IRS 2026 Tax Filing Reminder of Senior Resources
Published February 20, 2026
The Internal Revenue Service (IRS) released guidance outlining updates and key resources for seniors during the 2026 tax filing season. The IRS highlighted the new additional senior deduction, the Earned Income Tax Credit (EITC) and tax return preparation services.
Eligible taxpayers aged 65 and older may claim a new additional deduction of up to $6,000 per individual ($12,000 for married couples filing jointly when both spouses qualify). This additional amount is available regardless of whether the taxpayer itemizes or claims the standard deduction. The deduction phases out at higher modified adjusted gross income (MAGI) levels.
The IRS highlighted that the EITC is available to moderate-income workers and families. The maximum income amount eligible for the deduction for the 2025 tax year is $68,675. Credit amounts will vary based on income, family size and filing status.
In addition to deduction changes, the IRS noted the availability of free tax preparation assistance for qualified taxpayers. Programs such as Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE), as well as services offered through the AARP Foundation Tax-Aide network, provide in-person and, in some cases, virtual support for qualifying individuals. These programs can be valuable for taxpayers navigating Social Security taxation, required minimum distributions (RMDs), retirement account rollovers and other age-specific reporting considerations.
The IRS also reminds taxpayers to review income documentation and account information before filing. Taxpayers receiving Social Security benefits should ensure they have access to accurate Forms SSA-1099 or SSA-1042S, which can be obtained through their online Social Security accounts if replacements are needed. More broadly, the IRS encourages all filers to use their IRS Online Account to review payment history, prior-year adjusted gross income and other relevant data to reduce errors and processing delays.
IRS Releases FAQs About Payment Modernization
On January 27, 2026, the Internal Revenue Service (IRS) issued Fact Sheet 2026-02 providing frequently asked questions (FAQs) related to Executive Order 14247: Modernizing Payments To and From America’s Bank Account, signed on March 25, 2025. The FAQs are intended to guide taxpayers, practitioners, businesses and third-party intermediaries through the transition from paper-based payment methods to fully electronic payment and refund processes.
The FAQs provide practical information, but they are not formal published guidance. However, reasonable, good-faith reliance on the FAQs generally will not trigger penalties that are subject to reasonable cause standards. The FAQs emphasize and reiterate that the IRS will not contact taxpayers by phone or text to request banking information. Any request for banking information from the IRS will only be initiated by official IRS issued letters.
The Order mandates that nearly all payments made to and from the federal government must transition to electronic methods “to the extent permitted by law,” effective September 30, 2025. This mandate encompasses a wide array of federal transactions, including tax refunds, benefit disbursements, vendor payments, tax deposits, fees and other receipts and disbursements that have historically been made by paper check or money order.
The FAQs emphasize that this transition does not change how taxpayers prepare or file their federal tax returns; it affects the delivery of payments and refunds. Taxpayers will continue to file returns in the same manner, including electronic filing or paper filing where applicable. However, taxpayers are strongly encouraged to adopt direct deposit and other electronic payment options where available. Taxpayers are reminded to provide accurate bank account information on returns or through IRS account systems. Providing accurate bank account information will be critical to avoid processing delays, as the IRS is phasing out issuance of paper refund checks and electronic receipts and remittances are becoming the standard.
For advisors, the FAQs highlight several practical considerations. For refunds, direct deposit remains the principal electronic method. Alternative electronic payment methods are available such as digital wallets, prepaid debit card accounts and other electronic fund transfers to accommodate taxpayer circumstances.
Taxpayers without traditional bank accounts have options, including certain card-based or other digital solutions, although minimizing reliance on paper checks is a central goal. Similarly, electronic payment channels such as IRS Direct Pay, the Electronic Federal Tax Payment System (EFTPS) and other secure electronic payment pathways should be used for tax remittances to ensure compliance with the transition timeline and to reduce processing delays.
LLC’s Easement Deduction Grossly Overstated
In North Donald LA Property LLC v. Commissioner, T.C. Memo. 2026-19, the United States Tax Court scrutinized a syndicated conservation easement transaction. The Court substantially reduced the claimed charitable contribution deduction and upheld significant accuracy-related penalties.
In March 2016, North Donald LA Property LLC (North Donald), a Missouri limited liability company taxed as a partnership, purchased approximately 260 acres of agricultural land in Jefferson Davis Parish, Louisiana, as part of a larger tract known as the Donald Farm. In 2017, North Donald granted a conservation easement and claimed a charitable contribution deduction of approximately $115.4 million, with an adjusted basis of roughly $804,000. The deduction was supported by an appraisal that concluded the property’s highest and best use was commercial clay mining, despite its agricultural zoning and the absence of an established commercial clay market in the region.
The IRS issued a Notice of Final Partnership Administrative Adjustment (FPAA), denying the charitable deduction in its entirety and disallowing approximately $1.16 million in “other expenses” characterized primarily as consulting and legal fees. The IRS asserted penalties under I.R.C. Sections 6662 and 6663, including a 75% civil fraud penalty and a 40% gross valuation misstatement penalty.
At trial, the Court focused extensively on valuation methodology. Reiterating that fair market value must reflect a use that is legally permissible, physically possible, financially feasible and maximally productive use. The Court found that the appraisal’s royalty income method was unreliable, based on the lack of credible evidence that mining approvals were reasonably probable or that a commercial market existed to support projected royalties. The Court relied heavily on contemporaneous arm’s-length acquisition data and comparable sales, concluding that the easement’s impact on value was minimal.
The Court rejected the clay mining as highest and best use because it was speculative and unsupported. The resulting allowable charitable contribution deduction was approximately $175,824.
With respect to the “other expenses” deductions, the Court determined that the consulting fee paid to the transaction sponsor constituted a nondeductible syndication or organizational expense under Sec. 709. Similarly, legal fees associated with structuring the transaction and preparing related opinion materials were treated as nondeductible syndication costs.
On penalties, the Court declined to impose the civil fraud penalty, noting the partnership’s disclosure of the transaction on its return and the absence of clear and convincing evidence of fraudulent intent. However, the Court sustained the 40% gross valuation misstatement penalty under Sec. 6662(h) as the claimed value exceeded 200% of the correct amount. The Court also upheld the 20% accuracy-related penalty on the disallowed non-easement deductions.
Applicable Federal Rate of 4.8% for March: Rev. Rul. 2026-6; 2026-11 IRB 1 (17 February 2026)
The IRS has announced the Applicable Federal Rate (AFR) for March of 2026. The AFR under Sec. 7520 for the month of March is 4.8%. The rates for February of 4.6% or January of 4.6% also may be used. The highest AFR is beneficial for charitable deductions of remainder interests. The lowest AFR is best for lead trusts and life estate reserved agreements. With a gift annuity, if the annuitant desires greater tax-free payments the lowest AFR is preferable. During 2026, pooled income funds in existence less than three tax years must use a 4.0% deemed rate of return. Charitable gift receipts should state, “No goods or services were provided in exchange for this gift and the nonprofit has exclusive legal control over the gift property.”
