IRS Seeks Suggestions for 2026-2027 Priority Guidance Plan

The IRS has published its annual request for public input on the 2026-2027 Priority Guidance Plan — the blueprint that determines which regulations, revenue rulings, and administrative guidance the IRS will develop over the coming fiscal year. For tax practitioners, this annual process represents the single most direct mechanism to influence IRS rulemaking: topics included in the Priority Guidance Plan receive dedicated resources and target publication dates, while those excluded may wait years for clarity.

The 2026-2027 cycle carries unusual urgency because the One Big Beautiful Bill Act created dozens of new provisions requiring implementing regulations — and the IRS cannot address all of them simultaneously. Which provisions receive priority directly determines which areas of practice gain clarity and which remain in interpretive limbo.

Why the Priority Guidance Plan Matters

The IRS has over 380 outstanding guidance projects — a backlog that grows with each new tax bill. The Priority Guidance Plan forces prioritization:

Included projects: Receive dedicated attorney and economist resources from the Office of Chief Counsel, have target completion dates (typically 12-18 months), and often produce proposed regulations followed by final regulations.

Excluded projects: Languish in the backlog indefinitely. Some have waited 5-10 years for guidance. Practitioners operating in these areas must take filing positions without IRS clarity — accepting risk that future guidance may contradict their interpretation.

The allocation problem: The IRS has approximately 1,100 attorneys in Chief Counsel and 200 economists — a fixed resource pool that must address: new legislation implementation, existing guidance updates, litigation support, private letter ruling requests, and technical advice to field agents. Priority Guidance Plan items compete for this scarce capacity.

Key Topics for 2026-2027 Suggestions

Based on practitioner surveys, comment letter analysis, and AICPA/ABA/TEI formal requests, the highest-demand guidance areas:

1. OBBBA Implementation (Top Priority)

The One Big Beautiful Bill Act created or modified 47 Code sections requiring implementing regulations. The most urgently needed:

• Trump Account rules (Section 138G): Custodian requirements, qualified expense definitions, coordination with existing savings vehicles
• Expanded CTC (Section 24): Advance payment mechanics for the increased $2,500 credit, phase-out thresholds, and identification requirements
• Paid Leave Credit (Section 45S): AICPA's 14-point guidance request (area median income calculation, qualifying leave definitions, PEO treatment)
• Small Business Health Insurance Deduction: Qualifying plan requirements, employee eligibility criteria, and interaction with ACA marketplace subsidies
• Increased SALT Cap: Implementation of the $40,000 SALT deduction cap increase (from $10,000), including married-filing-separately allocation

2. Digital Asset Reporting

• 1099-DA implementation (Section 6045A): Broker definition clarity, DeFi protocol reporting obligations, cost basis tracking transfer between platforms, and de minimis exceptions
• Digital asset lending regulations: Whether lending crypto triggers disposal, interest income treatment for DeFi yields, and staking reward income timing
• Stablecoin-specific guidance: Whether stablecoin transactions constitute "dispositions" (potentially generating hundreds of trivial gain/loss events daily)

3. Section 174 R&D Amortization

Since 2022, R&D expenses must be amortized over 5 years (domestic) or 15 years (foreign) rather than expensed immediately. The change devastated startup cash flows. Guidance needed on:

• Definition of "research or experimental expenditures" (overbroad interpretation capturing routine software development)
• Treatment of failed R&D projects (still amortize over 5 years despite producing no benefit?)
• Interaction with R&D credit (Section 41) when expenses are amortized rather than deducted

4. AI and Automation in Tax

Emerging area where practitioners seek clarity:

• Can AI-prepared returns satisfy preparer due diligence requirements (Section 6694)?
• Does AI-generated tax advice constitute "practice before the IRS" under Circular 230?
• What documentation must preparers maintain when relying on AI for research and positions?

How to Submit Effective Suggestions

TIGTA data shows that approximately 200-300 formal suggestions are received each year, with 15-20% ultimately included in the final plan. Suggestions most likely to be accepted:

Cite specific Code sections affected by the ambiguity (don't just say "we need crypto guidance" — cite Section 6045A, Section 1001, Section 61(a)(3) specifically)

Describe the compliance failure — what are practitioners doing wrong or inconsistently because of the absence of guidance?

Quantify the affected population — how many taxpayers, returns, or dollars are impacted?

Propose a solution — don't just identify the problem; suggest the answer you'd like to see

Submit through organizations — AICPA, state CPA societies, and ABA Tax Section submissions carry more weight than individual letters because they represent consensus professional positions

Why This Matters

For firm technical leaders: Review the current open guidance projects (published quarterly in the Internal Revenue Bulletin) and identify which affect your client base most acutely. Submit suggestions through your professional organization or directly if the impact is firm-specific.

For tax controversy practitioners: Pending guidance in litigated areas affects settlement strategy. If guidance is expected within 12 months, it may favor waiting rather than settling — or create urgency to settle before guidance contradicts your position.

For tax technology companies: Guidance plan items signal where IRS systems will change. If 1099-DA reporting guidance is prioritized, platform developers should begin building reporting capabilities immediately — before final rules are published and compliance timelines compress.

For clients with open questions: If your client's tax position depends on unpublished guidance, document the position thoroughly, disclose the uncertainty, and monitor the Priority Guidance Plan for inclusion of relevant projects. Being able to say "we took this position before guidance existed and disclosed it" provides penalty protection.

The key takeaway: The IRS Priority Guidance Plan is the tax profession's annual opportunity to determine which of 380+ outstanding regulatory projects actually get completed — practitioners who submit specific, well-reasoned suggestions through professional organizations have measurable influence over which areas of ambiguity receive clarity in the next 12-18 months.