How IRS Updates for 2025 Will Impact Tax Professionals and Filers

Taxes might not be anyone’s favorite topic, but it's worth paying attention when the IRS shakes things up. With updates ranging from ethical overhauls for tax professionals to clean energy credits and disaster relief extensions, these changes are designed to make a difference for individuals, businesses, and tax professionals. Let’s dive into what’s new and why you should care.

No Funny Business Allowed

The IRS is giving Circular 230 a much-needed facelift, focusing on ethics, professionalism, and tech-savviness. First on the chopping block? Contingency fees. These fees—where tax preparers take a cut of your refund—are being labeled “disreputable conduct.” While some argue this payment model helps low-income clients, the IRS believes it’s a breeding ground for risky claims and conflicts of interest.

But it’s not all about fees. The IRS calls on tax practitioners to level up their tech skills, requiring them to implement data security policies, incident response plans, and other tech measures. Oh, and appraisers? The new rules tighten standards for disqualification and clean up outdated requirements, ensuring appraisals meet today’s expectations. These updates send a clear message: tax professionals need to up their game and play fair, or risk losing the trust of their clients and the IRS.

Green Is the New Gold

The IRS and Treasury are throwing major weight behind renewable energy with expanded tax credits under Sections 45Y and 48E. These “technology-neutral” credits now go beyond solar and wind to include geothermal or hydrogen tax credits linking to nuclear, and even marine technologies. But the real MVP? The Clean Electricity Low-Income Communities Bonus Credit (48E(h)). If your project benefits low-income households, Indian Lands, or affordable housing developments, you can score an extra 10-20% credit on top of the standard 30%. That’s some serious green for going green.

According to the Department of Energy, these tax credits could save U.S. households up to $38 billion in electricity costs by 2030. But it’s not just about the savings—it’s about creating jobs and building a greener future. As Treasury Secretary Janet Yellen put it, “These rules ensure the clean energy boom benefits all Americans, driving down costs and building energy resilience.”

Turning the Tide

Low-income communities are also getting a slice of the green energy pie, thanks to the Clean Electricity Low-Income Communities Bonus Credit (48E(h)). This program expands on the 48(e)-bonus credit, focusing on reducing energy costs and fostering investments in underserved areas. The Treasury reported over 57,000 applications in the second year of the program, expected to generate $4 billion in public and private investments annually.  With annual allocations set to support 1.8 gigawatts of clean energy generation from 2025 to 2032, this program is a cornerstone of the government’s commitment to equitable and sustainable energy growth.

The IRS Cuts You Some Slack

When disaster strikes, taxes are probably the last thing on your mind. Luckily, the IRS has your back with extended deadlines for those in federally declared disaster zones. If you’re in Louisiana, Vermont, Puerto Rico, or parts of 14 states, you’ve got until February 3, 2025, to file your 2023 returns. Meanwhile, taxpayers in Alabama, Florida, and Georgia can take it easy until May 1, 2025—this includes their 2024 filings too. And for those affected by terrorist attacks in Israel, Gaza, or the West Bank, the deadline stretches all the way to September 30, 2025. These extensions aren’t just about avoiding penalties—they’re a chance to get your ducks in a row. Whether it’s claiming casualty loss deductions or stabilizing business operations, the IRS’s relief programs are designed to make rebuilding a little easier. 

Why These Updates Matter

These IRS changes are like a breath of fresh air in the world of taxes. Circular 230 is raising the bar for ethics and professionalism, clean energy credits are slashing energy costs while boosting sustainability, and disaster relief deadlines are giving taxpayers room to recover. For tax professionals, this is your moment to shine. Whether you’re helping clients claim clean energy credits or guiding them through disaster relief programs, these updates are a chance to show your expertise and build trust. The IRS isn’t just asking for compliance—they’re setting the stage for a smarter, greener, and fairer tax system. So, roll up your sleeves and get ready to make the most of these changes. Because while taxes might not be exciting, these updates could be just the ticket to making a real impact. Get the Scoop Before Everyone Else – Subscribe to MYCPE ONE Insights Today!