The Reed Report: Week of Oct 19–25, 2026

Following up on last week’s federal dyed diesel waiver, the IRS said on October 21 that it also won’t require the paperwork that would normally come with it. For taxable uses of dyed diesel from October 1 through December 31, 2026, the IRS won’t enforce Form 720 filing, reporting, or recordkeeping that exists solely because of that use, and won’t assess penalties for skipping it. Nothing has to be filed or reconstructed after the relief ends, either.

Anyone who files Form 720 for other excise taxes still has to keep doing so for those. The IRS also says it knows red dye can linger in a tank after the relief period ends, and that it’s considering a grace period or other fix, with more guidance to come. Remember that Indiana’s matching state waiver is currently set to expire November 4.

A Treasury Inspector General for Tax Administration report released October 23 found 47 potential ghost preparers behind returns seeking more than $94 million in refunds for tax year 2023, and 65 more behind returns seeking over $85 million for 2024. Ghost preparers are paid preparers who don’t sign the returns they prepare or don’t use a valid preparer tax ID number. The flagged returns showed signs of an overstated-withholding scheme the IRS already lists as a scam.

TIGTA warned that these preparers often push clients toward credits they don’t qualify for, and sometimes steal the refunds outright. When the IRS catches it, the taxpayer is the one who owes the money back. The IRS agreed to finish a new data-driven strategy for policing preparers, and a bill to expand IRS oversight of paid preparers has passed the Senate and awaits a House vote.

In an October 22 reminder, the IRS urged taxpayers to get an Identity Protection PIN now. An IP PIN is a six-digit code, known only to you and the IRS, that blocks anyone else from filing a federal return with your Social Security number. Anyone who can verify their identity can get one, even if they aren’t required to file.

The timing matters. The online IP PIN tool shuts down for annual maintenance in mid-November and generally comes back in mid-January, so if you want one in place for an early 2027 filing, the next few weeks are the window. Share it only with a preparer you trust, and only when your return is ready. The IRS will never call, email, text, or message you on social media asking for it.

Trump accounts are a new type of IRA for children created by last year’s tax law. Kids born from 2025 through 2028 get a $1,000 federal seed contribution, and employers can add up to $2,500 a year, tax-free to the employee, to an account for a worker or a worker’s dependent. In a letter reported October 23, the AICPA told Treasury and the IRS that the proposed rules for those employer contributions are so complex that few companies can realistically launch a program this year.

The main concern is that employers would generally have to work with whatever trustee each family picks, which could mean coordinating with 50 or more firms. The AICPA asked Treasury to let 2026 employer contributions be made through 2027, add flexibility to nondiscrimination testing, and provide simpler compliance and correction procedures.