The IRS is accepting applications for its 2027 Low Income Taxpayer Clinic (LITC) matching grant program. Eligible organizations can apply between May 6 and July 6, 2026, for funding to help low-income taxpayers and individuals with limited English proficiency resolve tax issues and understand their rights. The grant period runs from January 1 through December 31, 2027.

What Qualifies Low Income Taxpayer Clinics?

Administered by the Taxpayer Advocate Service (TAS), LITCs operate independently from the IRS and provide:

• Free or low-cost representation in tax disputes with the IRS
• Tax education for taxpayers whose first language is not English
• Advocacy on issues affecting low-income and ESL taxpayers

According to National Taxpayer Advocate Erin M. Collins, the clinics are a “lifeline” for taxpayers who need help accessing a fair and just tax system.

Funding Details

Organizations may request up to $200,000 for the 2027 grant year. The grants require a dollar-for-dollar match, meaning recipients must contribute an amount equal to the IRS award.

Applications must be submitted electronically by 11:59 p.m. ET on July 6, 2026.

Focus on Underserved Areas

The IRS will give special consideration to applications serving underserved communities, particularly in:

• Hawaii
• Kansas
• Montana
• West Virginia
• Wisconsin

Additional priority will be given to organizations proposing services in counties across Florida, Nevada, and South Dakota where taxpayer clinic coverage is limited or unavailable. The agency is also especially interested in proposals that expand access through community partnerships, referral networks, and ESL outreach programs.

Key Deadline

Organizations interested in applying must submit their applications by July 6, 2026. The funding opportunity number is TREAS-GRANTS-042027-001.

The program aims to expand access to tax assistance and ensure more taxpayers receive the representation, education, and support they need to navigate the tax system successfully.

The Department of the Treasury and the Internal Revenue Service (IRS) have issued final regulations implementing the “No Tax on Tips” provision under the One, Big, Beautiful Bill. These rules clarify which workers qualify and what constitutes “qualified tips” eligible for a tax deduction.

Overview of the Final Regulations

After receiving over 300 public comments and holding a hearing in October 2025, the IRS finalized guidance to ensure consistent application of this tax benefit. The regulations are designed to support a wide range of tipped workers and provide clearer rules for compliance.

Occupations Eligible for Tip Deduction

The final regulations identify more than 70 tipped occupations using the Treasury Tipped Occupation Code system. These roles are grouped into eight categories:

• 100s – Beverage and Food Service
• 200s – Entertainment and Events
• 300s – Hospitality and Guest Services
• 400s – Home Services
• 500s – Personal Services
• 600s – Personal Appearance and Wellness
• 700s – Recreation and Instruction
• 800s – Transportation and Delivery

Notably, the final rules expand eligibility to include visual artists and floral designers (personal services) and gas pump attendants (transportation and delivery).

What Counts as “Qualified Tips”?

To claim the deduction, tips must meet specific criteria:

• Form of Payment: Must be cash or cash equivalents (e.g., credit/debit card, checks, gift cards, or mobile payments)
• Source: Must come directly from customers or through tip-sharing arrangements (e.g., tip pools)
• Voluntary Nature: Must be freely given by the customer

Importantly, mandatory service charges do not qualify unless customers have the option to modify or decline them.

Reporting Requirements

Only tips that are properly reported are eligible for the deduction. This includes tips recorded on:

• Form W-2
• Form 1099-NEC
• Form 1099-MISC
• Form 1099-K
• Form 4137 (for unreported tips)

Both employees and self-employed individuals, including gig workers, may qualify if they meet all requirements.

Special Consideration for Self-Employed Individuals

For self-employed taxpayers, the deduction is limited to their net income, preventing the deduction from exceeding business earnings.

Key Takeaway

The final “No Tax on Tips” regulations provide expanded opportunities for workers across multiple industries while setting clear standards for what qualifies. Proper classification, documentation, and reporting are essential to fully benefit from this provision.

For guidance on eligibility or claiming this deduction, consulting a tax professional can help ensure compliance and maximize available benefits.

As the April 15 deadline approaches, taxpayers who need more time to complete their federal returns can request an extension to file until October 15, 2026. However, the extension request must be submitted by April 15, 2026 to avoid penalties.

Extension to File vs. Time to Pay

An extension provides additional time to file, not to pay.

To avoid penalties and interest:

• Estimate your total tax liability
• Subtract payments already made (withholding or estimated payments)
• Pay any remaining balance by April 15

How to Request an Extension

The IRS offers several simple options:

• IRS Free File: Submit an extension electronically at no cost
• Free File Fillable Forms: Complete and e-file Form 4868
• Pay Online: Use IRS Direct Pay, Online Account, or EFTPS and select “extension”
• Mail Form 4868: Submit a paper form if preferred

Paying online and selecting “extension” automatically grants the extension—no additional form required. Be sure to keep your confirmation.

Automatic Extensions for Certain Taxpayers

Some individuals receive extra time automatically:

• Military stationed abroad: File by June 15 (payment still due April 15)
• Combat zone service members: At least 180 days after service ends
• Taxpayers living abroad: Automatic extension to June 15 (interest applies after April 15)
• Disaster-affected taxpayers: Additional time granted automatically in qualifying areas

Payment Options

Available IRS payment methods include:

• IRS Online Account
• Direct Pay
• Electronic Federal Tax Payment System (EFTPS)
• Credit/debit card or digital wallet

Key Takeaway

Filing an extension can help you submit a more accurate return, but it does not delay your payment obligation. Ensuring you pay what you owe by April 15 is essential to minimizing penalties and interest.

If you need help estimating your tax liability or filing an extension, consult a qualified tax professional to stay compliant and avoid surprises.

IRS Staffing Cuts Are Slowing Refunds—Here’s What Taxpayers Need to Know

If you’re waiting on a tax refund—especially from an amended return—you may be in for a longer wait.

A recent government watchdog report shows that staffing shortages at the IRS have led to a backlog of nearly 590,000 amended tax returns, raising concerns about delayed refunds for hundreds of thousands of Americans.

What’s causing the backlog?

The IRS workforce has been reduced by about 27 percent, according to the latest figures. These cuts followed layoffs carried out by the Department of Government Efficiency (DOGE), which was overseen by Elon Musk during the early days of the Trump administration.

With fewer employees available to process returns and answer questions, the agency is struggling to keep up with the volume of work—especially paper filings and amended returns, which require manual review.

Who is most affected?

Taxpayers who file amended tax returns face the biggest risk of delays. Amended returns are typically filed when someone needs to correct mistakes related to income, deductions, dependents, tax credits, or refund amounts.

According to an analysis of the Treasury report, these returns are piling up faster than the IRS can process them.

To put the problem in perspective:

• The current backlog is about 20,000 higher than last year
• It’s roughly four times larger than it was in 2019, before the pandemic

Customer service is also taking a hit

The IRS is also answering fewer phone calls. The watchdog report found that the agency lowered its customer service goal from 85 percent of calls answered to just 70 percent—meaning roughly 3 out of every 10 calls may go unanswered.

For taxpayers trying to check on a delayed refund, that can add another layer of frustration.

Delays are costing the IRS billions

Ironically, slower processing doesn’t just hurt taxpayers—it also costs the government money.

By law, the IRS must pay interest on refunds issued more than 45 days after the filing deadline. In 2025 alone, those interest payments totaled more than $2.6 billion, according to the Treasury report.

The interest rate the IRS pays on late refunds is 7 percent for the first three months of 2026, meaning longer delays could drive that cost even higher.

The bottom line

With fewer workers and growing backlogs, the IRS is under pressure—and taxpayers may feel the effects through delayed refunds and reduced customer service.

If you’re filing an amended return this year, experts suggest:

• Filing as early as possible
• Keeping copies of all documents
• Using online IRS tools to track your return when available

While staffing challenges continue, patience may be required—but the financial and service impacts are already adding up for both taxpayers and the government.