The OMB’s Office of Information and Regulatory Analysis has determined that these regulations are not subject to review under section 6(b) of Executive Order 12866.

Pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6), it is hereby certified that these final regulations will not have a significant economic impact on a substantial number of small entities. These regulations, which amend the amount of a fee to obtain a particular service, affect decedents’ estates, which generally are not small entities as defined under 5 U.S.C. 601(6). Thus, these regulations have no economic impact on small entities. In addition, the final regulations will establish a $76 fee, which is not substantial enough to have a significant economic impact on any entities that could be affected by establishing such a fee. Accordingly, the Secretary certifies that the rule will not have a significant economic impact on a substantial number of small entities.

Section 202 of the Unfunded Mandates Reform Act of 1995 requires that agencies assess anticipated costs and benefits and take certain other actions before issuing a final rule that includes any Federal mandate that may result in expenditures in any one year by a State, local, or Tribal government, in the aggregate, or by the private sector, of $100 million in 1995 dollars, updated annually for inflation. These final regulations do not include any Federal mandate that may result in expenditures by State, local, or Tribal governments, or by the private sector in excess of that threshold.

Executive Order 13132 (Federalism) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial, direct compliance costs on State and local governments, and is not required by statute, or preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Executive order. These final regulations do not have federalism implications and do not impose substantial direct compliance costs on State and local governments or preempt State law within the meaning of the Executive order.

Pursuant to section 7805(f) of the Internal Revenue Code, the notice of proposed rulemaking that preceded these final regulations was submitted to the Chief Counsel for the Office of Advocacy of the Small Business Administration for comment on its impact on small business. No comments were received on the proposed regulations.

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), the Office of Information and Regulatory Affairs designated this rule as not a major rule, as defined by 5 U.S.C. 804(2).

Section 70204 of Public Law 119-21, 139 Stat. 72 (July 4, 2025), commonly referred to as the One, Big, Beautiful Bill Act (OBBBA), added new sections 530A, 128, 139J, and 6434 to the Code. Section 530A provides for the establishment of a Trump account for an eligible individual and rules regarding Trump accounts.

In accordance with section 7805(e)(1), concurrent with the publication of this Treasury Decision, the Department of the Treasury (Treasury Department) and the IRS are publishing in the Proposed Rules section of this issue of the Federal Register a notice of proposed rulemaking (CC-00226466-26) containing proposed regulations under section 530A at proposed §§ 1.530A-1 and 1.530A-7 (the proposed regulations), the text of which, except for the applicability provisions, is the same as the text of §§ 1.530A-1T and 1.530A-7T of the temporary regulations.

Interested persons are directed to the ADDRESSES and Comments and Requests for a Public Hearing sections of the preamble to CC-00226466-26 for information on submitting public comments or requesting a public hearing on the proposed regulations.

A Trump account is a type of traditional IRA established under section 530A for the exclusive benefit of an eligible individual or such eligible individual’s beneficiaries. An eligible individual is any individual (i) who has not attained age 18 before the close of the calendar year in which an election to establish an initial Trump account is made, (ii) for whom a social security number (within the meaning of section 24(h)(7)) has been issued before the date on which the election is made, and (iii) for whom an election is made either by the Secretary or, if the Secretary has not made an election, by a person other than the Secretary at the time and in the manner prescribed by the Secretary.

After an election is made, an initial Trump account is created or organized by the Secretary for the eligible individual. After an initial Trump account has been established, a subsequent Trump account (rollover Trump account) may be established for the account beneficiary during the period that begins when such initial Trump account is established and ends on December 31 of the calendar year in which the account beneficiary¹ of the initial Trump account attains age 17 (growth period). A rollover Trump account must be funded by a qualified rollover contribution, which is a trustee-to-trustee transfer of the entire account balance from the account beneficiary’s existing Trump account.²

Section 530A(a) generally treats Trump accounts in the same manner as traditional IRAs under section 408(a), except as otherwise provided in section 530A or under regulations or guidance provided by the Secretary. Special rules contained in section 530A that do not apply to other traditional IRAs include rules regarding contributions, investments, distributions, and reporting. After the growth period, most of the special rules no longer apply and the rules under section 408 governing traditional IRAs generally apply.

One type of contribution permitted during the growth period is a qualified general contribution, which is a contribution made by the Secretary and funded by a general funding contribution from a State (or political subdivision thereof), the United States, the District of Columbia, an Indian Tribal government, or a section 501(c)(3) tax-exempt organization. The contribution is distributed to the Trump accounts of account beneficiaries who are members of a qualified class. Under section 530A(f), a qualified general contribution must be made pursuant to a general funding contribution, must be made to each account beneficiary in the qualified class, and must be made in an equal amount for each account beneficiary in that class. The statute provides broad, objective criteria to describe the qualified classes of account beneficiaries whose Trump accounts can receive the qualified general contribution.

Section 139J provides that qualified general contributions to a Trump account are not includible in the gross income of the account beneficiary when made.

On December 2, 2025, the Treasury Department and the IRS issued Notice 2025-68, 2025-52 IRB 856, which informed taxpayers that the Treasury Department and the IRS intend to propose regulations under section 530A and related provisions. The notice addressed initial questions regarding Trump accounts, including elections to establish initial Trump accounts, anticipated annual reporting, qualified rollover contribution reporting, trustee-to-trustee information, and account beneficiary disclosures. The notice also requested comments.

On March 9, 2026, the Treasury Department and the IRS published a notice of proposed rulemaking (NPRM) (REG-117270-25) in the Federal Register (91 FR 11194) containing proposed regulations (§§ 1.530A-1 through 1.530A-6) that would provide guidance on making an election to establish a Trump account and reserve additional sections for further guidance on Trump accounts (prior § 1.530A-1 NPRM). The NPRM published in the Proposed Rules section of this issue of the Federal Register withdraws the prior § 1.530A-1 NPRM.

On March 9, 2026, the Treasury Department and the IRS also published a notice of proposed rulemaking (REG-117002-25) in the Federal Register (91 FR 11203) containing a proposed regulation (§ 301.6434-1) that would provide guidance on the Trump accounts contribution pilot program under section 6434 under which the Trump accounts of eligible children can receive $1,000 pilot program contributions.

On July 13, 2026, the Treasury Department and the IRS published Rev. Proc. 2026-25, 2026-29 IRB 45, which provides a transfer tax safe harbor for certain individual donors who make one or more contributions to Trump accounts established under section 530A.

On August 11, 2026, the Treasury Department and the IRS published a notice of proposed rulemaking (REG-101355-26) in the Federal Register (91 FR 51611) containing proposed regulations (§§ 1.128-1 through 1.128-3, 1.129-1 and 1.129-2) that would provide guidance on employer contributions to Trump accounts under section 128, including applicable nondiscrimination rules, and the nondiscrimination rules for dependent care assistance programs under section 129.

On August 21, 2026, the Treasury Department and the IRS published a notice of proposed rulemaking (CC-00349938-26) in the Federal Register (91 FR 54280) containing a proposed regulation (§ 1.530A-3) that would provide guidance on eligible investments, which are the only assets in which Trump account funds may be invested during the growth period.

A. Overview

Section 1.530A-1T provides definitions related to Trump accounts, general requirements for Trump accounts, rules for establishment of an initial Trump account, including auto enrollment by the Secretary, and rules for auto accounts and claiming an auto account.

B. Definitions

Section 1.530A-1T(b) includes definitions of the terms account beneficiary, eligible individual, qualified ABLE rollover contribution, qualified general contribution, qualified rollover contribution, Trump account, and Secretary that are consistent with sections 530A(b)(4), 530A(b)(2), 530A(d)(4)(B), 530A(f), 530A(e), 530A(b)(1), and 7701(a)(11)(B), respectively.

Section 1.530A-1T(b)(3) defines the term growth period as the period that begins when the account beneficiary’s initial Trump account described in § 1.530A-1T(b)(5)(i) or (ii) is established and ends on December 31 of the calendar year in which the account beneficiary attains age 17. This definition is provided for ease of reference and reflects the statutory concept of the period before the first day of the calendar year in which the account beneficiary attains age 18.

Section 1.530A-1T(b)(4) defines the term IRA as an individual retirement account under section 408(a), including a custodial account treated as a trust under section 408(h) but, consistently with section 530A(b)(1), does not include an individual retirement annuity under section 408(b).

Section 1.530A-1T(b)(5) defines the terms initial Trump account, auto account, and claimed initial Trump account. An initial Trump account is a Trump account created or organized by the Secretary pursuant to section 530A(b)(1)(A)(i) and maintained by a trustee selected by the Secretary pursuant to section 530A(g). The definition of initial Trump account covers three types of initial Trump accounts. The first type of initial Trump account is any Trump account that is established when a person other than the Secretary makes an election (using Form 4547, Trump Account Election(s), or successor form, or through an electronic application or webpage) and activates the account before auto enrollment by the Secretary. The second type of initial Trump account is an auto account, which is an initial Trump account created or organized pursuant to an election made by the Secretary under § 1.530A-1T(d)(2). The third type of initial Trump account is a claimed initial Trump account, which is an initial Trump account created or organized by the Secretary to receive a qualified rollover contribution from an auto account. These definitions identify the different ways in which a taxpayer can establish a Trump account created or organized by the Secretary, and also distinguish an initial Trump account from a rollover Trump account established under section 530A(b)(1)(A)(ii).

Section 1.530A-1T(b)(6) defines the term master group trust as a trust established by the Secretary for the exclusive benefit of account beneficiaries of auto accounts for the purpose of holding investments of auto accounts that meets the applicable requirements of Rev. Rul. 81-100, 1981-1 C.B. 326, as modified, and is exempt from taxation under section 408(e).³

Section 1.530A-1T(b)(10) provides that the term qualified stock contribution, which is a type of qualified general contribution, is defined in § 1.530A-7T(b)(9).

Section 1.530A-1T(b)(11) defines the term responsible party as the person who is authorized under the terms of the written governing instrument for a Trump account to act on behalf of the account beneficiary. A person’s status as a responsible party under the written governing instrument does not, by itself, establish that the person is entitled under section 6103 to inspect or receive the account beneficiary’s returns or return information.

Section 1.530A-1T(b)(12) defines the term rollover Trump account as a Trump account that is not an initial Trump account and that is created or organized in the United States and established for the account beneficiary during his or her growth period pursuant to section 530A(b)(1)(A)(ii). A rollover Trump account must first be funded by a qualified rollover contribution from the account beneficiary’s existing Trump account before receiving any other contribution. Because a qualified rollover contribution is a direct trustee-to-trustee transfer of the entire Trump account balance, an account beneficiary may have only one funded Trump account at a time.

Section 1.530A-1T(b)(14) defines the term traditional IRA as an IRA that is not a Roth IRA under section 408A.

C. General Requirements for a Trump Account

Section 1.530A-1T(c)(1) provides that a Trump account is a type of traditional IRA described in section 530A(b)(1) for the exclusive benefit of an eligible individual and, after the death of the individual, his or her beneficiaries. A Trump account can be either an initial Trump account or a rollover Trump account.

Section 1.530A-1T(c)(2) provides rules for the written governing instrument of a Trump account. Except as otherwise provided, the written governing instrument must satisfy the requirements of section 408(a)(1) through (6), which apply to other IRAs, and the requirements of section 530A(b)(1)(C)(i) through (iii), which apply only to Trump accounts. The written governing instrument must reflect both the rules that apply during the growth period and the rules that apply after the growth period.

Section 1.530A-1T(c)(2)(ii) also requires the written governing instrument to clearly designate the account as a Trump account at the time of its establishment. Accordingly, an existing account, such as an IRA that is not a Trump account, may not be amended to become a Trump account. In addition, the account must be titled to clearly identify the account as a Trump account for the benefit of the account beneficiary.

With respect to the growth period, the written governing instrument generally must restrict the timing and annual amount of contributions in accordance with section 530A(b)(1)(C)(i) and prohibit contributions under a Simplified Employee Pension (SEP) arrangement under section 408(k) or a Savings Incentive Match Plan for Employees (SIMPLE) IRA plan under section 408(p) in accordance with section 530A(h)(1). Additionally, the written governing instrument must prohibit distributions in accordance with section 530A(b)(1)(C)(ii), and require the funds in the account to be invested only in eligible investments in accordance with section 530A(b)(1)(C)(iii), as applied under § 1.530A-7T(d). A Trump account satisfies the cash contribution requirement in section 408(a)(1) if, except in the case of a qualified rollover contribution, the written governing instrument provides that no contribution will be accepted unless it is in cash or is qualified stock received in a qualified stock contribution described in § 1.530A-7T(d).

With respect to the period after the growth period, the written governing instrument must satisfy the requirements of section 408(a)(1) through (6) and the prohibition in section 530A(h)(1) against receiving contributions under a SEP arrangement under section 408(k) or a SIMPLE IRA plan under section 408(p), which continues to apply after the growth period.⁴

Section 1.530A-1T(c)(3) provides, under the authority of section 408(a)(2), that any person approved by the IRS as of December 31, 2025, to be a nonbank trustee of an IRA is automatically approved to be a nonbank trustee of a Trump account.

Section 1.530A-1T(c)(4) provides that a Trump account is subject to special rules that differ from the rules for other traditional IRAs, including rules relating to contributions, investments, distributions, and reporting. After the growth period, the rules under section 408 that apply to other traditional IRAs generally apply to Trump accounts, except as provided in section 530A(h).

For the avoidance of doubt, § 1.530A-1T(c)(5) provides that for purposes of section 530A, an individual attains an age on the individual’s birthday, and not the day before the individual’s birthday. For example, a child born on January 1, 2009, attains age 18 on January 1, 2027.

Section 1.530A-1T(c)(6) provides that a funded Trump account may not be closed during the growth period unless all assets have first been distributed in a distribution permissible under section 530A(b)(1)(C)(ii). The distribution restrictions of section 530A(b)(1)(C)(ii) do not apply after the growth period and therefore those restrictions do not prevent closing a Trump account after the growth period, whether funded or unfunded. It also provides that an unfunded Trump account that is not an auto account may be closed by the trustee after the growth period if provided by the terms of the written governing instrument.

D. Establishment of Initial Trump Accounts

1. Methods to establish an initial Trump account

Section 1.530A-1T(d)(1) explains the three methods by which an initial Trump account may be established. Under the first method provided in § 1.530A-1T(d)(1)(i), an auto account is established pursuant to an election by the Secretary to establish an auto account in accordance with section 530A(b)(2)(C)(i).

Under the second method provided in § 1.530A-1T(d)(1)(ii), an initial Trump account is established pursuant to an irrevocable election by a person other than the Secretary (such as by using Form 4547 or the electronic application or webpage made available by the Secretary) in accordance with section 530A(b)(2)(C)(ii). It is anticipated that elections under the first method will generally eliminate the need for any election by a person other than the Secretary; however, this second method is available for any rare exceptions. Section 1.530A-1T(d)(1)(iii) includes a deemed election to address situations where an election was made to establish an initial Trump account and the account was activated, but the election was not made by a person authorized to make the election under the applicable instructions. Under this provision, the Secretary is deemed to have made the election to establish the initial Trump account. Thus, the account does not cease to be a Trump account solely because the individual who submitted the election was not authorized to do so. Such an account is not an auto account.

Under the third method provided in § 1.530A-1T(d)(1)(iv), claiming an auto account pursuant to § 1.530A-1T(f) can result in the establishment of a claimed initial Trump account to receive the funds from the auto account. See section I.F. of this Explanation of Provisions regarding other methods to claim an auto account. The claimed initial Trump account is an entirely different account from the auto account. For example, an auto account can only receive qualified general contributions and the $1,000 pilot program contribution (if a pilot program election has been made by a pilot program-electing individual pursuant to section 6434) while a claimed initial Trump account can receive any contribution that is permitted to be made to a Trump account (such as a contribution from the family of the account beneficiary or from an employer).

2. Auto Enrollment

Under the prior § 1.530A-1 NPRM (91 FR at 11196), elections to establish an initial Trump account generally would be made by persons other than the Secretary pursuant to section 530A(b)(2)(C)(ii). Although the prior § 1.530A-1 NPRM acknowledged that section 530A(b)(2)(C)(i) authorizes the Secretary to make an election to establish an initial Trump account, those proposed regulations contemplated that the Secretary’s exercise of that authority would be limited to instances in which the Secretary is deemed to have made an election when an election was submitted by a person who was not authorized to make the election (91 FR at 11197). That proposed approach reflected the need to issue the proposed regulations promptly in order to implement Trump accounts by the July 4, 2026, date on which contributions could first be made. Given the limited time available, the Treasury Department and the IRS were unable to fully resolve the legal and administrative issues associated with implementing broad automatic enrollment, including the need to prevent the unauthorized disclosure of return information.

Many commenters expressed strong support for auto enrollment of initial Trump accounts. Commenters urged the Secretary to make an election for each individual who satisfies the statutory age and social security number requirements, using information available from tax returns, Social Security Administration records, and other authorized sources. Commenters stated that requiring an affirmative election by a person other than the Secretary would reduce participation, particularly among nonfilers, families unfamiliar with tax procedures, and families with limited time or resources to complete a separate enrollment process. Commenters also stated that an eligible individual should not lose the opportunity to receive contributions or investment growth merely because no adult completed an election.

Following the publication of the prior § 1.530A-1 NPRM, and after considering the public comments supporting automatic enrollment, the Treasury Department and the IRS further considered how to address the legal and operational issues identified in that NPRM. In coordination with the Treasury Department’s financial agent and other governmental agencies, the Treasury Department and the IRS have identified an administrable structure under which the Secretary can make elections for eligible individuals while preserving separate IRA ownership and protecting return information from disclosure. This change in approach therefore reflects the development of a different administrative structure, rather than a change in the Treasury Department and the IRS’s interpretation of the authority conferred by section 530A(b)(2)(C)(i).

Under this structure, a separate initial Trump account is established for each eligible individual pursuant to a separate written governing instrument, and separate account-level records are maintained for each account, which are referred to as auto accounts. Contributions are received and recorded by the individual auto account, and the assets attributable to auto accounts are invested collectively through a master group trust that is intended to satisfy the applicable requirements of Rev. Rul. 81-100, as modified. Each auto account holds an undivided proportionate beneficial interest in the investments held through the master group trust that are attributable to contributions allocated to qualified classes of which the account beneficiary was a member and any $1,000 pilot program contribution (if a pilot program election has been made by a pilot program-electing individual pursuant to section 6434) made to that account, and records maintained for the Trump accounts program identify the assets attributable to each auto account. The structure thus combines separate account ownership and account-level recordkeeping with collective investment and administration.

The master group trust addresses the concerns reflected in the prior § 1.530A-1 NPRM about disclosure of return information because investments are held and administered at the master-group-trust level.⁵ Thus, the trustee of the master group trust can execute transactions for the trust without receiving or disclosing account-identifying return information for each account beneficiary in connection with each transaction. Return information used to identify eligible individuals and establish auto accounts is retained in a safeguarded environment by the Secretary and his financial agent authorized to receive that information on the Secretary’s behalf.

In addition, a person seeking to claim an auto account must independently submit the information required by the Secretary, authenticate the person’s identity, establish the person’s legal authority to act with respect to the account and to receive the account beneficiary’s return information, and execute any consent required for disclosures necessary to process the claim and transfer the account balance. This process permits an authorized person to claim and control the account without disclosing protected account information before the person’s legal authority to that information has been established.

Accordingly, after considering the comments and developing this new administrable structure, § 1.530A-1T(d)(2)(i) provides for auto enrollment through the Secretary making the election to establish an initial Trump account. Section 1.530A-1T(d)(2)(ii) provides that any account established after auto enrollment has begun pursuant to an election under § 1.530A-1T(d)(1)(i) through (iii) will be an auto account. To effectuate auto enrollment, on or about October 1, 2026, the Secretary will make an election to establish an auto account for each individual who the Secretary has determined satisfies the age and social security number requirements and for whom no prior election has been made by a person other than the Secretary. An auto account shall be established for each such individual. Thereafter, the Secretary will make subsequent periodic elections to establish auto accounts for individuals who the Secretary determines satisfy those requirements and for whom no prior election has been made by a person other than the Secretary, and will establish auto accounts for eligible individuals for whom a Trump account has not been established. It is anticipated that such periodic elections will be frequent enough to generally eliminate the need for any election by a person other than the Secretary.

3. Account Activation Is Required to Establish the Initial Trump Account

Section 1.530A-1T(d)(3) clarifies that an election under § 1.530A-1T(d)(1)(ii) (for example, using Form 4547) does not by itself establish an initial Trump account (and contributions cannot be made until the account is established). In order to establish an initial Trump account that is not an auto account, the account must be activated by the person making the election or claim pursuant to instructions from the trustee after the election is made. Account activation (which includes signing the account agreement for the initial Trump account) is generally the last step in the establishment of an initial Trump account.

The Secretary, as the responsible party, is deemed to have activated each auto account with the trustee selected by the Secretary pursuant to section 530A(g), and no separate action by anyone is required for the auto account to be established.

Making a claim with respect to an auto account pursuant to § 1.530A-1T(f) (for example, using the electronic app) does not by itself establish a claimed initial Trump account. The qualified rollover contribution from the auto account or other contributions to the account cannot be made until the account is established. In order to establish a claimed initial Trump account, the account must be activated pursuant to instructions from the trustee after the claim is made. See section I.F. of this Explanation of Provisions regarding making a claim with respect to an auto account.

E. Administration of Auto Accounts

Section 1.530A-1T(e) provides rules regarding the administration of auto accounts.

During the growth period, an auto account may accept only qualified general contributions under section 530A(f), including qualified stock contributions, and a $1,000 pilot program contribution (if a pilot program election has been made by a pilot program-electing individual pursuant to section 6434). While the Secretary cannot make a pilot program election for the $1,000 pilot program contribution under section 6434, in limited circumstances where a pilot program election has been made by a pilot program-electing individual pursuant to section 6434, but an account was not activated, the auto account will be able to receive the $1,000 pilot program contribution. After the growth period, an auto account generally may not accept contributions. This limitation permits auto accounts to receive Treasury-administered contributions while the Secretary remains the responsible party and while account-identifying information is maintained in a safeguarded environment. It also avoids requiring disclosure of account information to a person seeking to act for the account beneficiary before that person’s identity, legal authority to act for the beneficiary, and entitlement under section 6103 to receive the beneficiary’s return information have been established.

Section 1.530A-1T(e)(3) provides that an auto account’s sole investment is its equitable interest in the master group trust, and the written governing instrument for the auto account must provide that the auto account adopts the provisions of the master group trust.⁶ The master group trust may hold only eligible investments described in section 530A(b)(3), cash to the extent permitted under section 530A(b)(1)(C)(iii), and qualified stock contributed pursuant to a qualified stock contribution described in § 1.530A-7T(d), including successor qualified stock. See section II.D. of this Explanation of Provisions regarding qualified stock contributions. With respect to the eligible investment requirement in section 530A(b)(1)(C)(iii), each auto account’s interest in the master group trust consists of its undivided proportionate beneficial interest in those investments of the master group trust that are attributable to contributions allocated to qualified classes of which the account beneficiary was a member and any $1,000 pilot program contribution (if a pilot program election has been made by a pilot program-electing individual pursuant to section 6434) made to that account.

It is anticipated neither the trustee of the master group trust nor the Secretary, acting in the Secretary’s capacity as responsible party, has discretion with respect to voting or other corporate actions involving those assets. This approach permits those matters to be administered on a uniform basis for all affected auto accounts without requiring individualized directions with respect to each account. The treatment of stock, cash, or other property received by reason of owning qualified stock is governed by § 1.530A-7T(d). See section II.D. of this Explanation of Provisions.

Section 1.530A-1T(e)(3)(ii) requires the trustee of the master group trust to sell qualified stock within a reasonable period after the end of the applicable minimum holding period described in § 1.530A-7T(d)(3) and promptly invest the proceeds in an eligible investment described in section 530A(b)(3). Providing a reasonable period for the sale, rather than requiring a sale on a specified date, permits the trustee to conduct an orderly disposition and reduces the potential market effects of predictable, concentrated sales. Investment of the proceeds is treated as prompt if it occurs within 30 calendar days after the sale.

Section 1.530A-1T(e)(4) provides rules for closing an unfunded auto account after its growth period or once the auto account has been claimed and funds have been transferred out (as in a trustee-to-trustee transfer). See § 1.530A-1T(c)(6) for rules regarding closing a Trump account that is not an auto account.

Section 1.530A-1T(e)(5) also provides that, if an account beneficiary dies during the growth period before the account beneficiary’s funded auto account has been claimed, the account will cease to be a Trump account on the day that the account beneficiary dies but will remain an IRA, which still may be claimed pursuant to § 1.530A-1T(f). The fact that the account remains an IRA even after the account ceases to be a Trump account is a special rule limited to the situation in which an account beneficiary of a funded auto account dies during the growth period. The estate of the account beneficiary will be the beneficiary of the auto account. However, if the auto account is unfunded when the account beneficiary dies, the account will be closed pursuant to § 1.530A-1T(e)(4).

The Treasury Department and the IRS anticipate that reporting rules for Trump accounts, including reporting rules relevant to auto accounts, will be addressed in future guidance.

F. Claiming an Auto Account

1. In General

Section 1.530A-1T(f) provides rules for claiming an auto account. A guardian or legal custodian having authority under applicable law to manage the account beneficiary’s property or financial affairs, or an account beneficiary with legal capacity (for example, having attained the age of majority, or become emancipated, under applicable State law), may claim an auto account through an electronic application or web page made available by the Secretary, in accordance with applicable instructions.

Claiming an auto account is the process by which a person establishes legal authority under applicable law to act with respect to an auto account and, before receiving protected account information, establishes authority under section 6103 to receive the account beneficiary’s return information. The information required to establish authority under section 6103 is more extensive than what is required by Form 4547. Because the existence of an auto account and account-identifying information maintained by the Secretary or an authorized agent in connection with administration of the account constitutes return information protected by section 6103, a person claiming an auto account must independently provide the information required by the Secretary, authenticate the person’s identity, establish the required legal authority under section 6103, and separately execute any consent required under section 6103(c) for disclosure of specified return information needed to process the claim and transfer the account balance to the receiving trustee.

During the growth period, claiming an auto account results in the entire balance of the auto account being transferred in a qualified rollover contribution to either a claimed initial Trump account of the account beneficiary (which is maintained by a trustee selected by the Secretary pursuant to section 530A(g)) or a rollover Trump account of the account beneficiary (which is maintained by a trustee other than the trustee(s) selected by the Secretary). After the growth period, claiming an auto account results in the entire balance of the auto account being transferred to an IRA of the account beneficiary.

As explained in section I.D.3. of this Explanation of Provisions, making a claim with respect to an auto account pursuant to § 1.530A-1T(f) does not by itself establish a claimed initial Trump account, and a qualified rollover contribution from the auto account or other contributions cannot be made until the account is established. In order to establish a claimed initial Trump account, the account must be activated (pursuant to instructions from the trustee to the person making the claim) after the claim is made.

If a claim is made under § 1.530A-1T(f)(1) but a receiving account is not yet established in accordance with applicable instructions (for example, if the claimed initial Trump account is not established because the account is not activated (that is, the account agreement is not signed pursuant to the trustee’s instructions)), the auto account balance will remain in the auto account until a receiving account is established and the transfer can be completed. Until a receiving account is established, another claim may be made under § 1.530A-1T(f)(1). In that case, the transfer will be made pursuant to the claim for which a receiving account is first established and ready to receive the transfer.

Section 1.530A-1T(f)(2) provides that, until there has been a transfer of funds from the auto account into a receiving account, another claim may be filed. If multiple claims are filed with respect to an auto account, the responsible party for the claimed initial Trump account will be the first person who activates the account.

Section 1.530A-1T(f)(3) provides a special rule for unfunded auto accounts that permits the claiming process to establish a claimed initial Trump account or rollover Trump account even if no contribution has yet been made to the auto account.

Section 1.530A-1T(f)(4) provides that, if a guardian or legal custodian having authority under applicable law to manage the account beneficiary’s property or financial affairs makes a claim for the auto account, that person generally will be the initial responsible party of the receiving Trump account when that account is established. To the extent provided under the written governing instrument and applicable law, the responsible party will have authority, while the account beneficiary does not have legal capacity, to select among eligible investments if more than one eligible investment is offered, direct a transfer for a qualified rollover contribution, direct a transfer for a qualified ABLE⁷ rollover contribution under section 530A(d)(4), and select a successor responsible party for the account.

Section 1.530A-1T(f)(5) provides that, if the account beneficiary dies before the auto account has been claimed, a person authorized under applicable law to act with respect to the account beneficiary’s estate or property may claim the funds through an electronic application or web page made available by the Secretary, in accordance with applicable instructions, provided that the person also establishes entitlement under section 6103(e)(3) and (7), or other applicable authority, to receive the decedent’s return information.

A. Overview

Section 1.530A-7T provides definitions related to qualified general contributions, rules for qualified general contributions (including qualified general contributions that use an approved class or that consist of qualified stock), and rules for determining whether a general funding contribution furthers an exempt purpose.

B. Definitions

Section 1.530A-7T(b)(1) defines the term approved class as a class consisting of not less than 5,000 account beneficiaries that includes all account beneficiaries who are still in their growth period when the contribution is made, reside in one or more States or other qualified geographic areas specified by the terms of and on the record date(s) provided in the Treasury acceptance agreement, and were born in one or more calendar years specified in the Treasury acceptance agreement.

Section 1.530A-7T(b)(2) defines the term eligible donor consistently with section 530A(f)(2)(A) as an entity described in section 170(c)(1) (other than a possession of the United States or a political subdivision of a possession), an Indian Tribal government, or an organization described in section 501(c)(3) and exempt from tax under section 501(a).

Section 1.530A-7T(b)(3) defines the term general funding contribution consistently with section 530A(f)(2), and treats an approved class as a qualified class for purposes of this definition. See section II.C. of this Explanation of Provisions regarding treatment of an approved class as a qualified class.

Section 1.530A-7T(b)(4) provides that the term minimum holding period requirement is the period of time described in § 1.530A-7T(d)(3) during which the qualified stock may not be sold or otherwise disposed of.

Section 1.530A-7T(b)(5) defines the term qualified class consistently with section 530A(f)(3), clarifying that a contribution is made when it is made to the Trump account. A contribution is made to the Trump account when it is received by the Trump account, and not when the contribution is announced by the eligible donor or when the general funding contribution is received by the Treasury Department.

Section 1.530A-7T(b)(6) defines the term qualified general contribution consistently with section 530A(f)(1) and § 1.530A-7T(c). In accordance with § 1.530A-7T(c)(3)(ii) and (iii) and (c)(4)(ii), it provides that a qualified general contribution includes an approved class contribution, which is a qualified general contribution that uses an approved class, and that a qualified general contribution includes a qualified stock contribution.

Section 1.530A-7T(b)(7) defines the term qualified geographic area as provided in section 530A(f)(3)(B).

Section 1.530A-7T(b)(8) defines the term qualified stock as stock that is publicly traded, issued by a domestic corporation, and not subject to any pre-existing transfer restrictions, such as being a restricted security as defined in 17 CFR 230.144(a)(3), in each case as determined when it is contributed to the Treasury Department as part of a general funding contribution.

Section 1.530A-7T(b)(9) defines the term qualified stock contribution as a qualified general contribution of qualified stock that satisfies the requirements of § 1.530A-7T(c) and (d).

Section 1.530A-7T(b)(10) defines the term record date as one or more dates specified in a Treasury acceptance agreement as of which the Secretary determines the account beneficiaries whose Trump accounts are eligible to receive a qualified general contribution.

Section 1.530A-7T(b)(11) defines the term Treasury acceptance agreement as the written agreement or other documentation pursuant to which the Secretary accepts a general funding contribution.

C. Qualified General Contributions

Section 1.530A-7T(c)(1) provides that a contribution is a qualified general contribution only if it satisfies the requirements in § 1.530A-7T(c)(2) through (4). These requirements track the requirements of section 530A(f)(1)(A) through (C) that the contribution be made by the Secretary pursuant to a general funding contribution, be made to the Trump accounts of account beneficiaries in a qualified class, and be made in an equal amount for each account beneficiary in that class.

In accordance with section 530A(f)(1)(A), § 1.530A-7T(c)(2) provides rules for the Secretary’s acceptance of a general funding contribution and the Secretary’s subsequent making of qualified general contributions to Trump accounts. First, an eligible donor seeking to make a general funding contribution submits a request on the form prescribed by the Secretary or through an electronic application or web page made available by the Secretary. Second, the Secretary reviews the request and may, in the Secretary’s sole discretion, approve the request after determining that the request satisfies the requirements of § 1.530A-7T and considering objective criteria, including the cost of implementation, the operational feasibility of the contribution, and the potential impact of other Federal laws (such as securities laws). Third, if the Secretary approves the request, the Secretary and the donor will enter into a Treasury acceptance agreement that contains information required by the Secretary, including the aggregate amount of funding, the qualified class, the record date, and, if applicable, information about the qualified stock.

Because the eligible donor makes a general funding contribution to the Secretary, and the Secretary then makes a qualified general contribution only to certain Trump accounts, there must be a clear process for acceptance, allocation, transfer, and overall administration. Section 1.530A-7T(c)(2) provides clear and administrable rules to implement these aspects of the two-step contribution structure contemplated by section 530A(f). These rules provide eligible donors and the Treasury Department with certainty and ensure consistent treatment of all members of the qualified class. The Treasury Department anticipates releasing more information about the request form.

In accordance with section 530A(f)(1)(B), § 1.530A-7T(c)(3)(i) provides that qualified general contributions can only be made to Trump accounts of account beneficiaries in a qualified class. The section clarifies that the qualified class must be the qualified class that is set forth in the Treasury acceptance agreement, even if the donor request form identified a different group of account beneficiaries.

Section 1.530A-7T(c)(3)(ii) and (c)(4)(ii) provides that, for purposes of section 530A(f)(1)(B) and (C), respectively, an approved class is treated as a qualified class. Section 530A(f) is designed to permit broad-based contributions to Trump accounts rather than contributions selected on an account-by-account basis. The approved-class rule implements that design by permitting only classes that are defined using a combination of objective criteria consisting of the qualified class-based criteria used in section 530A(f)(3): the account beneficiary must be in the growth period, must reside in one or more States or other qualified geographic areas specified in the Treasury acceptance agreement, and must have been born in one or more specified calendar years. The rule also requires the class to consist of not less than 5,000 account beneficiaries in order to be consistent with the same minimum class size requirement reflected in the qualified geographic area requirement of section 530A(f)(3)(B).

The Treasury Department and the IRS have determined that treating an approved class as a qualified class is consistent with section 530A(f) because the rule furthers the statutory objective of broad, equal-per-beneficiary funding while allowing contributions to be administered using objective criteria that can be verified from Treasury Department records. For example, a contribution for all account beneficiaries born in specified years and residing in a specified State or qualified geographic area may serve a broad class of account beneficiaries while permitting the eligible donor and the Secretary to define the class with enough specificity for administrable funding and allocation.

Section 1.530A-7T(c)(3)(iii) provides that a qualified general contribution generally must be made in cash to a Trump account. An exception applies for qualified stock contributed as part of a qualified stock contribution that satisfies § 1.530A-7T(d).

Section 1.530A-7T(c)(4) provides that a qualified general contribution must be made in an equal amount to the Trump account of each account beneficiary in the qualified class. Details regarding the form and amount of the qualified general contributions will be addressed in the Treasury acceptance agreement. The equal-amount requirement applies to all account beneficiaries in the qualified class as of the applicable record date and, if multiple record dates are used, across all applicable record dates. The account beneficiaries included in the qualified class are determined based on information obtained during the election process under § 1.530A-1T(d)(1)(i) and (ii), as updated by information reported to the Secretary under section 530A(i).

D. Qualified Stock Contributions

1. In General

To facilitate certain stock donations from eligible donors, the temporary regulations provide rules for qualified stock contributions. A qualified stock contribution is a contribution of qualified stock. Qualified stock is publicly traded stock that is issued by a domestic corporation and meets the other requirements set forth in § 1.530A-7T(b)(8).

Section 530A(b)(1)(C)(iii) provides that, during the growth period, the funds in a Trump account may be invested only in eligible investments described in section 530A(b)(3). Holding qualified stock received pursuant to a qualified stock contribution does not violate this restriction because no funds in the account are used to acquire the contributed stock. Rather, the stock is contributed directly into the individual Trump accounts for the beneficiaries in the designated qualified class.

Pursuant to the regulatory authority conferred in section 530A(a) to provide exceptions to the rules of section 408(a), the temporary regulations also provide an exception from the section 408(a)(1) requirement that non-rollover contributions to an IRA must be in cash for a qualified stock contribution. The Treasury Department and the IRS have determined that these limited exceptions for qualified stock contributions will facilitate more donations from eligible donors, and will help create a practical pathway for large-scale private giving to support the Trump account program and the account beneficiaries with Trump accounts.

Qualified stock that is contributed to a Trump account is subject to a minimum holding period requirement in § 1.530A-7T(d)(3). Pursuant to the minimum holding period requirement, the stock may not be sold before the earlier of (i) the date that is 5 years after the qualified stock contribution to the account, and (ii) the end of the growth period for the account beneficiary of that account. If the qualified stock is disposed of in violation of the minimum holding period requirement, the trustee must repurchase the same number of shares of the same class of qualified stock that were sold or otherwise disposed of as soon as practicable. However, the qualified stock may be disposed of during the required minimum holding period to effectuate a qualified ABLE rollover contribution, to effectuate a qualified rollover contribution when fractional shares cannot be transferred in kind (for example, if fractional shares cannot be transferred as part of a qualified rollover contribution, the transferring trustee may sell the fractional shares and transfer cash as part of the qualified rollover contribution instead), to accept a tender offer for the qualified stock at the direction of the responsible party, or if the issuer of the qualified stock is acquired for cash (by merger, purchase, or otherwise). See § 1.530A-7T(d)(3)(iv).

Section 1.530A-7T(d)(4) provides qualified stock treatment for certain stock received by the Trump account by reason of owning qualified stock (successor qualified stock).

Section 1.530A-7T(d)(5) and (d)(6) provides specific rules on the consequences of the qualified stock being delisted from a national securities exchange and the receipt of property from corporate distributions on the qualified stock, generally requiring that the trustee must promptly sell or dispose of the qualified stock or the property that was distributed, invest the net proceeds and any distributed cash in eligible investments described in section 530A(b)(3), and disclose how the proceeds were invested to the account beneficiary.

Section 1.530A-7T(d)(7) provides that an auto account’s equitable interest in qualified stock in the master group trust is treated as qualified stock.

E. Tax Implications of Contributions

A general funding contribution, by definition, is made to the Secretary for distribution to a broad class that is defined by objective criteria pursuant to the terms of a Treasury acceptance agreement meant to advance the Trump account program. Thus, § 1.530A-7T(e)(1) provides that with regard to a person making a contribution to an eligible donor that is an organization described in section 501(c)(3) and exempt from tax under section 501(a) to fund a general funding contribution satisfying the requirements of § 1.530A-7T, that person’s contribution is deductible under section 170, subject to the other requirements of that section. Similarly, § 1.530A-7T(e)(1) provides that, with regard to individuals making a gift to any organization qualifying as an eligible donor for purposes of section 530A, whether or not that eligible donor subsequently makes a general funding contribution, the gift is to an organization described in section 2522.

Section 1.530A-7T(e)(2)(i) provides that an organization described in section 501(c)(3) and exempt from tax under section 501(a) furthers one or more of its purposes described in section 501(c)(3) by providing a general funding contribution. These rules apply whether the organization provides the amount directly or provides the amount through a distribution from a donor advised fund. These rules provide certainty for eligible donors that funding contributions distributed to the qualified class or approved class outlined in the Treasury acceptance agreement will not affect that charity’s exempt purpose. The use of a qualified class or an approved class furthers this purpose because the class is broad, is defined using objective statutory criteria, and includes every account beneficiary satisfying those objective criteria.

Section 1.530A-7T(e)(2)(ii) provides that an eligible donor making a general funding contribution is making an expenditure for a purpose specified in section 170(c)(2)(B). Section 1.530A-7T(e)(2)(ii) also provides that a general funding contribution is neither a grant to an individual for purposes of section 4945 nor a distribution to a natural person for purposes of section 4966. Section 4945(d)(4) generally requires a private foundation to exercise expenditure responsibility with respect to certain grants. Similarly, section 4966(c)(1)(B)(ii) generally requires a sponsoring organization to exercise expenditure responsibility with respect to certain distributions from a donor advised fund. To provide certainty to eligible donors, § 1.530A-7T(e)(2)(ii) also provides that, to the extent that an obligation to exercise expenditure responsibility arises under sections 4945 or 4966, an eligible donor that makes a general funding contribution that satisfies the requirements of that section is treated, for purposes of sections 4945 and 4966, as exercising expenditure responsibility in accordance with section 4945(h). This treatment is based on the safeguards applicable to general funding contributions, including the requirements governing the Treasury acceptance agreement; the requirement that the contribution be made exclusively for one or more purposes specified in section 170(c)(2)(B) and further one or more exempt purposes described in section 501(c)(3); and the reporting requirements under sections 530A(i) and 4945(h)(3). These rules apply whether the donor makes the contribution directly or through a donor advised fund.

Section 553(b)(3)(B) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)(3)(B)) provides that advance notice and the opportunity for public comment are not required with respect to a rulemaking when an “agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.” The Treasury Department and the IRS find that good cause exists for issuing these temporary regulations without prior notice-and-comment because following notice-and-comment procedures before these regulations take effect would be impracticable and contrary to the public interest.

OBBBA added section 530A to the Code. Section 70204 of OBBBA generally applies to taxable years beginning after December 31, 2025. Although contributions to Trump accounts were prohibited before July 4, 2026, contributions may now be made to Trump accounts.

OBBBA created a new statutory account structure for eligible individuals. The rules in § 1.530A-1T are necessary to implement that structure immediately. Section 530A provides that an initial Trump account must be created or organized by the Secretary and designated as a Trump account, and permits the Secretary to make the election to establish an initial Trump account. Section 1.530A-1T provides the procedures needed for the Secretary to exercise that authority, for trustees to identify whether an account is an initial Trump account or a rollover Trump account, for auto accounts to be established and administered, and for a guardian or legal custodian having authority under applicable law to manage the account beneficiary’s property or financial affairs, or an account beneficiary, if the account beneficiary has legal capacity, to claim an auto account and direct a permitted transfer. Without immediately effective rules, there would be no uniform framework for determining when an initial Trump account has been established, which account is the account beneficiary’s initial Trump account, how auto enrollment by the Secretary would work, how a responsible party is identified, or how an auto account may be claimed and transferred. Those issues must be resolved before trustees and the Secretary can administer Trump accounts as required by section 530A and before contributions can be accepted and properly directed.

Immediate effectiveness is particularly important for the auto account rules in § 1.530A-1T. After publication of the prior § 1.530A-1 NPRM, commenters urged the Treasury Department and the IRS to provide for broader auto enrollment of initial Trump accounts. Following the publication of the prior § 1.530A-1 NPRM, and after considering the public comments supporting automatic enrollment, the Treasury Department and the IRS identified an administrable structure under which the Secretary can make elections for eligible individuals while preserving separate IRA ownership and protecting return information from disclosure.

Under this structure, a separate initial Trump account is established for each eligible individual pursuant to a separate written governing instrument, and separate account-level records are maintained for each account, which are referred to as auto accounts. Contributions are received and recorded by the individual auto account, and the assets attributable to auto accounts are invested collectively through a master group trust that is intended to satisfy the applicable requirements of Rev. Rul. 81-100, as modified. Each auto account holds an undivided proportionate beneficial interest in the investments held through the master group trust that are attributable to contributions allocated to qualified classes of which the account beneficiary was a member and any $1,000 pilot program contribution (if a pilot program election has been made by a pilot program-electing individual pursuant to section 6434) made to that account, and records maintained for the Trump accounts program identify the assets attributable to each auto account. The structure thus combines separate account ownership and account-level recordkeeping with collective investment and administration.

The ability to use that structure depends on having a regulatory regime in effect governing Secretary elections, account establishment, trustee administration, the master group trust, responsible-party authority, claiming procedures, and transition rules for accounts and elections that predate auto enrollment. If the effective date of the regulations was delayed until after notice-and-comment procedures were completed, the Secretary would be unable to begin administering auto elections and auto accounts on a uniform basis, and eligible individuals may not have an account in which to receive qualified general contributions or a $1,000 pilot program contribution (if a pilot program election has been made by a pilot program-electing individual pursuant to section 6434). That result would be contrary to the public interest because it would delay making the accounts available for eligible individuals at the earliest practicable time, which in turn would shorten the growth period of such accounts.

The rules in § 1.530A-7T are also needed immediately. Section 530A(f) permits eligible donors to make general funding contributions for qualified classes of account beneficiaries, and section 530A contemplates that contributions may be made during the growth period. Section 1.530A-7T provides the procedures and standards needed for the Secretary to accept a general funding contribution, enter into a Treasury acceptance agreement, identify account beneficiaries, and determine the amount payable to each account. Until those rules are effective, eligible donors, trustees, and the Treasury Department would lack the operative framework for determining whether a proposed broad-based contribution qualifies under section 530A(f), which account beneficiaries are included, and the amount to be contributed to each account. Delaying these rules would prevent or significantly delay broad-based contributions, require donors and trustees to defer implementation or proceed under uncertain and potentially inconsistent terms, and could deprive account beneficiaries of contributions and associated investment returns during the first period in which Trump accounts are being established and funded.

The qualified stock contribution rules in § 1.530A-7T present an additional need for immediate guidance. Because section 408(a)(1) generally contemplates cash contributions to IRAs and section 530A(b)(1)(C)(iii) restricts investments during the growth period to eligible investments while section 530A(a) allows the Secretary to provide exceptions in guidance for a Trump account from treatment as an IRA, trustees and donors need rules before a stock contribution is accepted to determine whether stock may be transferred, what stock qualifies, how the minimum holding period applies, how corporate actions and successor stock are handled, and when cash proceeds or other property must be invested in eligible investments. Without immediate rules, an eligible donor seeking to make a qualified stock contribution could not reliably complete the contribution, and trustees could not accept and hold the stock without risking inconsistent treatment under the IRA and Trump account rules. Because these issues must be resolved before stock is accepted and allocated to accounts, post-hoc guidance issued only after completion of notice-and-comment procedures would not ensure that stock contributions can be made or that such contributions were treated equally.

The temporary regulations also reduce the risk of inconsistent account treatment and misdirected contributions during the transition to auto enrollment. The regulations specify how accounts established before auto enrollment are treated, how elections made before auto enrollment that have not resulted in established accounts are handled, and how an auto account may be claimed and transferred. Without immediately effective rules addressing the transition, the Secretary and trustees could receive overlapping elections, claims, funding requests, and transfer instructions for the same account beneficiaries without a uniform rule for how to resolve them. That uncertainty would impair orderly administration and could require corrective transfers or duplicative administrative actions.

The Treasury Department and the IRS have taken steps to provide advance information and opportunities for public input. Notice 2025-68 informed taxpayers that guidance would be issued under section 530A and requested comments. The Treasury Department and the IRS also published the prior § 1.530A-1 NPRM regarding elections to establish initial Trump accounts and considered comments on auto enrollment and account administration. In accordance with section 7805(e) of the Code, a cross-referenced notice of proposed rulemaking is being published concurrently with these temporary regulations, and the Treasury Department and the IRS will consider all timely comments before issuing final regulations.

For these reasons, the Treasury Department and the IRS find that delaying the effectiveness of §§ 1.530A-1T and 1.530A-7T to complete notice-and-comment procedures would be impracticable and contrary to the public interest. Accordingly, the Treasury Department and the IRS find good cause under 5 U.S.C. 553(b)(3)(B) to issue these temporary regulations without prior notice and comment.

The Treasury Department and the IRS also find good cause under 5 U.S.C. 553(d)(3) for these temporary regulations to become effective upon publication in the Federal Register. A 30-day delayed effective date would create the same problems described above: auto enrollment and auto accounts could not be administered on a uniform basis; claims and transfers could be delayed; and qualified general contributions or qualified stock contributions could be postponed or made under uncertain terms. Immediate effectiveness is therefore necessary to permit the Secretary, trustees, eligible donors, responsible parties, and account beneficiaries to apply the rules as Trump accounts are established, claimed, funded, and transferred.

Executive Orders 12866 and 13563 direct agencies to assess costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility.

The temporary regulations have been designated by the Office of Management and Budget’s (OMB’s) Office of Information and Regulatory Affairs (OIRA) as subject to review under Executive Order 12866 pursuant to the Memorandum of Agreement (MOA, July 4, 2025) between the Treasury Department and the OMB regarding review of tax regulations. OIRA has determined that the rulemaking is economically significant and subject to review under section 3(f)(1) of Executive Order 12866 and section 1(c) of the MOA. Accordingly, the temporary regulations have been reviewed by OMB.

Need for Regulation

The temporary regulations define terms for the purpose of implementing section 530A and clarify how initial accounts will be created and claimed. The temporary regulations define terms and establish rules for general funding contributions and qualified general contributions.

The Statute and the Temporary Regulations

Public Law 119-21, commonly referred to as the One, Big, Beautiful Bill Act, added new sections 530A, 128, and 6434 to the Code. Section 530A describes Trump accounts, section 128 describes certain employer contributions to Trump accounts, and section 6434 describes the Trump accounts contribution pilot program. The temporary regulations implement rules under section 530A concerning account creation and contributions to a qualified class.

Section 530A defines a Trump account as a traditional individual retirement account (IRA) with some special rules. Most special rules that distinguish Trump accounts from other IRAs apply only during the growth period. The first day of the growth period is the day the account is established, and the final day of the growth period is December 31 of the calendar year in which the account beneficiary attains age 17. The rules for traditional IRAs generally apply after the growth period. A Trump account may be established for the benefit of a child prior to the calendar year in which the child attains age 18 if the child has been issued a social security number.

In general, distributions from Trump accounts are not permitted during the growth period. The entire balance of a Trump account may be rolled over in a direct trustee-to-trustee transfer to a new Trump account of the account beneficiary. The entire balance of a Trump account may be rolled over in a direct trustee-to-trustee transfer to an ABLE account of the account beneficiary in the calendar year the account beneficiary attains age 17.

During the growth period, cash in a Trump account must generally be invested in funds that track the returns of a broad index of equities in primarily U.S. companies for which regulated futures contracts are traded, do not use leverage, and do not have annual fees and expenses above 0.1%.

Trump accounts may receive contributions from nonprofits, governments, employers, and individuals. During the growth period, contributions to a Trump account generally are subject to an annual limit of $5,000, adjusted for inflation for taxable years after 2027.

Governments and nonprofits may fund contributions in equal amounts to the Trump accounts of every account beneficiary in a qualified class. A qualified class consists of all account beneficiaries in the growth period or all such account beneficiaries who meet specified geographic or birth year criteria. Contributions to a qualified class funded by governments and nonprofits are facilitated by the Treasury Department. A payment from a government or nonprofit to the Treasury Department for the purpose of funding contributions to a qualified class is defined by section 530A(f)(2) as a general funding contribution. A payment from the Treasury Department to the Trump account of an account beneficiary in a qualified class is defined by section 530A(f)(1) as a qualified general contribution. Contributions to a qualified class facilitated by the Treasury Department and funded by a government or nonprofit do not count towards the $5,000 annual contribution limit.

Section 128 sets rules for certain employer contributions to Trump accounts. Employers may contribute to the Trump account of an employee or an employee’s dependent. Section 128 employer contributions to a Trump account are excluded from the employee’s income, up to an annual limit of $2,500, adjusted for inflation for taxable years after 2027. Section 128 employer contributions count towards the $5,000 annual contribution limit.

Section 6434 describes the Trump accounts contribution pilot program. In the pilot program, the Secretary of the Treasury (Secretary) will pay $1,000 to the Trump accounts of eligible children. A U.S. citizen born in 2025, 2026, 2027, or 2028 who has been issued a social security number, for whom no request for a pilot program contribution has previously been processed, and for whom the pilot program-electing individual anticipates will be that individual’s qualifying child under section 152(c) for the year in which the election is made is eligible for a pilot program contribution. Pilot program contributions do not count towards the $5,000 annual contribution limit.

Other contributions to a Trump account during the growth period (other than qualified rollover contributions), including contributions from friends or family members, contributions from governments and nonprofits that are not facilitated by the Treasury Department, and employer contributions that are not Section 128 employer contributions, are contributions for which no deduction is allowed under section 219 (they create investment in the contract (basis) for purposes of applying section 72) and count towards the $5,000 annual contribution limit.

The temporary regulations (§§ 1.530A-1T and 1.530A-7T) are just one piece of the implementation of section 530A; prior proposed regulations addressed eligible investments (§ 1.530A-3), and future guidance will address other issues (§§ 1.530A-2, 1.530A-4, 1.530A-5, and 1.530A-6).

Under the temporary regulations, the following terms are defined for the purpose of implementing section 530A: IRA, traditional IRA, growth period, responsible party, initial Trump account, auto account, claimed initial Trump account, qualified rollover contribution, rollover Trump account, and master group trust. An IRA is an individual retirement account. A traditional IRA is an individual retirement account that is not a Roth IRA. Growth period is a concise term for the period described repeatedly by the statute as ‘‘the period before the first day of the calendar year in which the account beneficiary attains age 18.’’ A responsible party is the person authorized under the written governing instrument to act on behalf of the account beneficiary. An initial Trump account is an account that is created or organized by the Secretary. An auto account is an initial Trump account that is created following an election made by the Secretary. A claimed initial Trump account is an initial Trump account that receives a qualified rollover contribution from an auto account. A qualified rollover contribution is a direct trustee-to-trustee transfer of an account beneficiary’s entire Trump account balance to a different Trump account for the same account beneficiary. A rollover Trump account is a Trump account that is not an initial Trump account. A master group trust is a trust established by the Secretary to hold investments for the exclusive benefit of account beneficiaries of auto accounts.

Under the temporary regulations, these additional terms are defined for the purpose of implementing section 530A: Treasury acceptance agreement, eligible donor, approved class, record date, qualified stock, and qualified stock contribution. A Treasury acceptance agreement is a document that specifies the terms under which the Secretary accepts a general funding contribution. An eligible donor is a government or nonprofit that is eligible to make a general funding contribution. An approved class is a group of at least 5,000 account beneficiaries in the growth period who meet geographic and birth year criteria specified by a Treasury acceptance agreement. A record date is the date (or dates) when membership in a qualified class is determined as specified in a Treasury acceptance agreement. Qualified stock is publicly traded stock of a domestic corporation with no pre-existing transfer restrictions, such as being a restricted security as defined in 17 CFR 230.144(a)(3). A qualified stock contribution is a qualified general contribution of qualified stock.

Under the temporary regulations, the Secretary will create auto accounts for eligible children who do not have Trump accounts on or about October 1, 2026, and periodically thereafter. The Secretary is the responsible party for an auto account. An auto account may receive qualified general contributions and the $1,000 pilot program contribution. A person with legal authority to view the account beneficiary’s tax information, including a guardian or legal custodian or the account beneficiary after attaining age 18, may “claim” an auto account. When an auto account is claimed during the growth period, there is a qualified rollover contribution to a claimed initial Trump account or to a rollover account, and the individual claiming the account becomes the responsible party. When an auto account is claimed after the growth period, there is a trustee-to-trustee transfer to a traditional IRA for the benefit of the account beneficiary.

Under the temporary regulations, the terms of a general funding contribution must be specified in a Treasury acceptance agreement. A Treasury acceptance agreement must identify the donor, aggregate funding amount or commitment, geographic criteria of the qualified class (if any), age criteria of the qualified class (if any), record dates, donor-identity reporting, and other required information. An approved class will receive the same tax treatment and Treasury facilitation as a qualified class. The regulations clarify that a 501(c)(3) organization furthers exempt purposes by making a general funding contribution, including through a donor advised fund, and that a general funding contribution is neither a section 4945 grant to an individual nor a section 4966 distribution to a natural person.

Under the temporary regulations, a general funding contribution may consist of qualified stock. For a qualified stock contribution, the Treasury acceptance agreement must include the name and employee identification number (EIN) of the stock issuer, the number of shares, and other required information. Qualified stock that is contributed to a Trump account in a qualified general contribution must generally be held for five years, but there are exceptions to liquidate the stock at the end of the growth period, to initiate a qualified ABLE rollover, to permit cash in lieu of fractional shares that cannot be transferred in kind as part of a qualified rollover contribution, in the case of a tender offer, or if the issuer of the qualified stock is acquired (by merger, purchase, or otherwise). If qualified stock is disposed of improperly without an exception, equivalent stock must be repurchased.

Baseline

The Treasury Department and the IRS have assessed the benefits and costs of the temporary regulations relative to a no-action baseline reflecting anticipated Federal income tax-related behavior in the absence of these temporary regulations.

Affected Entities and Taxpayers

The temporary regulations are expected to affect 73 million children in 44 million families.

Economic Effects of the Temporary Regulations

The temporary regulations make several choices that increase the appeal of making general funding contributions. As a consequence, more eligible donors will make general funding contributions, more children will receive qualified general contributions, and the total value of class contributions will be larger.

The class contribution feature of Trump accounts is unprecedented in the domain of child savings accounts. This will be the first time the federal government facilitates private contributions for the benefit of individual American children. Because class contributions are charting new territory in charitable giving, there is no obvious basis for estimating the incremental impact of the temporary regulations.

One very instructive data point is the pledged contribution from the Michael & Susan Dell Foundation (MSDF). MSDF has been at the forefront of class contributions since Trump accounts were enacted into law. MSDF pledged $6.25 billion to children born between 2016 and 2024 who live in ZIP codes where household median income is below $150,000. Some individuals have announced similar donations with smaller regional footprints, and other individuals have expressed interest in similar donations. It is unclear whether this level of giving can be sustained in the long run or whether it is concentrated as Trump accounts are launching. The choices in the temporary regulations position class contributions to Trump accounts for sustained participation by nonprofits and governments, both large and small.

The temporary regulations are expected to increase the number of children who have Trump accounts in 2026 by more than 60 million. The future impact is more uncertain, but the temporary regulations are estimated to result in approximately two million additional accounts per birth year cohort into the future.

As a result of the temporary regulations, the incremental value of class contributions is expected to be billions of dollars per year, allocated across the Trump accounts of tens of millions of children.

The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) generally requires that a Federal agency obtain the approval of the OMB before collecting information from the public, whether such collection of information is mandatory, voluntary, or required to obtain or retain a benefit. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number.

The collections of information in these temporary regulations contain reporting, third-party disclosure and recordkeeping requirements that are necessary for Trump account enrollment. These collections of information generally would be used by the Secretary to automatically enroll beneficiaries into Trump accounts.

The temporary regulations mention reporting requirements for making elections for Trump accounts by a person other than the Secretary, as detailed in 26 CFR 1.530A-1T(d)(1)(ii). This reporting requirement is already approved by the OMB under OMB Control Number 1545-2336 and is not being revised by this temporary regulation.

The temporary regulations mention reporting requirements for filing a general funding contribution request and entering into a Treasury acceptance agreement, as detailed in 26 CFR 1.530A-7T(c)(2). This reporting requirement is already approved by the OMB under OMB Control Number 1505-0285 and is not being revised by this temporary regulation.

The temporary regulations include reporting by account beneficiaries or responsible parties and third-party disclosures and associated recordkeeping requirements from trustees to account beneficiaries or responsible parties. These collections of information are necessary to allow account beneficiaries or responsible parties to claim accounts and to inform account beneficiaries or responsible parties of any required sales and investments related to qualified stock. IRS anticipates that the likely respondents are individuals, responsible parties, businesses, and for-profit organizations (trustees).

Table 1 provides a high-level description of the collection requirements created or changed within this regulation, and the regulatory sections that detail these requirements. Table 2 provides the estimated burden placed on respondents for each collection requirement. These collection requirements and their associated burdens will be approved by the OMB under OMB Control Number 1545-2336 under the emergency procedures in 5 CFR 1320.13 and will be renewed under the PRA procedures in 5 CFR 1320.10.

For applicability of the Regulatory Flexibility Act, please refer to the cross-referenced notice of proposed rulemaking (CC-00226466-26) published elsewhere in this issue of the Federal Register.

Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) requires that agencies assess anticipated costs and benefits and take certain other actions before issuing a final rule that includes any Federal mandate that may result in expenditures in any one year by a State, local, or Tribal government, in the aggregate, or by the private sector, of $100 million in 1995 dollars, updated annually for inflation. These temporary regulations do not include any Federal mandate that may result in expenditures by State, local, or Tribal governments, or by the private sector in excess of that threshold.

Executive Order 13132 (Federalism) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial, direct compliance costs on State and local governments, and is not required by statute, or preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Executive order. These temporary regulations do not have federalism implications and do not impose substantial direct compliance costs on State and local governments or preempt State law within the meaning of the Executive order.

Pursuant to section 7805(f) of the Code, these temporary regulations have been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business.

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), the Office of Information and Regulatory Affairs designated this rule as a major rule as defined by 5 U.S.C. 804(2). For the reasons stated in the Good Cause section of this preamble, the Treasury Department and the IRS find good cause under 5 U.S.C. 808(2) for these temporary regulations to take effect upon publication, notwithstanding the delayed effective date otherwise applicable to a major rule under 5 U.S.C. 801(a)(3).

This revenue procedure provides guidelines and general requirements for developing, printing, and approving 2026 substitute tax forms. Approval will be based on these guidelines. After review and approval, submitted forms will be accepted as substitutes for official IRS forms.

Certain unique specialized forms require the use of other publications that supplement this publication. See Part 4.

The IRS accepts quality substitute tax forms that are consistent with the official forms and have no adverse impact on processing. The IRS Substitute Forms Program (the Program) administers the formal acceptance and processing of these forms nationwide. While this Program deals with paper documents, it also reviews for approval other processing and filing forms used in electronic filing.

Only substitute forms that fully comply with these requirements are acceptable. This revenue procedure is updated as required to reflect pertinent tax year form changes and to meet processing and/or legislative requirements.

The following types of forms are covered by this revenue procedure.

The following types of forms are not covered by this revenue procedure. Refer to the publication for questions.

The following information is not covered by this revenue procedure.

Send your substitute forms for approval to the following offices. Do not send forms with taxpayer data.

The following changes have been made to this year’s revenue procedure.

A tax form (or related schedule) that differs in any way from the official version and is intended to replace the form that is printed and distributed by the IRS. This term also covers those approved substitute forms exhibited in this revenue procedure.

A form produced using conventional printing processes or a printed form that has been reproduced by photocopying or a similar process.

A printed form that has marginal perforations for use with automated and high-speed printing equipment.

A preprinted form in which the taxpayer’s tax entry information has been inserted by a computer, a computer printer, or other computer-type equipment.

A tax return or form that is entirely designed and printed using a computer printer on plain white paper. This return or form must conform to the physical layout of the corresponding IRS form, although the typeface may differ. The text should match the text on the officially printed form as closely as possible. Condensed text and abbreviations may be approved on a case-by-case basis.

Exception. All jurats (perjury statements) must be reproduced verbatim.

A preprinted reproduced form in which the taxpayer’s tax entry information is entered by an individual using a pen, a pencil, or other nonautomated equipment.

Parts of a printed tax form that are not tax amount entries or required text. Examples of graphics are line numbers, captions, shadings, special indicators, borders, rules, and strokes created by typesetting, photographics, photocomposition, etc.

A legible photocopy or an exact replica of an original form.

A document providing detailed information to support a line entry on an official or approved substitute form and filed with (attached to) a tax return.

Note: A supporting statement is not a tax form and does not take the place of an official form.

The following specific terms are used throughout this revenue procedure in reference to all substitute forms: format, sequence, line reference, item caption, and data entry field.

The overall physical arrangement and general layout of a substitute form.

Sequence is an integral part of the total format requirement. The substitute form should show the same numeric and logical placement order of data as shown on the official form.

The line numbers, letters, or alphanumerics used to identify each captioned line on an official form. These line references are printed to the immediate left of each caption and/or data entry field.

The text on each line of a form that identifies the data required.

Designated areas for the entry of data such as dollar amounts, quantities, responses, and checkboxes.

A draft version of a new or revised form may be posted to the IRS website (https://www.irs.gov/draftforms) for information purposes. Substitute forms may be submitted based on these advance drafts, but any submitter who receives forms approval based on these early drafts is responsible for monitoring and revising forms to reflect any revisions in the final forms provided by the IRS.

Generally, approval may be provided in writing or presumed after 20 business days from the IRS’s receipt of forms that the IRS has not substantially changed. This does not apply to newly created or substantially revised IRS forms. However, the Program reserves the right to notify vendors of any inaccuracies even after 20 business days have lapsed.

The NACTP is a nonprofit association that represents tax processing software and hardware developers, electronic filing processors, tax form publishers, tax processing service bureaus, and payroll processors. The association promotes standards in tax processing to advance efficient and effective tax filing. For more information, go to https://www.nactp.org.

Any person or company who uses substitute forms and makes all or part of the changes specified in this revenue procedure agrees to the following stipulations.

The Program will email confirmation of receipt of your forms submission, if possible. Even if you do not receive emailed confirmation of receipt, you will receive an emailed “submission receipt,” which will provide feedback on your submission. If the Program anticipates problems in completing the review of your submission within the 20-business-day period, the Program will send an interim email notifying you of the extended period for review.

Once the substitute forms have been approved by the Program, you can release them after the final versions of the forms have been issued by the IRS. Before releasing the forms, you are responsible for updating forms approved as draft and for making form changes requested.

The policy has the following stipulations.

If you produce substitute tax forms that fully comply with the changes specifically outlined by the Program, you can generate your own substitute forms without further approval. Also, if your substitutes have received approval in the past, and there are no substantial formatting or text changes for the tax year, then changes can be made without additional approval. If your changes are more extensive, you must get IRS approval before using substitute forms. More extensive changes include changing font styles, decreasing or increasing the font size of caption titles, adjusting or omitting layout elements, changing page orientation, and repositioning line items, tables, or legends.

The Program accepts submissions of substitute forms for review and approval via email. The email address is substituteforms@irs.gov. Include the term “PDF Submissions” on the subject line.

Follow these guidelines.

If the guidelines are not followed, you may need to resubmit.

Emailing PDF submissions will not expedite review and approval. Submitting your substitute forms package via email is the preferred and suggested method for submitting forms for review. If, for some reason, you are not able to email your submission(s), you can mail your submission(s) to:

Internal Revenue Service Attn: Substitute Forms Program SE:W:CAR:MP:P:TP:TP ATSC 4800 Buford Highway Mail Stop: 061-N Chamblee, GA 30341

Follow these basic guidelines for expediting the process.

Some schedules are considered to be an integral part of a complete tax return and must be submitted as part of the form. Other schedules may be submitted separately and do not need to be included with the tax form.

Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, is an example of this situation. For the Form 706 to be considered for approval, all schedules that affect or are applicable to any election or position taken by the filer, as well as all applicable schedules that affect the tax, must be submitted.

Schedules C, D, and E for Form 1040, U.S. Individual Income Tax Return, or Form 1040-SR, U.S. Tax Return for Seniors, are examples of schedules that can be submitted separately. Although printed by the IRS as a supplement to Form 1040 or 1040-SR, these schedules are not required to be submitted for approval with Form 1040 or 1040-SR. These schedules may be separated from Form 1040 or 1040-SR and submitted as substitute forms.

The IRS is continuing a program to identify and contact tax return preparers, forms developers, and software publishers who use or distribute unapproved forms that do not conform to this revenue procedure. The use of unapproved forms hinders the processing of the returns.

There are methods of reproducing IRS printed tax forms suitable for use as substitutes without prior approval.

All payment vouchers (Forms 940-V, 941-V, 943-V, 944-V, 945-V, 1040-ES, 1040-V, 1041-V, and 2290-V) must be reproduced in conjunction with their forms. Substitute vouchers must be the same size as the officially printed vouchers. Vouchers that are prepared for printing on a laser printer may include a scan line.

Code Number for Forms:

Type Number for:

The voucher size must be exactly 8.0″ x 3.25″ (Forms 1040-ES and 1041-ES must be 7.625″ x 3.0″). The document scan line must be vertically positioned 0.25 inch from the bottom of the scan line to the bottom of the voucher. The last character on the right of the scan line must be placed 3.5 inches from the right leading edge of the document. The minimum required horizontal clear space between characters is 0.014 inch. The line to be scanned must have a clear band 0.25 inch in height from top to bottom of the scan line, and from border to border of the document. “Clear band” means no printing except for dropout ink.

Vouchers must be imaged in black ink using OCR A, OCR B, or Courier 10. These fonts may not be mixed in the scan line. The horizontal character pitch is 10 CPI. The preferred paper weight is 20 to 24 pound OCR bond.

Certain vouchers may be reproduced for use in the IRS lockbox system. These include the Forms 1040-V, 1040-ES, 1041-V, 94X series, and 2290 vouchers. Software developers must follow these specific guidelines to produce scannable vouchers strictly for lockbox purposes. Also see Exhibit A.

Note: All software developers must ensure that their software uses OCR A font so taxpayers will be able to print the vouchers in the correct font.

Follow these line specifications for entering taxpayer data in the lockbox vouchers.

Send an approval sheet with each form type for IRS signature to Jason Lane at Jason.L.Lane@irs.gov. Include in the email an example of each voucher type the site will test. Note: Do not mail any test vouchers to Jason Lane.

You are required to send 25 voucher samples of each form in PDF format by December 4, 2026. You should email the test vouchers to Raul Mariduena at raul.t.mariduena@jpmorgan.com. You can also print the vouchers and send them to his mailing address at:

JP Morgan Chase Attn: Raul Mariduena 830 Tyvola Road, Suite 114 Charlotte, NC 28217

For further information, contact Jason Lane at Jason.L.Lane@irs.gov, or at 214-413-5105 (not toll free).

Unless this revenue procedure specifically permits it, you cannot change any IRS tax form or use your own nonapproved versions, including graphics, without prior IRS approval. See Sections 2.5.7 through 2.5.11.

You cannot adjust any of the graphics on Form 1040 or 1040-SR (except in those areas specified in Part 5 of this revenue procedure) without prior approval from the Program.

You cannot rearrange or redistribute data entry fields, and/or allow data entry fields to flow from one page onto the next (that is, each page of a substitute form must contain the exact number of data entry fields as there are on the official IRS form). The order of information on the substitute form must be identical to the IRS version of the form. Publications for specific substitute forms will state allowances for those respective forms.

Note: The 20-business-day turnaround policy may not apply to extensive changes.

Preparers who submit substitute privately designed, privately printed, computer-generated, or computer-prepared tax forms must develop these substitutes using the guidelines established in this part. These forms, unless there is an exception outlined by this revenue procedure, must be approved by the IRS before being filed.

The IRS cannot grant final approval of your substitute form until the official form has been published. However, the IRS posts advance draft forms on its website at https://www.irs.gov/draftforms.

Submission of proposed substitutes of these advance draft forms is encouraged, and conditional approval will be granted based solely on these early drafts. These advance drafts are subject to significant change before forms are finalized. If these advance drafts are used as the basis for your substitute forms, you will be responsible for subsequently updating your final forms to agree with the final official versions. These revisions need not be resubmitted for further approval.

Note: Approval of forms based on advance drafts will not be granted after the final version of an official form is published.

Follow these general guidelines when submitting substitute forms for approval.

Because only the Program is authorized to approve substitute forms, unnecessary delays may occur if forms are sent to the wrong office. You may receive an interim letter about the delay. The Program may then coordinate the response with the originator responsible for revising that particular form. Such coordination may include allowing the originator to officially approve the form. No IRS office is authorized to allow deviations from this revenue procedure.

The IRS does not review or approve the logic of specific software programs, nor does the IRS confirm the calculations on the forms produced by these programs. The accuracy of the program remains the responsibility of the software package developer, distributor, or user.

The Program is primarily concerned with the pre-filing quality review of the final forms that are expected to be processed by IRS field offices. For this purpose, you should submit forms without including any taxpayer information such as names, addresses, monetary amounts, etc.

If the software used is programmed to produce copies with populated fields, then you must use dummy information. This will allow the Program to review and provide feedback or approval. Vendors should use “0” for all number values and “X” for any information that requires alpha characters.

Proposed substitutes, which are required to be submitted per this revenue procedure, should be sent as much in advance of the filing period as possible. This is to allow adequate time for analysis and response.

When submitting sample substitutes, include an accompanying statement that lists each form number and its changes from the official form (position, arrangement, appearance, line numbers, additions, deletions, etc.). For each item, include a detailed reason for the change.

When requesting approval, include a checksheet. Checksheets expedite the approval process. The checksheet may look like the example in Exhibit B displayed in the back of this revenue procedure or may be one of your own design. Include your email address on the checksheet.

The Program will email the checksheet or an approval letter to the originator, unless:

Notice of approval may impose qualifications before using the substitutes. Notices of unapproved forms may specify the changes required for approval and require resubmission of the form(s) in question. When appropriate, you will be contacted by telephone.

Most tax returns that require a signature and many related schedules and forms have the tax year printed in the upper-right corner. Approvals for these annual forms are usually good for 1 calendar year (January through December of the year of filing). Quarterly tax forms in the 94X series and Form 720 require approval for any quarter in which the form has been revised.

Because changes are usually made to an annual form every year, each new filing season generally requires a new submission of a substitute form. Very rarely is updating the preprinted year the only change made to an annual form. However, if no significant content, formatting, or layout changes were made to a tax form, then review and approval received for the prior tax year can be carried over into the current tax year.

Limited changes approved for one tax year may be allowed for the same form in the following tax year. Examples are the use of abbreviated words, revised form spacing, compressed text lines, shortened captions, etc., which do not change the integrity of lines or text on the official forms.

If the vendor or filer makes substantial changes to the form, new substitutes must be submitted for approval. If the vendor or filer makes only minor editorial changes to the form, or makes any changes that mirror changes the IRS makes to the form’s official version, the new substitute does not need to be submitted for approval. It is the responsibility of each vendor who has been granted permission to produce substitute forms to monitor and revise forms to mirror any revisions to the official forms made by the IRS. If there are any questions, contact the Program.

If you received approval for a specific change on a form last year, you may make the same change this year if the item is still present on the official form.

Exception. Forms with temporary, limited, or interim approvals (or with approvals that state a change is not allowed in any other tax year) are subject to review in subsequent years.

Generally, you must send us one copy of each form being submitted for approval. However, if you are producing forms for different computer platforms (for example, Microsoft vs. Apple), different tax preparation software (for example, TurboTax® vs. TaxSlayer®), or different types of printers (for example, inkjet vs. impact), and these forms differ significantly in appearance, submit one copy for each type of platform, tax preparation software, or printer.

Following receipt of an initial approval for a substitute forms package or a software output program to print substitute forms, it is the responsibility of the originator (designer or distributor) to provide client firms or individuals with forms that meet the IRS’s requirements for continuing acceptability. Examples of this responsibility include:

The Program will assign a unique source code to each firm that submits substitute forms for approval. This source code will be a permanent identifier that must be used on every submission by a particular firm.

The source code consists of three alpha characters and should generally be printed under or to the left of the “Paperwork Reduction Act” statement. Vendors must ensure that the source code is not printed too close to or within the left or bottom 0.5-inch margin to avoid the source code from being cut off during printing.

There are legal requirements of the Paperwork Reduction Act of 1995 (the Act). Public Law 104-13 requires the following.

This information must be provided to every user of official or substitute IRS forms or instructions.

On forms that have been assigned OMB numbers:

You must inform the users of your substitute forms of the IRS use and collection requirements stated in the instructions for official IRS forms.

Note: If no IRS instructions are provided to users of your forms, the exact text of the Paperwork Reduction Act Notice (or Disclosure, Privacy Act, and Paperwork Reduction Act Notice) must be furnished separately or on the form.

The OMB number and the Paperwork Reduction Act Notice, or references to it, may be found printed on an official form (or its instructions). The number and the notice are included on the official paper format and in other formats produced by the IRS.

The official form is the standard. Because a substitute form is a variation from the official form, you should know the requirements of the official form for the year of use before you modify it to meet your needs. To obtain the most frequently used tax forms, go to https://www.irs.gov/forms.

Each form must follow the design of the official form as to format arrangement, item caption, line numbers, line references, and sequence.

Generally, state tax information must not appear on the federal tax return, associated form, or schedule that is filed with the IRS. Exceptions occur when amounts are claimed on, or required by, the federal return (for example, state and local income taxes on Schedule A (Form 1040)).

Many individual income tax forms have a required “attachment sequence number” located just below the year designation in the upper-right corner of the form. The IRS uses this number to indicate the order in which forms are to be attached to the tax return for processing. Some of the attachment sequence numbers may change from year to year.

The following apply to computer-prepared forms.

When developing software or forms for use by others, inform your customers/clients that the order in which the forms are arranged may affect the processing of the package. A return must be arranged in the order indicated below.

Supporting statements should then follow in the same sequence as the forms they support. Additional information required should be attached last.

In this way, the forms are received in the order in which they must be processed. If you do not send returns to the IRS in order, processing may be delayed.

On Forms 1040, 1040-SR, and 1120, and any other applicable tax forms, the Paid Preparer Use Only area may not be rearranged or relocated. You may, however, add three extra lines to the paid preparer’s address area, and remove the horizontal rules in that area without prior approval.

Some reasons that substitute form submissions may require changes include the following.

The paper must be:

There are several kinds of paper prohibited for substitute forms. These are:

1. Carbon-bonded paper, and

2. Chemical transfer paper except when the following specifications are met.

a. Each ply within the chemical transfer set of forms must be labeled.

b. Only the top ply (ply one and white in color), the one that contains chemical on the back only (coated back), may be filed with the IRS.

Example. A set containing three plies would be constructed as follows: ply one (coated back), “Federal Return, File With IRS”; ply two (coated front and back), “Taxpayer’s copy”; and ply three (coated front), “Preparer’s copy.”

The file designation, “Federal Return, File With IRS” for ply one, must be printed in the bottom-right margin (just below the last line of the form) in 12-point boldface type.

It is not mandatory, but recommended, that the file designation “Federal Return, File With IRS” be printed in a contrasting ink for visual emphasis.

It is preferred that the color and opacity of paper substantially duplicate that of the original form. This means that your substitute must be printed in black ink and may be on white paper or on the colored paper the IRS form is printed on. Form 1040 or 1040-SR substitute reproductions may be in black ink without the colored shading. The only exception to this rule is Form 1041-ES, which should be printed with a PMS 100 yellow shading in the color-screened area. This helps the IRS quickly distinguish this form from the very similar Form 1040-ES.

Substitute or reproduced forms and computer-prepared/-generated substitutes may be the same size as the official form or they may be the standard commercial size (8.5″ x 11″). The thickness of the stock cannot be less than 0.003 inch.

The private printing of all substitute tax forms must be by conventional printing processes, photocopying, computer graphics, or similar reproduction processes.

All forms must have a high standard of legibility as to printing, reproduction, and fill-in matter. Entries of taxpayer data may be no smaller than 8 points. The IRS reserves the right to reject those with poor legibility. The ink and printing method used must ensure that no part of a form (including text, graphics, data entries, etc.) develops “smears” or similar quality deterioration. This standard must be followed for any subsequent copies or reproductions made from an approved master substitute form, either during preparation or during IRS processing.

Many federal tax forms are printed using Helvetica as the basic type font. It is preferred that you use this type font when composing substitute forms.

Substitute forms should be printed using a 6 lines/inch vertical print option. They should also be printed horizontally in 10-pitch pica (that is, 10 print characters per inch) or 12-pitch elite (that is, 12 print positions per inch).

The image size of a printed substitute form should be as close as possible to that of the official form. You may omit any text on both computer-prepared and computer-generated forms that is solely instructional.

To allow a large top margin for marginal printing and more lines per page, the title line(s) for all substitute forms (excluding the form’s year designation and sequence number, when present) may be photographically reduced by 40% or reset as a single line of type. When reset as a single line, the type size may be no smaller than 14 points. You may omit “Department of the Treasury—Internal Revenue Service” and all references to instructions in the form’s title area.

When privately printing substitute tax forms, the GPO symbol and/or jacket number must be removed. In the same place using the same type size, print the EIN of the printer or designer, or the IRS-assigned source code. (Preferably, this last number should be printed in the lower left area of the first page of each form.) Also, remove the IRS catalog number (Cat. No.) and the recycle symbol if the substitute is not produced on recycled paper.

Substitute single-page forms should be reproduced the same as IRS single-page forms. Other forms or schedules should not be printed on the back or on blank portions of a single-page form. However, printing instructions on the back or on blank portions of a single-page form is acceptable.

The IRS does not undertake to approve or disapprove the specific equipment or process used in reproducing official forms. Photocopies of forms must be entirely legible and satisfy the conditions stated in this and other revenue procedures.

Reproductions of official forms and substitute forms that do not meet the requirements of this revenue procedure may not be filed instead of the official forms. Illegible photocopies are subject to being returned to the filer for resubmission of legible copies.

Generally, you may remove references to instructions. No prior approval is needed. However, in some instances, you may be requested to include references to instructions.

Exception. The words “For Paperwork Reduction Act Notice, see separate instructions” must be retained, or a similar statement indicating the location of the Notice must be provided on each form.

The format of a reproduced tax form when printed on the page must have margins on all sides at least as large as the margins on the official form. This allows room for IRS employees to make necessary entries on the form during processing.

Prior approval is not required for the marginal printing allowed when printed on an official form or on a photocopy of an official form.

To be acceptable for filing, a substitute form must print out in a format that will allow the filer to follow the same instructions that accompany official forms. The form must be legible, must be on the appropriately sized paper, and must include a jurat (perjury statement) where one appears on the published form.

The IRS has received returns produced by software packages with approved output where either the form heading was altered or the lines were spaced irregularly. This produces an illegible or unrecognizable return or a return with the wrong number of pages. While many of these problems are caused by individual printer differences, they may delay input of return data and, in some cases, generate correspondence to the taxpayer. Therefore, in the instructions to the purchasers of your product, both individual and professional, stress that their returns will be processed more efficiently if they are properly formatted. This includes:

If you are producing a software package that generates name and address data onto the tax return, do not program IRS preprinted check digits or practitioner-derived name controls to appear on returns filed with the IRS.

Whenever applicable:

The IRS publications listed below provide guidance for substitute tax forms not covered in this revenue procedure. These publications are available on the IRS website. Use the publication number listed below to search for the requested document.

Copies of tax forms, instructions, publications, fillable forms, and prior-year forms and publications are available at https://www.irs.gov/forms.

Draft forms and instructions may be found at https://www.irs.gov/draftforms.

Other tax-related information may be found at https://www.irs.gov.

For system requirements, contact the National Technical Information Service (NTIS) at https://www.ntis.gov. Prices are subject to change.

You can order IRS forms and other tax material at https://www.irs.gov/orderforms.

Tax return forms (such as Forms 1040, 1040-SR, and 1120) require a signature and establish tax liability. Computer-generated versions are acceptable under the following conditions.

The following are prohibited.

Certain changes (listed in Section 5.2) are permitted to the graphics of the form without prior approval, but these changes apply only to acceptable preprinted forms. Changes not requiring prior approval are good only for the annual filing period, which is the current tax year. Such changes are valid in subsequent years only if the official form does not change.

All changes not listed in Section 5.2 require approval from the IRS before the form can be filed.

You may make minor vertical and horizontal spacing adjustments to allow for computer or word-processing printing. This includes widening the amount columns or tax entry areas if the adjustments comply with other provisions stated in revenue procedures. No prior approval is needed for these changes.

Schedules 1–3 cannot be combined for filing purposes. For the client copy of the return, the numbered schedules may be printed two to a page (for example, Schedule 3 below Schedule 2, if both are completed as part of the return). If numbered schedules are combined on the client copy, it must include a statement that it is “Not for Filing.”

The horizontal rules and instructions within the name and address area may be removed and the entire area left blank. No lines or instructions may remain in the area. The heavy-ruled border (when present) that outlines the name, address area, and SSN must not be removed, relocated, expanded, or contracted.

When the name and address area is left blank, the following format must be used when printing the taxpayer’s name and address.

When there is no in-care-of name line, the name and address will consist of only three lines (single filer) or four lines (joint filer).

Example of joint filer. Name and address (joint filer) with no in-care-of name line:

JOHN Q. DOE MARY Q. DOE 000 ANYWHERE ST., APT. 000 ANYTOWN, STATE 00000

Example of in-care-of name line. Name and address (single filer) with in-care-of name line:

JOHN Q. DOE C/O JOHN R. DOE 0000 SOMEWHERE AVE. SAMETOWN, STATE 00000

The broken vertical lines separating the format arrangement of the SSN/EIN may be removed. When the vertical lines are removed, the SSN and EIN formats must be 000-00-0000 or 00-0000000, respectively.

No prior approval is needed for the following changes (for use with computer-prepared forms only). Specific line numbers in the following headings may have changed due to tax law changes.

The vertical lines separating “Dependent” columns (1) through (4) may be removed. The captions may be shortened to allow a one-line caption for each column.

Any other line with text that takes up two or more vertical lines may be compressed to one line by using contractions, etc., and by removing instructional references.

You may change the line caption to read “Tax” and computer print the words “Total includes tax from” and either “Form(s) 8814” or “Form 4972” or “962 election.” If both forms are used, print both form numbers. This specific line number may have changed.

It is not necessary to duplicate the color screening used on the official form. A substitute Form 1040 or 1040-SR may be printed in black and white only with no color screening.

No other changes to the Form 1040 or 1040-SR graphics are permitted without prior approval except for the removal of instructions and references to instructions.

Exhibit A is an acceptable format for Form 1040-ES.

The format of each substitute form or schedule must follow the format of the official form or schedule as to item captions, line references, line numbers, sequence, form arrangement and format, etc. Basically, try to make the form look like the official one, with readability and consistency being primary factors. You may use periods and/or other similar special characters to separate the various parts and sections of the form. Do not use alpha or numeric characters for these purposes. All line numbers and items must be printed even though an amount is not entered on the line.

When a line on an official form is designated by a number or a letter, use the same designation (reference code) on the substitute form. The reference code must be printed to the left of the text of each line and immediately preceding the data entry field, even if no reference code precedes the data entry field on the official form. If an entry field contains multiple lines and shows the line references once on the left and right sides of the form, use the same number of line references on the substitute form.

In addition, the reference code that is immediately before the data field must either be followed by a period or enclosed in parentheses. There must also be at least two blank spaces between the period or the right parenthesis and the first digit of the data field. (See Section 6.1.4.)

A decimal point (a period) should be used for each money amount regardless of whether the amount is reported in dollars and cents or in whole dollars, or whether or not the vertical line that separates the dollars from the cents is present. The decimal points must be vertically aligned when possible.

When submitting a multi-page form, send all its pages in the same package. If you will not be producing certain pages, note that in your cover letter.

You may show the computer-prepared internal control numbers and identifying symbols on the substitute form if using such numbers or symbols is acceptable to the taxpayer and the taxpayer’s representative. Such information must not be printed in the top 0.5-inch clear area of any form or schedule requiring a signature. Except for the actual tax return form (Forms 1040, 1040-SR, 1120, 940, 941, etc.), you may print in the left vertical and bottom-left margins. The bottom-left margin you may use extends 3.5 inches from the left edge of the form. You may print internal control numbers in place of the removed IRS catalog number.

In the February 2009 Government Accountability Office (GAO) report, “Many Taxpayers Rely on Tax Software and IRS Needs to Assess Associated Risks” (GAO-09-297), the GAO recommended that the IRS require a software identification number on all individual returns to specifically identify the software package used to prepare each tax return. The IRS already has this capability for all e-filed returns. In addition, many tax preparation software firms already print an IRS-issued 3-letter source code on paper returns that are generated by their individual tax software. This source code was assigned when the firms were seeking substitute-forms approval under this publication.

In order to follow this GAO recommendation, the IRS will require that all tax preparation software firms include the 3-letter source code on all paper tax returns created by their individual tax preparation software. The many firms that currently have and display their source codes on paper returns generated from their software should continue to do so, and no change is necessary.

We have reviewed all software companies that passed Assurance Testing System (ATS) testing last filing season and have determined that some firms do not currently have source codes. To save you the burden of contacting us and for your convenience, we have assigned source codes to those firms.

You should program your source code to be placed in the bottom left-hand corner of page one of each paper form that will be generated by your individual tax return package. You do not need to apply for a new source code annually.

If you already use a 3-letter source code and we have issued you one in error, you are unsure if you were ever issued one, or you have other questions or concerns, you may contact Tax Forms and Publications Special Services Section at substituteforms@irs.gov.

The IRS requires tax preparation software firms that participate in the IRS Free File Program include the 3-letter FFF code on all paper Form 1040 returns created by their individual tax preparation software.

If you participate in the IRS Free File Program, you should program the 3-letter FFF code to be placed in the bottom left-hand corner of the first page of each paper Form 1040 that will be generated by your individual tax return package. The 3-letter FFF code and the 3-letter source code should be placed next to each other for consistency. If placing the 3-letter FFF code and the 3-letter source code next to each other is not possible, then above or below will be acceptable.

Example. The 3-letter FFF code and the 3-letter source code could be BCA-FFF or BCA FFF. A dash or a space is needed to separate the 3-letter FFF code and the 3-letter source code.

Descriptions for captions, lines, etc., appearing on the substitute forms may be limited to one print line by using abbreviations and contractions, and by omitting articles, prepositions, etc. However, sufficient keywords must be retained to permit ready identification of the caption, line, or item.

Explanatory detail and/or intermediate calculations for determining final line totals may be included on the substitute form. Preferably, such calculations should be submitted in the form of a supporting statement. If intermediate calculations are included on the substitute form, the line on which they appear may not be numbered or lettered. Intermediate calculations may not be printed in the right column. This column is reserved only for official numbered and lettered lines that correspond to the ones on the official form. Generally, you may choose the format for intermediate calculations or subtotals on supporting statements to be submitted.

Text on the official form, which is solely instructional (for example, “See instructions,” etc.), may generally be omitted from the substitute form.

Showing more than one form or schedule on the same printout page is prohibited. Both sides of the paper may be used for multi-page forms, but it is unacceptable to intermingle forms.

For instance, Schedule E can be printed on both sides of the paper because the official form is multi-page, with page 2 continued on the back. Do not print Schedule E on the front page and Schedule SE on the back page, or Schedule A on the front page and Form 8615 on the back page. Both pages of a substitute form must match the official form. The back page may be left blank if the back page of the official form contains only the instructions.

Identify all computer-prepared substitutes clearly. Print the form designation 0.5 inch from the top margin and 1.5 inches from the left margin. Print the title centered on the first line of print. Print the tax year and, where applicable, the sequence number on the same line 0.5 inch to 1 inch from the right margin.

Include the taxpayer’s name and TIN on all forms and attachments. Also print the OMB number as reflected on the official form.

Negative (or loss) amount entries should be enclosed in brackets or parentheses or include a minus sign. This assists in accurate computation and input of form data. The IRS preprints parentheses in negative data fields on many official forms. These parentheses should be retained or inserted on printouts of affected substitute forms.

Because of significant changes to improve processing, prior approval is now required for substitute Schedules K-1 that accompany Form 1041 (for estates and trusts), Form 1065 (for partnerships), or Form 1120-S (for S corporations). Substitute Schedules K-1 should be as close as possible to exact replicas of the official IRS schedules and follow the same process for submitting other substitute forms and schedules. Before releasing their substitute forms, software vendors are responsible for making any subsequent changes that have been made to the final official IRS forms after the draft forms have been posted.

Submit substitute Schedule K-1 forms, in PDF format, to scrips@irs.gov for scannability acceptance. Schedule K-1 forms that require testing do not need to be mailed to the Program. You must include information on the substitute forms that can be tested. This information should be dummy information. Use an “X” for alpha characters and “0” for numbers. The IRS will review and provide feedback of any changes needed so that your forms can be recognized correctly.

Include the 6-digit form ID code in the upper right of Schedules K-1 of Forms 1041, 1065, and 1120-S. Allow at least 0.25 inch of white space around the 6-digit code.

Schedules K-1 that accompany Forms 1041, 1065, or 1120-S must meet all specifications. The specifications include, but are not limited to, the following requirements.

The entity may have to pay a penalty if substitute Schedules K-1 are filed that do not conform to specifications.

Additionally, the IRS may consider the Schedules K-1 that do not conform to specifications as not being able to be processed and may return Form 1041, 1065, or 1120-S to the filer to be filed correctly.

Schedules K-1 that are 2-D bar-coded will continue to require prior approval from the IRS. (See Sections 7.1.3 through 7.1.5.)

Standardization for reporting information is required for recipient copies of substitute Schedules K-1 of Forms 1041, 1065, and 1120-S. Uniform visual standards are provided to increase compliance by allowing recipients and practitioners to more easily recognize a substitute Schedule K-1. The entity must furnish to each recipient a copy of Schedule K-1 that meets the following requirements.

Electronic filing is the preferred method of filing; however, 2-D bar code is the best alternative method for paper processing.

In an effort to improve efficiency and increase data accuracy, the IRS partnered with the tax software development community on a 2-D bar code project in 2003. Certain tax software packages have been modified to generate 2-D bar codes on Schedules K-1. As a result, when Schedules K-1 are printed using these programs, a bar code will print on the page.

Rather than manually transcribe information from the Schedule K-1, the IRS will scan the bar code and electronically upload the information from the Schedule K-1. This will result in more efficient operations within the IRS and fewer transcription errors for your clients.

Note: If software vendors do not want to produce bar-coded Schedules K-1, they may produce the official IRS Schedules K-1 but cannot use the expedited process for approving bar-coded Schedules K-1 and their parent returns as outlined in Section 7.1.6.

In addition to the requirements in Sections 7.1.1 and 7.1.2, the bar-coded Schedules K-1 must meet the following specifications.

Follow these general specifications for preparing all 2-D bar-coded Schedules K-1.

Prior to releasing commercially available tax software that creates bar-coded Schedules K-1, the printed schedule and the bar code must both be tested.

If your company is creating bar-coded Schedules K-1, you must receive certification for both the printed Schedule K-1, as well as the bar code, before offering your product for sale. Bar-code testing must be done using the final official IRS Schedule K-1. Bar-code approval requests must be resubmitted for any subsequent changes to the official IRS form that would affect the bar code. Below are instructions and a sequence of events that will comprise the testing process.

In order to help provide incentives to the software development community to participate in the Schedule K-1 2-D project, the IRS has committed to expediting the testing of bar-coded Schedules K-1 and their associated parent returns. To receive this expedited service, follow the instructions below.

Increased standardization for reporting information on substitute Forms 8655 is now required to aid in processing and for compliance purposes. Follow the guidelines in Section 7.2.2.

Follow these specific requirements when producing substitute Forms 8655.

Because of how Form 8655 is processed and distributed to recipients, vendors are allowed to affix their logos onto the substitute version of the form. This exception is for Form 8655 only.

The following suggestions may be used as a guideline for creating easily scanned substitute tax forms. If you choose to participate, use the Form 1040 format provided in Exhibit C and Exhibit D. The grid view is for user ease of understanding only and should be removed before printing forms for submission.

Note: The exhibits are to show formatting only and are not a current copy of the form. Use the most current version of any form to create the substitute tax form.

Certain forms have been redesigned for automated processing via ICR technology. As a result, these forms have different requirements for reproduction. These specific requirements apply to both the form image as well as the format of the variable data.

Electronic filing is a method by which authorized providers transmit tax return information to an IRS Service Center in the format of the official IRS forms. The IRS accepts both refund and balance due forms that are filed electronically.

Anyone wishing to participate in IRS e-file of tax returns must submit an e-file application. The application can be completed and submitted electronically on the IRS website at IRS.gov after first registering for e-services on the website. For specific information about completing an e-file application to participate in IRS e-file of tax returns, refer to Pub. 3112, IRS e-file Application & Participation.

Taxpayers choosing to electronically prepare and file their returns will be required to use the Self-Select PIN method as their signatures.

Electronic return originators (EROs) can e-file individual income tax returns only if the returns are signed electronically using either the Self-Select or Practitioner PIN method.

Taxpayers must use Form 8453, U.S. Individual Income Tax Transmittal for an IRS e-file Return, to send supporting documents that are required to be submitted to the IRS.

For specific information about electronic filing, refer to Pub. 1345, Handbook for Authorized IRS e-file Providers of Individual Income Tax Returns.

A participant in the electronic filing program who wants to develop a substitute form should follow the guidelines throughout this publication and send a sample form for approval to the Program at substituteforms@irs.gov. If you do not prepare substitute Form 8453 using a font in which all IRS wording fits on a single page, the form will not be accepted.

Note: Use of unapproved forms could result in suspension of the participant from the electronic filing program.

This revenue procedure supersedes Revenue Procedure 2025-27, 2025-44 I.R.B. 646.

Temporary regulations in the Rules and Regulations section of this issue of the Federal Register add §§ 1.530A-1T and 1.530A-7T to the Income Tax Regulations (26 CFR part 1) (temporary regulations). The temporary regulations address the establishment of an initial Trump account (including auto enrollment by the Secretary) and qualified general contributions (including qualified stock contributions), which are a special type of contribution made to Trump accounts. Except for the applicability provisions, the text of the temporary regulations also serves as the text of these proposed regulations. The preamble to the temporary regulations explains the background and amendments.

On March 9, 2026, the Treasury Department and the IRS published a notice of proposed rulemaking (NPRM) (REG-117270-25) in the Federal Register (91 FR 11194) containing proposed regulations (§§ 1.530A-1 through 1.530A-6) that would provide guidance on making an election to establish a Trump account and reserve additional sections for further guidance on Trump accounts (prior § 1.530A-1 NPRM).

Under the prior § 1.530A-1 NPRM (91 FR at 11196), elections to establish an initial Trump account generally would be made by persons other than the Secretary pursuant to section 530A(b)(2)(C)(ii). Although the prior § 1.530A-1 NPRM acknowledged that section 530A(b)(2)(C)(i) authorizes the Secretary to make an election to establish an initial Trump account, those proposed regulations contemplated that the Secretary’s exercise of that authority would be limited to instances in which the Secretary is deemed to have made an election when an election was submitted by a person who was not authorized to make the election (91 FR at 11197). That proposed approach reflected the need to issue the proposed regulations promptly in order to implement Trump accounts by the July 4, 2026, date on which contributions could first be made. Given the limited time available, the Treasury Department and the IRS were unable to fully resolve the legal and administrative issues associated with implementing broad automatic enrollment, including the need to prevent the unauthorized disclosure of return information.

Many commenters expressed strong support for auto enrollment of initial Trump accounts. Commenters urged the Secretary to make an election for each individual who satisfies the statutory age and social security number requirements, using information available from tax returns, Social Security Administration records, and other authorized sources. Commenters stated that requiring an affirmative election by a person other than the Secretary would reduce participation, particularly among nonfilers, families unfamiliar with tax procedures, and families with limited time or resources to complete a separate enrollment process. Commenters also stated that an eligible individual should not lose the opportunity to receive contributions or investment growth merely because no adult completed an election.

Following the publication of the prior § 1.530A-1 NPRM, and after considering the public comments supporting automatic enrollment, the Treasury Department and the IRS further considered how to address the legal and operational issues identified in that NPRM. In coordination with the Treasury Department’s financial agent and other governmental agencies, the Treasury Department and the IRS have identified an administrable structure under which the Secretary can make elections for eligible individuals while preserving separate IRA ownership and protecting return information from disclosure. This change in approach therefore reflects the development of a different administrative structure, rather than a change in the Treasury Department and the IRS’s interpretation of the authority conferred by section 530A(b)(2)(C)(i).

Under this structure, a separate initial Trump account is established for each eligible individual pursuant to a separate written governing instrument, and separate account-level records are maintained for each account, which are referred to as auto accounts. Contributions are received and recorded by the individual auto account, and the assets attributable to auto accounts are invested collectively through a master group trust that is intended to satisfy the applicable requirements of Rev. Rul. 81-100, as modified. Each auto account holds an undivided proportionate beneficial interest in the investments held through the master group trust that are attributable to contributions allocated to qualified classes of which the account beneficiary was a member and any $1,000 pilot program contribution made to that account, and records maintained for the Trump accounts program identify the assets attributable to each auto account. The structure thus combines separate account ownership and account-level recordkeeping with collective investment and administration.

The master group trust addresses the concerns reflected in the prior § 1.530A-1 NPRM about disclosure of return information because investments are held and administered at the master-group-trust level. Thus, the trustee of the master group trust can execute transactions for the trust without receiving or disclosing account-identifying return information for each account beneficiary in connection with each transaction. Return information used to identify eligible individuals and establish auto accounts is retained in a safeguarded environment by the Secretary and his financial agent authorized to receive that information on the Secretary’s behalf.

In addition, a person seeking to claim an auto account must independently submit the information required by the Secretary, authenticate the person’s identity, establish the person’s legal authority to act with respect to the account and to receive the account beneficiary’s return information, and execute any consent required for disclosures necessary to process the claim and transfer the account balance. This process permits an authorized person to claim and control the account without disclosing protected account information before the person’s legal authority to that information has been established.

Accordingly, after considering the comments and developing this new administrable structure, the Treasury Department and the IRS are withdrawing the prior § 1.530A-1 NPRM and issuing these proposed regulations.

A. Request for Comments Regarding Qualified ABLE Rollover Contributions from Auto Accounts

Under section 530A(d), the general prohibition on distributions from a Trump account during the growth period does not apply to qualified ABLE rollover contributions. Section 530A(d)(4) defines a qualified ABLE rollover contribution as an amount paid during the calendar year in which the account beneficiary attains age 17 in a direct trustee-to-trustee transfer from a Trump account maintained for the account beneficiary to an ABLE account under section 529A(e)(6)¹ maintained for the same account beneficiary. The transferred amount must equal the entire balance of the Trump account.

An auto account presents administrative issues in implementing section 530A(d)(4). Before an auto account is claimed, the Secretary is the responsible party for the account. The Secretary generally will not know whether the account beneficiary is eligible to establish an ABLE account, whether an ABLE account has been established for the account beneficiary, or who has authority to act with respect to that ABLE account. In addition, because the qualified ABLE rollover contribution must be completed during the calendar year in which the account beneficiary attains age 17, the process must allow sufficient time to verify the request, coordinate with the receiving qualified ABLE program, and complete the trustee-to-trustee transfer before the end of that calendar year.

The Treasury Department and the IRS are considering a procedure under which an account beneficiary who has legal capacity or another person with appropriate authority could request a qualified ABLE rollover contribution from an auto account. One possible approach would permit the request to be made as part of the process for claiming the auto account (whether by the person with signature authority over the account beneficiary’s existing ABLE account or some other person), with the entire balance transferred directly from the auto account to an existing ABLE account during the calendar year in which an account beneficiary attains age 17. A second approach would require the auto account first to be claimed and the assets transferred to a claimed initial Trump account or rollover Trump account, after which the responsible party for that account could direct a qualified ABLE rollover contribution. Comments are requested on which approach would best facilitate the completion of a qualified ABLE rollover contribution within the statutory period while protecting the account beneficiary and permitting efficient administration. In particular, comments are requested on whether a direct transfer from an auto account to an existing ABLE account should be incorporated into the auto-account claim process or should be made available through a separate process.

Comments also are requested on who should be permitted to request the transfer and what evidence should be required to establish that person’s authority, including whether qualified ABLE programs should have an affirmative obligation to develop policies and procedures to ensure that auto account assets are identified and rolled over to qualified ABLE accounts for auto account beneficiaries before the statutory deadline for a qualified ABLE rollover contribution has lapsed.

B. Request for Comments Regarding Qualified Geographic Areas

Section 530A(f)(1) requires, in part, that a contribution be made to the Trump account of an account beneficiary in a qualified class of account beneficiaries specified in the general funding contribution. Section 530A(f)(3)(A)(ii) defines a qualified class as including a class of all account beneficiaries who are in their growth period when the contribution is made, and who reside in one or more States or other qualified geographic areas specified by the terms of the general funding contribution. Section 530A(f)(3)(B) defines a qualified geographic area as any geographic area in which not less than 5,000 account beneficiaries reside and which is designated by the Secretary as a qualified geographic area.

The Treasury Department and the IRS are considering how to designate qualified geographic areas using objective standards. Under the procedure being considered, a qualified geographic area must be constructed from United States Postal Service five-digit ZIP codes. An eligible donor would propose a geographic area by providing a list of one or more five-digit ZIP codes. A proposed geographic area would be designated as a qualified geographic area if at least 5,000 account beneficiaries in their growth period reside in the area and at least one of the following two conditions is met: (1) all included ZIP codes are contiguous and do not enclose excluded ZIP codes, or (2) all included ZIP codes correspond to ZIP Code Tabulation Areas that have a median household income below the threshold income for highly compensated employees in section 414(q), as indexed for inflation in the year of the contribution, according to the U.S. Census Bureau.

Comments are requested on all aspects of this procedure, as well as alternatives with administrable, objective criteria.

C. Request for Comments on Exceptions to the Minimum Holding Period Requirement

The Treasury Department and the IRS request comments on whether, and under what circumstances, narrowly tailored exceptions to the minimum holding period requirement should apply when continued ownership of Qualified Stock would create a legal or ethics conflict. Comments are requested on the certification and documentation that should be required to substantiate an exception and on appropriate safeguards to prevent avoidance of the minimum holding period requirement or other abuse.

D. Request for Comments Regarding Disclaimers of Trump Accounts

The Treasury Department and the IRS are considering providing a procedure under which an account beneficiary or a person authorized under applicable local law to make a disclaimer on behalf of the account beneficiary may be eligible to disclaim the account beneficiary’s entire interest in an auto account in the form and manner prescribed by the Secretary in applicable instructions.

A disclaimer of an auto account would be permitted only if the auto account has not been claimed, the auto account has not received a $1,000 pilot program contribution under section 6434, and the account beneficiary has attained age 18. The Secretary must receive the disclaimer no later than nine months after the date the account beneficiary attains age 21, and the disclaimer must otherwise satisfy the requirements of a qualified disclaimer under section 2518.

Upon making an auto account disclaimer, the account beneficiary would no longer have any rights with respect to the auto account. Comments are requested on the disposition of the disclaimed interest, including how to ensure that the interest passes without direction by the disclaimant to a person other than the disclaimant, as required by section 2518(b)(4).

In addition, the Treasury Department and the IRS have considered whether this proposed disclaimer rule should be broadened also to apply to all Trump accounts, instead of only to unclaimed auto accounts. Comments are requested on this issue, and on what other issues would need to be addressed in the event of such an expansion of the proposed disclaimer rule (such as, for example, what would or would not be considered to be an acceptance of the account, and whether partial disclaimers would be permitted).

Comments also are requested on the notice, if any, that should be provided to the account beneficiary before any disclaimer period expires. Comments should address the appropriate method and timing of notice, the information that may be disclosed consistently with section 6103, and whether the notice should describe potential consequences under section 2518 and means-tested benefit programs without providing individualized legal advice.

The Regulatory Planning and Review section in the Special Analyses part of the preamble to the temporary regulations provides the relevant discussion.

The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) generally requires that a Federal agency obtain the approval of the Office of Management and Budget (OMB) before collecting information from the public, whether such collection of information is mandatory, voluntary, or required to obtain or retain a benefit. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number.

The collections of information in these proposed regulations contain reporting, third-party disclosure and recordkeeping requirements that are necessary for Trump account enrollment. These collections of information generally would be used by the Secretary to automatically enroll beneficiaries into Trump accounts.

The proposed regulations mention reporting requirements for making elections for Trump accounts by a person other than the Secretary, as detailed in 26 CFR 1.530A-1(d)(1)(ii). This reporting requirement is already approved by the OMB under OMB Control Number 1545-2336 and is not being revised by this proposed regulation.

The proposed regulations mention reporting requirements for filing a general funding contribution request and entering into a Treasury acceptance agreement, as detailed in 26 CFR 1.530A-7(c)(2). This reporting requirement is already approved by the OMB under OMB Control Number 1505-0285 and is not being revised by this proposed regulation.

The proposed regulations include reporting by account beneficiaries or responsible parties and third-party disclosures and associated recordkeeping requirements from trustees to account beneficiaries or responsible parties. These collections of information are necessary to allow account beneficiaries or responsible parties to claim accounts, and to inform account beneficiaries or responsible parties of any required sales and reinvestments related to qualified stock. IRS anticipates that the likely respondents are individuals, responsible parties, businesses, and for-profit organizations (trustees).

Table 1 provides a high-level description of the collection requirements created or changed within this regulation, and the regulatory sections that detail these requirements. Table 2 provides the estimated burden placed on respondents for each collection requirement. These collection requirements were approved by the OMB under OMB Control Number 1545-2336 pursuant to the emergency procedures in 5 CFR 1320.13.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) imposes certain requirements with respect to Federal rules that are subject to the notice and comment requirements of section 553(b) of the Administrative Procedure Act (5 U.S.C. 551 et seq.) and that are likely to have a significant economic impact on a substantial number of small entities. Unless an agency determines that a proposal is not likely to have a significant economic impact on a substantial number of small entities, section 603 of the RFA requires the agency to present an initial regulatory flexibility analysis (IRFA) of the proposed rule. The Treasury Department and the IRS have not determined whether the proposed rule, when finalized, will likely have a significant economic impact on a substantial number of small entities. This determination requires further study. However, because there is a possibility of significant economic impact on a substantial number of small entities, an IRFA is provided in these proposed regulations. The Treasury Department and the IRS invite comments on both the number of entities affected and the economic impact on small entities.

Pursuant to section 7805(f), this notice of proposed rulemaking has been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

1. Need for and objectives of the rule

The proposed regulations would provide greater access to Trump accounts under section 530A for children who are beneficiaries of Trump accounts; clarity to taxpayers that intend to take advantage of Trump accounts; and clarity to Trump account trustees regarding contributions to these accounts, including qualified general contributions and qualified stock contributions. The proposed regulations are necessary to implement both automatic enrollment of children into Trump accounts and a framework for private donors to make contributions to Trump accounts for a qualified class.

In particular, section 530A provides that a Trump account may be created or organized by the Secretary, and the proposed regulations implement the automatic enrollment of children into Trump accounts, which has been requested by both the Administration and outside stakeholders. These groups have also requested clarity on rules relating to qualified general contributions, so that eligible donors may fund these contributions for Trump accounts. Section 530A provides that qualified general contributions are contributions made by the Secretary pursuant to a general funding contribution, and the proposed regulations would provide rules on how qualified general contributions, including qualified stock contributions, may be made. The proposed regulations would also provide certainty regarding required trustee action, including disclosures to beneficiaries, when Trump accounts contain assets that are not eligible investments.

2. Affected small entities

The RFA directs agencies to provide a description of, and where feasible, an estimate of, the number of small entities that may be affected by the proposed rules, if adopted. The Small Business Administration’s Office of Advocacy estimates in its 2023 Frequently Asked Questions that 99.9 percent of American businesses meet its definition of a small business. The applicability of these proposed regulations does not depend on the size of the business, as defined by the Small Business Administration. These proposed regulations would affect small businesses that are trustees of Trump accounts. The Treasury Department and the IRS estimate that the total anticipated future number of Trump account trustees will be 4,600. Although there is uncertainty as to the exact number of small businesses within this group, the number is estimated to be 2,740.

The Treasury Department and the IRS expect to receive more information on the impact on small businesses through comments on this proposed rule and when taxpayers start to claim and administer Trump accounts using the guidance and procedures provided in these proposed regulations.

3. Impact of the rules

The proposed regulations would provide definitions and rules regarding the election to open Trump accounts (including claiming auto accounts) and contributions to Trump accounts. Taxpayers that are trustees of Trump accounts will have administrative costs related to reading and understanding the rules as well as recordkeeping and reporting requirements. First, responsible parties claiming auto accounts will result in more Trump accounts managed by trustees, leading to higher administrative costs for the trustees. In addition, Trump account trustees must provide a disclosure to a beneficiary regarding the investment of assets when stock held in a Trump account is either de-listed from a national securities exchange or when a Trump account receives cash or other property that is not successor qualified stock. The costs associated with these notifications will vary across different-sized entities.

Although the Treasury Department and the IRS do not have sufficient data to determine precisely the likely extent of the increased costs of compliance, the estimated burden of complying with the recordkeeping and reporting requirements is described in the Paperwork Reduction Act section of the preamble.

4. Alternatives considered

The Treasury Department and the IRS considered alternatives to the proposed regulations. For example, the Treasury Department and the IRS considered not enabling the automatic enrollment of children into Trump accounts and requiring that all elections to open Trump accounts be made by an election on Form 4547. However, the Treasury Department and the IRS decided that automatic enrollment of children into Trump accounts would result in a significant public benefit (that millions of children will have Trump accounts to receive contributions, including qualified general contributions), and is both administratively feasible and necessary to respond to demand for automatic enrollment from the public.

Comments are requested on the requirements in the proposed regulations, including qualified ABLE rollover contributions from auto accounts, qualified geographic areas (which are relevant to the requirements for qualified general contributions), and whether an account beneficiary should be allowed to disclaim an auto account.

5. Duplicative, overlapping, or conflicting Federal rules

The proposed regulations would not duplicate, overlap, or conflict with any relevant Federal rules. The proposed regulations would merely provide procedures, definitions, and requirements to allow eligible Trump account beneficiaries to be enrolled automatically in Trump accounts, and for taxpayers to make contributions to these accounts.

Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) requires that agencies assess anticipated costs and benefits and take certain other actions before issuing a final rule that includes any Federal mandate that may result in expenditures in any one year by a State, local, or Tribal government, in the aggregate, or by the private sector, of $100 million in 1995 dollars, updated annually for inflation. These proposed regulations do not include any Federal mandate that may result in expenditures by State, local, or Tribal governments, or by the private sector in excess of that threshold.

Executive Order 13132 (Federalism) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial, direct compliance costs on State and local governments, and is not required by statute, or preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Executive order. These proposed regulations do not have federalism implications and do not impose substantial direct compliance costs on State and local governments or preempt State law within the meaning of the Executive order.

Pursuant to section 7805(f) of the Code, these proposed regulations have been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business.

This notice of proposed rulemaking proposes rules regarding the election under section 1062(a) to defer payment of tax on qualified sales or exchanges. Proposed § 1.1062-1 would provide general rules and definitions of terms used in the section 1062 regulations (that is, §§ 1.1062-0 through 1.1062-3). Proposed § 1.1062-2 would provide operating rules regarding the availability of the section 1062 election, the manner in which to make the section 1062 election, the amount of, timing of, and manner in which to make the installment payments of the applicable net tax liability, and other special rules. Proposed § 1.1062-3 would provide rules regarding events that would result in the acceleration of unpaid installment payments.

Proposed § 1.1062-2(a)(1) would provide that, in the case of gain from a qualified sale or exchange, the taxpayer may make a section 1062 election to pay in four equal annual installments the portion of the taxpayer’s net income tax for the taxable year of the qualified sale or exchange that is equal to the taxpayer’s applicable net tax liability. Proposed § 1.1062-1(q) would define the term “qualified sale or exchange” to mean a sale or exchange of qualified farmland property to a qualified farmer.

A. Qualified farmland property

Proposed § 1.1062-1(o)(1) would define the term “qualified farmland property” as real property (as defined in proposed § 1.1062-1(o)(8)) that meets the following three requirements. First, the real property must be located in the United States. Second, the real property must, during substantially all of the prior 10-year period (as would be defined in proposed § 1.1062-1(n)), either have been used by the taxpayer as a farm for farming purposes or have been leased by the taxpayer to a qualified farmer for farming purposes. Third, the real property must be subject to a section 1062 covenant (as would be defined in proposed § 1.1062-1(t)) that is attached to the taxpayer’s return for the relevant taxable year as required under section 1062(e). With respect to this third requirement, failure to attach the section 1062 covenant to the return would result in the real property not being qualified farmland property, which would mean that the sale or exchange of that property would not qualify for the section 1062 election.

Proposed § 1.1062-1(j) would define the term “farm” to mean a farm as defined in section 2032A(e)(4), and proposed § 1.1062-1(k) would define the term “farming purposes” to mean farming purposes as defined in section 2032A(e)(5). Finally, proposed § 1.1062-1(r) would define the term “relevant taxable year” of the taxpayer to mean the taxable year of the qualified sale or exchange.

1. Certain Periods of Non-Use Disregarded

Proposed § 1.1062-1(o)(2) would clarify that certain periods of non-use during a prior 10-year period are disregarded for purposes of determining whether real property may be considered qualified farmland property. Under the proposed rule, real property would not fail to be considered as used by the taxpayer as a farm for farming purposes or leased by the taxpayer to a qualified farmer for farming purposes if all necessary functions, such as land management activities (for example, protecting the soil from erosion), are performed to maintain the real property for farming purposes during periods in which one or more of the following conditions is met: the real property is taken out of production pursuant to a Federal, State, Tribal, or local government program; the real property is taken out of production pursuant to recognized good farming practices (for example, laying fallow or conditioning the soil); or the real property is taken out of production due to unforeseen events caused by factors outside the taxpayer’s control.

2. Certain Acquisitions of Qualified Farmland Property During the Prior 10-Year Period

Proposed § 1.1062-1(o)(3) would address limited cases in which real property acquired by the taxpayer during the prior 10-year period may be considered to be used or leased by the taxpayer during the prior 10-year period. Under proposed § 1.1062-1(o)(3)(i), if the taxpayer acquired the real property during the prior 10-year period in a transaction in which the taxpayer’s holding period for the real property is determined under section 1223(1) of the Code (for example, in an exchange under section 1031 of the Code), the taxpayer may include the period during the prior 10-year period for which the taxpayer used the real property exchanged for the acquired real property as a farm for farming purposes, or leased the real property exchanged for the acquired real property to a qualified farmer for farming purposes. In addition, under proposed § 1.1062-1(o)(3)(ii), if the taxpayer acquired the real property during the prior 10-year period in a transaction in which the taxpayer’s holding period for the real property is determined under section 1223(2) (for example, in a reorganization described in section 368(a) of the Code), the taxpayer may include the period during the prior 10-year period for which the other person referenced in section 1223(2) used the real property acquired as a farm for farming purposes, or leased the real property acquired to a qualified farmer for farming purposes. Finally, proposed § 1.1062-1(o)(3)(iii) would provide that if the taxpayer acquired the real property during the prior 10-year period from a decedent by reason of that individual’s death, the taxpayer may include the period during the prior 10-year period for which the decedent used the real property acquired as a farm for farming purposes, or leased the real property acquired to a qualified farmer for farming purposes.

3. Real Property Partially Used for Farming Purposes; Residential Real Property; Portion of Real Property Subject to Covenant Attached to Return

Proposed § 1.1062-1(o)(4) would clarify that residential buildings and related improvements (as described in section 2032A(e)(3), substituting the requirements of section 1062(d) for the requirements under section 2032A(b)(1)(C)) are considered to be used or leased by the taxpayer for farming purposes. Proposed § 1.1062-1(o)(5) would clarify that if only a portion of the real property is used or leased for farming purposes, only that portion of the real property is considered to be qualified farmland property. Similarly, proposed § 1.1062-1(o)(6) would clarify that, if only a portion of the real property is subject to a section 1062 covenant that is attached to the return for the relevant taxable year, only that portion of the real property is considered to be qualified farmland property.

4. Real Property Used or Leased by a Pass-Through Entity

Proposed § 1.1062-1(o)(7)(i) would clarify that real property used or leased by a pass-through entity in a manner described in proposed § 1.1062-1(o)(1)(i) during any period is considered used or leased in such manner by each person who holds a direct or indirect beneficial or equity interest in that pass-through entity during such period. A person who holds a direct or indirect beneficial or equity interest in the pass-through entity for only a portion of such period is considered to use or lease the property in a manner described in proposed § 1.1062-1(o)(1)(i) only during such portion of the period. See part III.A.2 of this Explanation of Provisions for the proposed definition of “pass-through entity.” Proposed § 1.1062-1(o)(7)(ii) would further provide that, in the case of a sale or exchange of real property by a pass-through entity, the determination of whether the real property is qualified farmland property must be made separately by each person who holds a direct or indirect beneficial or equity interest in that pass-through entity.

5. Section 1062 Covenant

Proposed § 1.1062-1(t) would define a “section 1062 covenant” to mean a covenant or other legally enforceable restriction with respect to real property that meets five requirements. First, the section 1062 covenant must prohibit using the real property as anything other than a farm for farming purposes for the 10-year period following the date of the sale or exchange. Second, the section 1062 covenant must be executed prior to or contemporaneously with the closing of the sale or exchange. Third, the section 1062 covenant must be recorded in the land records office of the jurisdiction in which the real property is located prior to or contemporaneously with the filing of the deed of transfer of the real property. Fourth, the section 1062 covenant must be enforceable against the buyer and any future owners of the real property prior to or beginning with the date of the sale or exchange. Finally, the section 1062 covenant must be enforceable against the buyer and any future owners of the real property, that is, the covenant must “run with the land,” for a period of at least 10 years following the date of the sale or exchange. The term “section 1062 covenant” would include an easement or other interest in real property that, under applicable law, has attributes similar to a covenant (for example, an equitable servitude).

B. Qualified farmer

Proposed § 1.1062-1(p)(1) would define a “qualified farmer” to mean an individual who is actively engaged in farming within the meaning of 7 U.S.C. 1308-1(b) and (c). See, for example, 7 U.S.C. 1308-1(b)(2)(A) (providing a general rule regarding when a person is considered to be actively engaged in farming). However, proposed § 1.1062-1(p)(2) would provide that a buyer is not treated as a qualified farmer if, pursuant to a plan or an arrangement between the seller, buyer, and a third party existing at the time of a sale or exchange, the qualified farmland property subsequently is transferred to a person who is neither a related person within the meaning of section 267(b) or section 707(b)(1) of the Code with respect to the individual, nor a qualified farmer.

A. Eligibility to make election

1. In General

As described in part II of this Explanation of Provisions, proposed § 1.1062-2(a)(1) would provide that, in the case of gain from a qualified sale or exchange, the taxpayer may make a section 1062 election to pay in four equal annual installments the portion of the taxpayer’s net income tax for the taxable year of the qualified sale or exchange that is equal to the taxpayer’s applicable net tax liability. Proposed § 1.1062-2(a)(2)(i)(A) thus would provide that only a person with an applicable net tax liability may elect to make a section 1062 election. Proposed § 1.1062-2(a)(2)(i)(B) further would provide that, absent an exception, a section 1062 election may be made only by a taxpayer with respect to whom none of the acceleration events described in proposed § 1.1062-3(b)(1) have occurred after the qualified sale or exchange but before the election is made.

2. Pass-Through Entities

a. Partnerships and S corporations

As noted in the Background section of this preamble, section 1062(c)(2) provides that, in the case of a qualified sale or exchange by a partnership or an S corporation, the section 1062 election is made at the partner or shareholder level and authorizes the Secretary to issue regulations or other guidance as necessary to carry out the purposes of section 1062(c)(2).

Proposed § 1.1062-1(m) would define the term “pass-through entity” as a partnership, an S corporation, or any other person other than a C corporation if the person’s gain from a qualified sale or exchange may be included in the income of one or more direct or indirect owners or beneficiaries of the person. This term would not include a real estate investment trust (as defined in section 856 of the Code), a regulated investment company (as defined in section 851 of the Code), or a bankruptcy estate under section 1398 of the Code.

Proposed § 1.1062-2(a)(2)(ii) would provide, in part, that a partner or an S corporation shareholder may make a section 1062 election with respect to that partner’s or shareholder’s applicable net tax liability arising from a qualified sale or exchange by a pass-through entity. This rule would apply even if there were several tiers of pass-through entities between the pass-through entity that engaged in the qualified sale or exchange and the taxpayer with the applicable net tax liability.

b. Trusts and decedent’s estates

In certain cases, a trust or a decedent’s estate may pass through some or all of its income, including gain from a qualified sale or exchange, to one or more beneficiaries. See, for example, sections 661 through 663 of the Code. In that case, the applicable net tax liability will be borne, in full or in part, by the beneficiaries rather than the trust or the decedent’s estate. Consistent with the rules for partnerships and S corporations, the definition of “pass-through entity” in proposed § 1.1062-1(m) would include a trust or a decedent’s estate because a trust or a decedent’s estate may pass through to one or more beneficiaries gain from a qualified sale or exchange. In that event, under proposed § 1.1062-2(a)(2)(ii), the beneficiary of the trust or decedent’s estate would be permitted to make a section 1062 election with respect to the beneficiary’s applicable net tax liability arising from a qualified sale or exchange by a pass-through entity.

c. Disregarded entities and grantor trusts

Under existing rules (see, for example, § 301.7701-3(b)), an entity may be disregarded as separate from its owner for Federal income tax purposes. Accordingly, for Federal income tax purposes (including for purposes of section 1062), activities of a disregarded entity are treated as the activities of the owner. Additionally, a grantor or other person treated as owning any portion of a trust under sections 671 through 679 of the Code (grantor trust) is treated as the owner of that portion of the trust property for Federal income tax purposes. See, for example, Revenue Ruling 85-13 (1985-1 C.B. 184). In the case of a qualified sale or exchange by a disregarded entity or a grantor trust, the qualified sale or exchange would be considered to have been made under existing rules by the owner of the disregarded entity or the grantor, respectively. Therefore, a disregarded entity or a grantor trust would not be a “pass-through entity” under proposed § 1.1062-1(m).

d. Pass-through entities subject to tax at the entity level

In certain cases, a trust, a decedent’s estate, or an S corporation may be subject to Federal income tax at the entity level, including on gain from a qualified sale or exchange. See, for example, sections 641 and 1374 of the Code. To address these situations, the definition of a “pass-through entity” in proposed § 1.1062-1(m) would provide that an entity other than a C corporation may be a pass-through entity even if it is subject to an entity-level tax with respect to a qualified sale or exchange, if any gain from the qualified sale or exchange may be included in the income of one or more direct or indirect owners or beneficiaries. For example, if a trust is subject to Federal income tax on a portion of its gain from a qualified sale or exchange and its beneficiaries are subject to tax on the remaining portion, the trust is treated as a pass-through entity.

Proposed § 1.1062-2(a)(2)(ii) would further provide that a pass-through entity may make a section 1062 election with respect to an entity-level applicable net tax liability. Thus, a trust with an entity-level tax liability from a qualified sale or exchange, or an S corporation subject to tax under section 1374 with respect to a qualified sale or exchange, may make a section 1062 election.

Additionally, proposed § 1.1062-2(a)(2)(ii) would provide that a section 1062 election by a pass-through entity is made solely with respect to its own applicable net tax liability and is independent from, and has no effect on, a section 1062 election by an owner or beneficiary of the pass-through entity with respect to the owner’s or beneficiary’s applicable net tax liability, and vice versa. Thus, a pass-through entity cannot make a section 1062 election on behalf of an owner or beneficiary, and vice versa. Rather, both the passthrough entity and each owner or beneficiary may make the election under section 1062 with regard to their respective shares of that gain.

3. Consolidated Group

Proposed § 1.1062-2(a)(2)(iii) would provide that, if a “member” of a “consolidated group” (within the meaning of § 1.1502-1(b) and (h), respectively) recognizes gain from a qualified sale or exchange, the consolidated group is treated as the taxpayer.

4. Election Unavailable Due to Acceleration Event

Proposed § 1.1062-2(a)(2)(i)(B) generally would not allow a taxpayer to make a section 1062 election if, with respect to the taxpayer, any acceleration event, as described in proposed § 1.1062-3(b)(1), has occurred after the qualified sale or exchange but before the election is due. See part IV.A of this Explanation of Provisions for a discussion of acceleration events. However, proposed § 1.1062-2(a)(2)(iv) would permit such a taxpayer to make the section 1062 election after the occurrence of an acceleration event if the election is made in accordance with proposed § 1.1062-2 and either the acceleration event is the death of the taxpayer, or the eligible section 1062 transferee exception applies. See part IV.B of this Explanation of Provisions.

B. Time and manner of making election

1. In General

Proposed § 1.1062-2(b)(1) would require that, in order to make a section 1062 election, a taxpayer must complete and file with its return a Form 1062, Deferral of Tax on Gain from the Sale or Exchange of Qualified Farmland Property to Qualified Farmers, and a Schedule A (Form 1062), Section 1062 Gain From the Sale or Exchange of Qualified Farmland Property to a Qualified Farmer, or in any other manner prescribed in guidance published in the Internal Revenue Bulletin or in forms and instructions.

2. Pass-Through Entities

To ensure that a partner, a shareholder, a beneficiary, or any other owner of a pass-through entity has the information necessary to make a section 1062 election with respect to its applicable net tax liability arising from a qualified sale or exchange by the pass-through entity, proposed § 1.1062-2(b)(2)(i)(A) and (B) would require the pass-through entity to complete and file a Schedule A (Form 1062) in accordance with its instructions (that is, the entity files only the Schedule A (Form 1062), but not the Form 1062 itself), and to provide a copy of its completed Schedule A (Form 1062) and the section 1062 covenant to its owners or beneficiaries. If a pass-through entity provides a copy of its Schedule A (Form 1062) and section 1062 covenant to an owner that is itself a pass-through entity (upper-tier pass-through entity), proposed § 1.1062-2(b)(2)(ii) would require the upper-tier pass-through entity to forward a copy of the Schedule A (Form 1062) and the section 1062 covenant to its owners, and so on through any additional tiers.

Proposed § 1.1062-2(b)(2)(iii) would require a pass-through entity to identify and report on the Schedule K-1 issued to its owners or beneficiaries each owner’s or beneficiary’s allocable share of the gain attributable to the qualified sale or exchange and such other information as may be required by the prescribed forms and the accompanying instructions. Proposed § 1.1062-2(b)(2)(iv) would provide that, if a pass-through entity fails to comply with the requirements of proposed § 1.1062-2(b)(2)(i) through (iii), its owners would be ineligible to make the section 1062 election with respect to any gain allocated by the pass-through entity. Proposed § 1.1062-2(b)(2)(v) would provide that a pass-through entity does not complete or file Form 1062 itself unless the pass-through entity has an entity-level applicable net tax liability and wishes to make a section 1062 election with respect to that tax liability. Lastly, proposed § 1.1062-2(b)(2)(vi) would provide that, in the case of a taxpayer who is a partner, a shareholder, a beneficiary, or any other owner of a pass-through entity that satisfies the requirements in § 1.1062-2(b)(2)(i) through (iii), the taxpayer makes the section 1062 election by completing and filing Form 1062 and Schedule A (Form 1062) with its return for the relevant taxable year.

3. Consolidated Groups

With respect to a consolidated group, proposed § 1.1062-2(a)(2)(iii) would provide that the agent for the group (within the meaning of § 1.1502-77) must make the section 1062 election.

4. Revocation

Proposed § 1.1062-2(b)(3) would provide that, once made, a section 1062 election may be revoked only by paying the full amount of the remaining unpaid applicable net tax liability.

C. Installment payments

1. General Rules

Proposed § 1.1062-2(c)(1) would provide that, if a taxpayer makes a section 1062 election, the amount of each installment payment is 25 percent of the taxpayer’s applicable net tax liability. Proposed § 1.1062-2(c)(2) would provide that the first installment payment is due on the due date (without regard to extensions) for filing the return for the relevant taxable year. For example, a calendar-year individual taxpayer making a section 1062 election for the relevant taxable year must pay the individual’s first installment payment on or before April 15, even if that individual has an extension of time to file the individual’s return until October 15. That is, the first installment payment may be due before the taxpayer makes the section 1062 election on the taxpayer’s return for the relevant taxable year. Similarly, each succeeding installment payment is due on the due date (without regard to extensions) for filing the return for the taxable year following the taxable year with respect to which the previous installment payment was made.

However, proposed § 1.1062-2(c)(3) would provide that, if a taxpayer is a specified individual with respect to a taxable year within which an installment payment is due, then for purposes of determining the due date of an installment payment, the due date (without regard to extensions) for filing the return for the taxable year will be treated as the fifteenth day of the sixth month following the close of the prior taxable year. Proposed § 1.1062-1(v) would define a “specified individual” as a person described in § 1.6081-5(a)(5) or (6) (which means a United States citizen or resident whose tax home and abode, in a real and substantial sense, is outside the United States and Puerto Rico or a United States citizen or resident in military or naval service on duty, including non-permanent or short term duty, outside the United States and Puerto Rico) who receives an extension of time under § 1.6081-5(a) for filing a return and paying any tax shown on the return for the taxable year.

2. Increased Installment Payments Due to Deficiency

Proposed § 1.1062-2(c)(4)(i) would provide that, if a taxpayer makes a section 1062 election, any deficiency assessed with respect to the taxpayer’s applicable net tax liability is prorated to the required installment payments. Proposed § 1.1062-2(c)(4)(ii)(A) would provide that, if the due date for an installment payment to which the deficiency is prorated has passed, then the amount of any deficiency prorated to that installment payment must be paid on notice and demand by the Commissioner. Proposed § 1.1062-2(c)(4)(ii)(B) would provide that, if the due date of an installment payment to which the deficiency is prorated has not passed, then the prorated amount is due at the same time as, and as part of, the relevant installment payment.

However, proposed § 1.1062-2(c)(4)(iii) would provide that this proration rule does not apply if a deficiency is due to negligence, intentional disregard of rules and regulations, or fraud with intent to evade tax. In that event, the full amount of the deficiency (including any applicable interest and penalties) must be paid on notice and demand by the Commissioner.

D. Applicable net tax liability

Proposed § 1.1062-2(d) would provide that a taxpayer’s applicable net tax liability equals the excess (if any) of the taxpayer’s net income tax for the relevant taxable year, over the taxpayer’s net income tax for the relevant taxable year determined without regard to the taxpayer’s gain that is recognized from the qualified sale or exchange. Proposed § 1.1062-1(l) would define the term “net income tax” to mean the taxpayer’s regular tax liability (as defined in section 26(b) of the Code) reduced by the credits allowed under subparts A, B, and D of part IV of subchapter A of chapter 1 of the Code.

Proposed § 1.1062-2(e) would provide that, for purposes of determining the amount of gain the taxpayer recognizes from a sale or exchange of property, only a portion of which is qualified farmland property, the taxpayer must equitably allocate its cost or other basis and the amount realized between the portion of the property that is qualified farmland property and the portion that is not qualified farmland property. See § 1.61-6 of the Income Tax Regulations. Taxpayers must maintain all documentation demonstrating how they made their equitable allocations.

Proposed § 1.1062-2(f) would provide that, in determining the amount of the taxpayer’s gain from a qualified sale or exchange, only the gain from the qualified sale or exchange that is included in gross income and recognized in the relevant taxable year is used. See the example in proposed § 1.1062-2(g)(5).

A. Acceleration events

Proposed § 1.1062-3(a) would provide that, if a taxpayer makes a section 1062 election, and if an acceleration event subsequently occurs with respect to that taxpayer, then the due date for the unpaid portion of all remaining installment payments is accelerated unless the eligible section 1062 transferee exception (as set forth in proposed § 1.1062-3(c)) applies.

1. Acceleration Events Applicable to All Taxpayers

Proposed § 1.1062-3(b)(1)(i) would provide that the assessment of an addition to tax for the failure to timely pay an installment payment is an acceleration event. Proposed § 1.1062-3(b)(2)(i) would provide that, in the case of such an acceleration event, the due date for the unpaid portion of all remaining installment payments is the date the addition to tax is assessed on the untimely installment payment.

2. Acceleration Events Applicable to Individual Taxpayers

Proposed § 1.1062-3(b)(1)(ii) would provide in part that, in the case of a taxpayer who is an individual, the death of that individual is an acceleration event. Proposed § 1.1062-3(b)(2)(ii) would provide that, in the case of such an acceleration event, the due date for the unpaid portion of all remaining installment payments is the due date (determined without regard to any extension of time for filing) for filing the individual’s return for the taxable year in which the individual dies.

3. Acceleration Events Applicable to Trusts and Estates

Proposed § 1.1062-3(b)(1)(iii) would provide in part that, in the case of a taxpayer that is a non-grantor trust or a decedent’s estate, a liquidation or sale, exchange, or other disposition of substantially all the assets of the taxpayer (including in a title 11 or similar case) is an acceleration event. Proposed § 1.1062-3(b)(2)(iii) would provide that, in the case of such an acceleration event, the due date for the unpaid portion of all remaining installment payments is the date of the acceleration event (or, in a title 11 or similar case, the day before the petition is filed).

As described in part III.A.2 of this Explanation of Provisions, under proposed § 1.1062-2(a)(2)(ii), a non-grantor trust or a decedent’s estate that passes through some but not all the gain with respect to a qualified sale or exchange may make a section 1062 election with respect to its entity-level applicable net tax liability, and a beneficiary may make a section 1062 election with respect to the beneficiary’s applicable net tax liability. In that case, the non-grantor trust or decedent’s estate is treated as a separate taxpayer from the beneficiary for purposes of section 1062. Thus, the death of the individual beneficiary would be an acceleration event for that individual’s remaining unpaid applicable net tax liability, but it would not be an acceleration event for the trust’s or decedent’s estate’s remaining unpaid applicable net tax liability. Similarly, the termination of the trust or decedent’s estate would be an acceleration event for the trust or decedent’s estate, but it would not be an acceleration event for any individual beneficiary with an applicable net tax liability prior to the trust’s or estate’s termination.

As described in part IV.B of this Explanation of Provisions, the eligible section 1062 transferee exception would apply in the case of acceleration due to a trust or estate selling substantially all its assets provided all requirements for the exception are satisfied.

4. Acceleration Events Applicable to C Corporations

Proposed § 1.1062-3(b)(1)(iii) through (vi) would describe acceleration events for a taxpayer that is a C corporation. An acceleration event includes: a liquidation or sale, exchange, or other disposition of substantially all the assets of the taxpayer (including in a title 11 or similar case); a cessation of business by the taxpayer; in the case of a C corporation that is not a member of a consolidated group, the C corporation becoming a member of a consolidated group; and in the case of a C corporation that is a member of a consolidated group, the consolidated group ceasing to exist or otherwise discontinuing to file a consolidated return.

Proposed § 1.1062-1(d) would define the term “C corporation” to mean a C corporation as defined in section 1361(a)(2) of the Code. This definition would include any corporation operating on a cooperative basis. Proposed § 1.1062-1(s) would define the term “S corporation” to mean an S corporation as defined in section 1361(a)(1). Additionally, proposed § 1.1062-3(a) would provide that if an S corporation has an applicable net tax liability or a remaining unpaid applicable net tax liability at the entity-level, then the S corporation is treated as a C corporation for purposes of determining whether there is an acceleration event. Accordingly, if an S corporation previously was a C corporation, and the S corporation makes an entity-level section 1062 election with respect to an applicable net tax liability from gain on a qualified sale or exchange that is subject to tax under section 1374, then the S corporation is treated as a C corporation for purposes of determining whether there is an acceleration event with respect to that applicable net tax liability. Additionally, if a C corporation makes a section 1062 election, and if the C corporation subsequently elects to be taxed as an S corporation under section 1362(a) of the Code while there is a remaining unpaid applicable net tax liability, the S corporation is treated as a C corporation for purposes of determining whether there is an acceleration event with respect to that remaining unpaid applicable net tax liability.

Proposed § 1.1062-3(b)(2)(iii) would provide that, in the case of an acceleration event described in proposed § 1.1062-3(b)(1)(iii) through (vi), the due date for the unpaid portion of all remaining installment payments is the date of the acceleration event (or, in a title 11 or similar case, the day before the petition is filed). As described in part IV.B of this Explanation of Provisions, the eligible section 1062 transferee exception would apply in the case of acceleration due to a C corporation selling substantially all its assets provided all requirements for the exception are satisfied.

B. Eligible section 1062 transferee exception

1. In General

Proposed § 1.1062-3(c)(1) would provide that the acceleration rules described in part IV.A of this Explanation of Provisions do not apply if the acceleration event is a sale of substantially all the assets of the eligible section 1062 transferor, and the eligible section 1062 transferor and the eligible section 1062 transferee enter into an agreement (transfer agreement) that satisfies the requirements set forth in proposed § 1.1062-3(c)(2). Proposed § 1.1062-1(i) would define the term “eligible section 1062 transferor” to mean a C corporation, trust, or estate that makes a section 1062 election, and with respect to which an acceleration event has occurred. Proposed § 1.1062-1(g) would define the term “eligible section 1062 transferee” to mean a single (that is, one) United States person that is not a partnership or an S corporation, a debtor in a title 11 or similar case, or insolvent (within the meaning of section 108(d)(3) of the Code). Section 1062 generally does not view partnerships and S corporations as taxpayers. See section 1062(c)(2). In this regard, since the statute treats an assumption of a section 1062 liability as though the obligor itself (in this case, a partnership or S corporation) incurred the liability, excluding partnerships and S corporations from the definition of an eligible section 1062 transferee is consistent with statute’s intent – that is, partnerships and S corporations are generally not entities eligible to incur a section 1062 liability.

2. Transfer Agreement

Proposed § 1.1062-3(c)(2)(i) would require a transfer agreement to be entered into by an eligible section 1062 transferor and an eligible 1062 transferee by timely filing a Form 1062-T, Transfer Agreement Under Section 1062(b)(2)(C), or in any other manner prescribed in guidance published in the Internal Revenue Bulletin or in forms and instructions. Proposed § 1.1062-3(c)(2)(iv) would set forth the items required to be included in the transfer agreement.

Proposed § 1.1062-3(c)(2)(ii)(A) generally would require the transfer agreement to be filed by both the eligible section 1062 transferor and the eligible section 1062 transferee on or before the date that is 30 days after the date of the acceleration event with respect to which the transfer agreement is entered into, with two exceptions. First, proposed § 1.1062-3(c)(2)(ii)(B) would provide that, if an acceleration event occurs prior to the date the taxpayer makes a section 1062 election, the transfer agreement with respect to that acceleration event will be timely filed if the eligible section 1062 transferor files the transfer agreement simultaneously with its section 1062 election. Second, proposed § 1.1062-3(c)(2)(ii)(C) would provide that, if an acceleration event occurs prior to the date of publication of final regulations under section 1062 in the Federal Register, the transfer agreement with respect to that acceleration event will be treated as timely filed if it is filed within 30 days after the date of publication of final regulations under section 1062 in the Federal Register.

Proposed § 1.1062-3(c)(2)(iii) would require the transfer agreement to be signed under penalties of perjury by both a person who is authorized to sign a return on behalf of the eligible section 1062 transferor, and a person who is authorized to sign a return on behalf of the eligible section 1062 transferee. With respect to consolidated groups, proposed § 1.1062-2(a)(2)(iii) would require the agent for the group to enter into any transfer agreement.

3. Consent of Commissioner

Proposed § 1.1062-3(c)(3)(i) would provide that, if an eligible section 1062 transferor and an eligible section 1062 transferee file a transfer agreement satisfying the requirements of proposed § 1.1062-3(c)(2), the eligible section 1062 transferee will be considered to have entered into an agreement with the Commissioner for purposes of proposed § 1.1062-3(c). If the Commissioner determines that additional information (for example, additional information regarding the ability of the eligible section 1062 transferee to fully pay the remaining applicable net tax liability) is necessary, the eligible section 1062 transferee would be required to provide that information upon request.

However, proposed § 1.1062-3(c)(3)(ii) would provide what could occur if the Commissioner determines that a transfer agreement contains a material misrepresentation or material omission, or if the eligible section 1062 transferee does not provide any additional information requested by the Commissioner within a time frame communicated by the Commissioner to the eligible section 1062 transferee. The Commissioner either may reject the transfer agreement (effective as of the date of the related acceleration event), or determine that an acceleration event has occurred with respect to the eligible section 1062 transferee as of the date of the Commissioner’s determination that a transfer agreement contains a material misrepresentation or material omission (such that any unpaid installment payments become due on that date).

4. Effect of Assumption

Proposed § 1.1062-3(c)(4)(i) would provide that, if the eligible section 1062 transferee exception applies with respect to an acceleration event, the eligible section 1062 transferee assumes all outstanding obligations and responsibilities of the eligible section 1062 transferor with respect to the applicable net tax liability as though the eligible section 1062 transferee had included the gain from the qualified sale or exchange in that transferee’s income. Accordingly, the eligible section 1062 transferee is responsible for making payments and reporting with respect to any unpaid installment payments of the eligible section 1062 transferor.

Proposed § 1.1062-3(c)(4)(ii) would provide that, if an acceleration event described in proposed § 1.1062-3(b)(1)(iii) through (vi) subsequently occurs with respect to an eligible section 1062 transferee, any unpaid installment payments of the eligible section 1062 transferor that were assumed by the eligible section 1062 transferee will become due on the date provided in proposed § 1.1062-3(b)(2)(iii).

These proposed regulations are not subject to review under section 6(b) of Executive Order 12866 pursuant to the Memorandum of Agreement (July 4, 2025) between the Treasury Department and the Office of Management and Budget (OMB) regarding review of tax regulations.

The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) (PRA) generally requires that a Federal agency obtain the approval of the OMB before collecting information from the public, whether that collection of information is mandatory, voluntary, or required to obtain or retain a benefit. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by the OMB.

The recordkeeping requirements mentioned within these proposed regulations are considered general tax records under section 6001 of the Code. A taxpayer would use these records to establish its eligibility for the section 1062 election or the eligible section 1062 transferee exception. These records are required for the IRS to validate that taxpayers have met the regulatory requirements and are required as proof of their qualification for the section 1062 election. For PRA purposes, general tax records are already approved by OMB under 1545-0047 for tax-exempt organization filers, 1545-0074 for individual filers, 1545-0092 for estate and trust filers, and 1545-0123 for business filers. These proposed regulations are not changing this already approved OMB collection.

The collections of information in these proposed regulations include reporting, third-party disclosure, and recordkeeping requirements that are necessary to ensure that taxpayers qualify for the section 1062 election. The reporting requirements in these proposed regulations would include providing a copy of the section 1062 covenant found in § 1.1062-1(o)(1)(ii), and listing the information required to make a section 1062 election in § 1.1062-2(b)(1). Section 1.1062-2(b)(2) also would require a pass-through entity to provide information regarding the qualified sale or exchange to the IRS and its owners or beneficiaries and a copy of the section 1062 covenant to its owners or beneficiaries. The collections will be used by the IRS for tax compliance purposes and by taxpayers to ensure they qualify for the section 1062 election. The burden for these requirements will be approved by OMB, in accordance with 5 CFR 1320.10, under OMB control numbers 1545-0047 for tax-exempt organization filers, 1545-0074 for individual filers, 1545-0092 for estate and trust filers, and 1545-0123 for business entities.

In addition, proposed § 1.1062-3(c)(2) contains collection of information and reporting requirements for an eligible section 1062 transferor and an eligible section 1062 transferee. The collections of information in proposed § 1.1062-3(c)(2)(iii) and (iv) include reporting, third-party disclosure, and recordkeeping requirements that are necessary to ensure that taxpayers qualify for the eligible section 1062 transferee exception set forth in proposed § 1.1062-3(c). These collections will be used by the IRS for tax compliance purposes and by taxpayers to ensure they qualify for the eligible section 1062 transferee exception.

The IRS is soliciting feedback on the collection requirements for the eligible section 1062 transferee exception. The IRS anticipates that the likely respondents for the eligible section 1062 transferee exception are C corporations, trusts, and estates.

Estimated number of respondents: 1,030.

Estimated average annual burden per respondent: 3 hours, 12 minutes.

Estimated total annual reporting burden: 3,296 hours.

The collections contained in this notice of proposed rulemaking with respect to the eligible section 1062 transferee exception have been submitted to the OMB for review in accordance with the PRA under OMB Control Number 1545-NEW. Commenters are strongly encouraged to submit public comments electronically. Written comments and recommendations for the proposed information collection should be sent to https://www.reginfo.gov/public/do/PRAMain, with copies to the IRS. Find this particular information collection by selecting “Currently under Review - Open for Public Comments” then by using the search function. Submit electronic submissions for the proposed information collection to the IRS via email at pra.comments@irs.gov (indicate REG-117095-25 on the Subject line). Comments on the collection of information should be received by November 30, 2026.

Comments are specifically requested concerning: (i) Whether the proposed collection of information is necessary for the proper performance of the functions of the IRS, including whether the information will have practical utility; (ii) the accuracy of the estimated burden associated with the proposed collection of information; (iii) how the quality, utility, and clarity of the information to be collected may be enhanced; (iv) how the burden of complying with the proposed collection of information may be minimized, including through the application of automated collection techniques or other forms of information technology; and (v) estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.

It is hereby certified that these proposed regulations would not have a significant economic impact on a substantial number of small entities pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6). The proposed rule would affect any entity electing to pay in installments the tax on the gain from the sale or exchange of qualified farmland property to an individual qualified farmer. Qualified farmland property is defined as real property located in the United States, that for substantially all of the prior 10-year period, has been used by the taxpayer as a farm for farming purposes or has been leased by the taxpayer to a qualified farmer for farming purposes and is subject to a section 1062 covenant. This election is voluntary.

Based on 2022 U.S. Census Bureau data, the Small Business Administration Office of Advocacy published a 2025 Small Business Profile showing there are more than 36.2 million U.S. small businesses. Based on filing data for the 2023 taxable year, the Treasury Department and the IRS estimate that approximately 1.9 million small entities may qualify to make the election under section 1062, but likely less will be impacted because this provision applies solely to entities that sell or exchange qualified farmland property to an individual qualified farmer during the taxable year. Based on the current data, the proposed regulations will not affect a substantial number of small entities. Further, the economic impact of the proposed regulations is not likely to be significant. Although a small business entity must complete and file additional forms to make a section 1062 election, the estimated time and cost burden per affected entity for completing and filing this election is $237.40 or 8.45 hours. Furthermore, the election is voluntary, and the small entity will economically benefit by making the election because it may defer the payment of tax on the gain from the sale or exchange of qualified farmland property over a four-year period. Thus, the economic impact of these proposed regulations is not likely to be significant.

Notwithstanding this certification, the Treasury Department and the IRS welcome comments on the impact of these proposed regulations on small entities.

Pursuant to section 7805(f) of the Code, the proposed regulations will be submitted to the Chief Counsel for the Office of Advocacy of the Small Business Administration for comment on their impact on small business.

Section 202 of the Unfunded Mandates Reform Act of 1995 requires that agencies assess anticipated costs and benefits and take certain other actions before issuing a final rule that includes any Federal mandate that may result in expenditures in any one year by a State, local, or Tribal government, in the aggregate, or by the private sector, of $100 million in 1995 dollars, updated annually for inflation. These proposed regulations do not include any Federal mandate that may result in expenditures by State, local, or Tribal governments, or by the private sector, in excess of that threshold.

Executive Order 13132 (Federalism) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial, direct compliance costs on State and local governments, and is not required by statute, or preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Executive order. These proposed regulations do not have federalism implications, do not impose substantial direct compliance costs on State and local governments, and do not preempt State law within the meaning of the Executive order.