If you filed for an extension earlier this year, like me, you’re probably thinking about taxes again. Millions of taxpayers who requested more time are now working on their returns, and that October 15 deadline will arrive sooner than you think.

Filing a tax return is only one part of our tax system. What happens when you need to reach the IRS? When your refund is delayed? Or when the person you paid to prepare your return turns out to be the problem?

Those are some of the issues behind the Taxpayer Assistance and Service Act, a bipartisan bill that would make more than 60 changes to the way taxpayers interact with the IRS. Among other things, it would expand Tax Court jurisdiction, strengthen protections for taxpayers harmed by bad preparers, and impose new requirements on some paid tax return preparers. The Senate Finance Committee approved the package earlier this summer, and it was placed on the Senate Legislative Calendar this month. The full Senate still has to act, and the House would have to agree before it becomes law, but there’s strong support for changing how taxpayers interact with the IRS.

Protections for taxpayers matter because tax laws can be complex and constantly changing.

One example? The IRS has finalized rules for the new deduction for interest paid on certain new-car loans. The deduction, created by the One Big Beautiful Bill Act (OBBBA), is available for tax years 2025 through 2028 and can be worth up to $10,000 per return. The vehicle must be new and meet a U.S. final-assembly requirement, and the loan must have been taken out after December 31, 2024. There are also income phaseouts, rules for refinancing and mixed-use vehicles, and limits on what counts when dealers roll other costs—or old debt—into a new loan.

Taxpayers and preparers got an early look at the 2026 Form 1040. The draft asks whether taxpayers and spouses filing jointly are U.S. citizens, U.S. nationals, or otherwise lawfully authorized to work in the United States. That’s an unusual question for Form 1040 because immigration and work-authorization rules don’t necessarily align with federal tax rules. And a new Schedule 3-A uses an even different standard (whether someone is a citizen, national, or “qualified alien”) to determine the treatment of certain refundable credits.

For now, though, it’s still a draft, and we’re waiting for the IRS to release the final forms and instructions.

The IRS also announced additional relief for farmers and ranchers affected by drought. Ordinarily, farmers forced to sell certain livestock because of drought or other qualifying weather conditions have four years to replace those animals if they want to postpone recognizing gain. When drought conditions persist, the IRS can extend that replacement period—and it has done so. The qualifying list is long, including 49 states (Alaska is the only state that didn’t make the list).

How the tax system works matters just as much as the tax laws. For more than two decades, the Taxpayer Advocacy Panel (TAP) has given ordinary taxpayers a way to flag problems and suggest improvements to the IRS. TAP volunteers have weighed in on issues ranging from confusing notices and identity verification to callback technology and tax forms. Now, the IRS says TAP, in its current form, will end on November 30 and be replaced by a broader, more technology-focused public engagement model.

If this week is any indication, the next tax filing season could be quite the ride. But let’s not say that too loudly while tax pros are still trying to get through 2025 tax returns.

Let’s talk more tax.

Q: I know what a tax lien is (I think). I got an email about buying tax liens to make money. I don’t understand how that works exactly. Can you explain it?

A: A federal tax lien is the government’s legal claim against your assets because you have unpaid federal taxes. It generally attaches to your current and future property.

However, a tax lien sale is generally focused on unpaid local property taxes, not federal income taxes.

Instead of waiting for the property owner to pay the delinquent property tax bill, the local government sells the lien to an investor and gets its money upfront. The investor buys the right to collect the unpaid property taxes plus interest and, depending on local law, other amounts. If the homeowner pays the debt during the redemption period, the investor gets back the amount invested plus interest. If the property taxes remain unpaid, the investor may eventually begin foreclosure proceedings and potentially acquire the property.

The upside is the potential return from interest and other amounts—or, in some cases, eventually acquiring the property. The risks include buying a lien on a property worth very little, running into liens with priority over yours, or dealing with a lengthy, complicated foreclosure process. 

Estimated tax is how you pay income and certain other taxes during the year when enough tax isn’t being withheld from your income. That often includes people who are self-employed, freelancers, business owners, or investors, but it can also include employees whose withholding simply doesn’t cover their tax bill. 

The federal income tax system is pay-as-you-go, which means you generally can’t wait until you file your return to pay everything you owe with one big check. Instead, you generally make estimated tax payments using Form 1040-ES. How much you need to pay depends on your expected income, deductions, credits, and withholding for the year. If your income is relatively steady throughout the year, that typically means four equal payments, due April 15, June 15, September 15, and January 15.

If you pay too little during the year, you may owe an underpayment penalty even if you pay your entire tax bill by the April filing deadline. Safe harbor rules can help you avoid that penalty. Generally, you need to have paid at least 90% of the tax due for the current year or 100% of the tax shown on the prior-year return, whichever is smaller. (For certain higher-income taxpayers, that prior-year threshold increases to 110%.)

The IRS once tried to regulate paid tax return preparers. In Loving v. IRS, a federal appeals court ruled that the IRS lacked authority under the statute it relied on. When was that statute originally enacted?

A. 1884
B. 1913
C. 1939
D. 1954

Find the answer at the bottom of this newsletter.

This week, meet Lily Tran, an Enrolled Agent and founder and CEO of TaxUSign® and the Taxpayer CARE Center in Kent, Washington. Lily talks about how she found her way into tax, the tax myths she’d like to bust, the issues she thinks deserve more attention, and the advice about making sure you’re “climbing the right mountain” that has stuck with her.

If you know someone who should be featured in a future Getting To Know You Tuesday, you’ll find nomination and submission information at the bottom of the post.

Take a look at your charitable giving for the year, but don't automatically reach for your checkbook. If you plan to make charitable gifts before year-end and own stocks or other investments that have increased significantly in value, now is a good time to consider whether donating appreciated assets makes more tax sense than giving cash. Starting now also gives you time to coordinate with the charity or consider tools like a donor-advised fund instead of trying to move assets during the last few days of December.

October 15, 2026 — Extended individual income tax returns due. This is the big one for individuals who requested a timely extension to file their 2025 Form 1040. (Remember, it’s an extension to file, not to pay: tax was due April 15.)

October 15, 2026 — Extended C corporation returns due. Calendar-year corporations that timely requested an extension generally must file Form 1120. 

September 29 — Advisory Amplified, Minneapolis, MN
I’m headed to Advisory Amplified in Minneapolis à la Mary Tyler Moore.  As someone who runs my own firm, I totally get that conferences can be expensive. So if you’re a solo, too, register using this code for 20% off: Taxgirl-roadie

September 30–October 1 — NATP Tax Forum, Philadelphia, PA
Practitioner-focused federal tax education covering S corporations, rentals, planning, compliance, and more. And obviously in a great city!

IRS warns on fake “Tribal Tax Credits.” The IRS is warning about promoters selling purported “Tribal Tax Credits” they claim can reduce federal tax bills or generate refunds. One important problem: the credits don’t exist under federal law.

Former IRS employee accused of filing false returns for drug dealers. Federal prosecutors have charged a former IRS employee and tax preparer with allegedly creating fictitious businesses to disguise clients’ drug income as legitimate business income and then claiming improper business deductions to reduce their taxes. He faces 12 counts of preparing false returns and money laundering.

Romance scams, sextortion, and $2.5 million. A Nigerian national pleaded guilty to money laundering for his role in romance scams and sextortion schemes that targeted approximately 150 Americans. Prosecutors say the schemes generated more than $2.5 million, with proceeds moved through peer-to-peer payment apps and cryptocurrency wallets.

The tax world is full of interesting people. Here’s who’s making news.

Jeffrey Reed has joined K&L Gates as a partner in the firm’s Corporate practice in New York. Reed, who joins from Kilpatrick Townsend & Stockton, focuses on state and local tax planning and controversies, with particular experience in New York and Massachusetts.

The Senate Finance Committee will meet Thursday, September 24, at 10 a.m. ET in the 215 Dirksen Senate Office Building to consider the nominations of James Gadwood to serve as IRS Chief Counsel and Andrew De Mello to serve as a U.S. Tax Court judge. Opening statements and a live video of the hearing will be available on www.finance.senate.gov.  

The answer is A. 1884. 

The law dates back to the administration of President Chester A. Arthur. The provision was originally enacted as part of an 1884 law addressing claims for horses and other property lost in military service. Congress authorized the Treasury to regulate the agents and attorneys representing those claimants, in part because of concerns about unscrupulous claims agents. More than a century later, that same statutory authority was at the center of Loving v. IRS, the case that limited the IRS’s ability to regulate paid tax return preparers.

There’s just a few days left until October, which means two things in my world: extended tax returns are due and baseball playoff season. There’s something about these last few games—watching the standings, doing the math, and knowing that one great night (or one terrible inning) can change everything.

So, while some of you are counting down to October 15, I’ll be doing that, too. But I’ll also be counting wins, losses, and games back. (For the Phillies, the magic number is 2.)

See you next week.

Have thoughts about the newsletter? I’d love to hear what you liked, what you didn’t, and what you’d like to see more of. You can email me here.