Plan in the current Trump Administration for the plan year from July 1, 2025, through June 30, 2026.  Similar to past Plans, the introduction to the 2025-2026 Plan states:

“The 2025-2026 Priority Guidance Plan contains 105 guidance projects that are priorities for allocating Treasury Department and IRS resources during the 12-month period from July 1, 2025, through June 30, 2026 (plan year). Of these projects, 11 have been released or published as of August 31, 2025. The projects on the plan will be the focus of our efforts during the plan year. However, the plan does not provide any deadline for completing the projects.“

The similarities with earlier Plans end there.   The fact that this Plan might be different from prior Plans does not come as a surprise.  The change in content was foreshadowed in the annual IRS Notice requesting input from the public. 

Change Signaled In Advance

Each spring Treasury and the IRS issue a Notice inviting the public to recommend items to be included on the Plan.  Typically the Notice asks responders to consider with respect to any suggestions they might submit whether the proposed guidance (1) resolves significant issues relevant to a broad class of taxpayers, (2) reduces controversy and lessens the burden on taxpayers or the IRS, (3) relates to recently enacted legislation, (4) involves existing regulations or other guidance that is outdated, unnecessary, ineffective, insufficient, or unnecessarily burdensome and that should be modified, streamlined, expanded, replaced, or withdrawn, (5) promotes sound tax administration, (6) can be administered by the IRS on a uniform basis, and (7) can be drafted in a manner that will enable taxpayers to easily understand and apply the guidance.  See, e.g., IRS Notice 2024-28. 

While this year’s Notice retained most of those considerations, it started with an emphasis on two Executive Orders that direct a reduction in regulations rather than additions.  Notice 2025-19 asked readers to recommend guidance that relates to regulations potentially described in Executive Order 14219.  Specifically, the Notice asked responders to identify guidance that (1) may be unconstitutional, raising serious constitutional difficulties, such as “exceeding the scope of the power vested in the Federal Government by the Constitution,” (2) may be based on unlawful delegations of legislative power, (3) doesn’t reflect the “best reading” of the underlying statute, (4) implicates matters of social, political, or economic significance that are not authorized by clear statutory authority, (5) imposes significant costs on private parties that are not outweighed by public benefits, (6) impedes technological innovation, infrastructure development, disaster response, inflation reduction, research and development, economic development, energy production, land use, and foreign policy objectives, and (7) imposes undue burdens on small business and impedes private enterprise and entrepreneurship.

Notice 2025-19 also references Executive Order 14192, which states, “[u]nless prohibited by law, whenever an executive department or agency (agency) publicly proposes for notice and comment or otherwise promulgates a new regulation, it shall identify at least 10 existing regulations to be repealed.”  This represents a significant increase from President Trump’s first term, in which agencies were asked to remove two regulations for every new regulation promulgated.  Even that rule was honored in the breach.  Nevertheless, Treasury and the IRS have already identified nearly a hundred regulations for removal.  See Notices 2025-22, 2025-23, and 2025-36.     

A Narrower, More Targeted Plan

The introduction to the 2025-2026 Plan notes a focus on five key areas: (1) implementation of the One, Big, Beautiful Bill Act (40 projects), (2) deregulation and burden reduction (46 projects), (3) guidance addressing Tribal tax issues (3 projects), (4) guidance addressing digital assets (6 projects), and (5) guidance addressing the SECURE 2.0 Act (8 projects).  The Plan only includes 2 projects that do not fall within one of the five priority areas, both under the heading “Section 501(c)(3) Issues” and calling for:

1. Guidance on the application of the fundamental public policy against racial discrimination, including consideration of recent caselaw, in determining the eligibility of private schools for recognition of tax-exempt status under §501(c)(3).
2. Guidance on the statutory prohibition in §501(c)(3) against participation or intervention in political campaigns (the “Johnson Amendment”).

Both of these new projects are connected to ongoing litigation and aimed at policy issues which either aim to politicize or depoliticize the IRS, depending on your point of view.

While we are used to seeing the Plan divided into substantive areas, such as “Corporations and Their Shareholders,” “Employee Benefits,” “Financial Institutions and Products,” and “Gifts and Estates and Trusts,” there are no such headings (other than the five key areas and the 501(c)(3) issues) in this year’s Plan. 

In contrast to the 2024-2025 Plan, which listed 231 projects to be addressed during the fiscal year, the 2025-2026 Plan contains only 105 projects.  Relevant to our practice, the 2025-2026 Plan includes only a single project relating to the estate tax, Item 6 on the One Big, Beautiful Bill Act Implementation list:

6.  Regulations under §2010 regarding extension and enhancement of increased estate and gift tax exemption amounts and related issues. 

Recall that the statutory changes to Internal Revenue Code section 2010 are straightforward:

• Change the amount of the basic exclusion from $5,000,000 to $15,000,000
• Change the starting year for indexing from any year after 2011 to any year after 2026
• Change the base year for indexing from 2010 to 2025, and
• Eliminate the sunset provision. 

It is unclear what additional regulatory guidance would be needed under section 2010 to interpret or implement these statutory changes.

Abandoned Projects

The 2024-2025 Plan had the following twelve projects under the heading Gifts and Estates and Trusts:

1. Regulations under §645 pertaining to the duration of an election to treat certain revocable trusts as part of an estate.
2. Final regulations under §§1014(f) and 6035 regarding basis consistency between estate and person acquiring property from decedent. Proposed and temporary regulations were published on March 4, 2016.
3. Regulations under §2010 addressing whether gifts that are includible in the gross estate should be excepted from the special rule of §20.2010-1(c). Proposed regulations were published on April 27, 2022.
4. Regulations under §2032(a) regarding imposition of restrictions on estate assets during the six-month alternate valuation period. Proposed regulations were published on November 18, 2011.
5. Final regulations under §2053 regarding the deductibility of certain interest expenses and amounts paid under a personal guarantee, certain substantiation requirements, and the applicability of present value concepts in determining the amount deductible. Proposed regulations were published on June 28, 2022.
6. Guidance regarding amounts qualifying as distributions of income exempt from estate tax under §2056A.
7. Regulations under §20.2056A-2 for qualified domestic trust elections on estate tax returns, updating obsolete references.
8. Regulations under §2632 providing guidance governing the allocation of generation-skipping transfer (GST) exemption in the event the IRS grants relief under §2642(g), as well as addressing the definition of a GST trust under §2632(c), and providing ordering rules when GST exemption is allocated in excess of the transferor’s remaining exemption.
9. Regulations under §2642 regarding the redetermination of the inclusion ratio on the sale of an interest in a trust for GST exemption purposes.
10. Final regulations under §2801 regarding the tax imposed on U.S. citizens and residents who receive gifts or bequests from certain expatriates. Proposed regulations were published on September 10, 2015.
11. Final regulations under §6011 identifying a transaction involving certain uses of charitable remainder annuity trusts as a listed transaction. Proposed regulations were published on March 25, 2024.
12. Guidance updating the user fee for estate tax closing letters.

Some of these projects were on the Plan for over a decade (like number 4 on the list), while others were relatively new to the Plan (like numbers 6 and 9). Of the twelve projects on last year’s Plan, five were completed in 2024 or 2025, namely numbers 2, 7, 10, 11, and 12.

Looking Ahead

The fate of the remaining projects from the 2024-2025 Plan is unknown but assumed to be grim.  The 2025-2026 Plan notes: “Some projects that were on the 2024-2025 Priority Guidance Plan are not included on the 2025-2026 plan because they do not belong to one of these priority categories for purposes of allocating resources during the 2025-2026 plan year.  Some of those projects may be considered for inclusion on a future priority guidance plan.” 

The IRS Chief Counsel’s Office, which has responsibility for drafting guidance, among other things, lost 13% of its personnel between January and June 2025 through the deferred resignation program, termination of probationary employees, retirements, and voluntary departures. Considering the reductions in staff at the IRS it is not surprising that the Plan is less ambitious this year.  However, the reduction in planned guidance cannot be ascribed solely to a lack of personnel.  Rather, the Plan illustrates the Administration’s passion for deregulation, as well as a realistic view that guidance implementing the most recent legislation will take priority over long-pending projects. 

In light of the slimmed down and focused Plan combined with the Executive Orders calling for deregulation, don’t expect much guidance in the “Gifts and Estates and Trusts” areas in the coming year.  Practitioners should not anticipate publication of projects listed as priorities on last year’s Plan to be published anytime soon.  On the other hand, IRS personnel remaining in the estate and gift tax branch in the National Office should have ample time to work on private letter ruling requests!