TaxFax Articles

The Spring 2026 TaxFax contains the following high interest articles.  Here is a brief summary of them.  For the whole article, please visit The Cooperative Accountant Spring 2026 in Connect

The IRS begins to issue guidance with respect to new Sections 1062 and 139L

The Winter 2025 edition of the TAXFAX Column described two new sections added to the Code by the One Big Beautiful Bill Act (“OBBBA”) – Section 1062 (Gain from the Sale or Exchange of Qualified Farmland Property to Qualified Farmers) and Section 139L (Interest on Loans Secured by Rural or Agricultural Real Property).

Since then, the Internal Revenue Service (“IRS”) has issued preliminary guidance for both

new sections.

Section 1062

Section 1062 allows owners of farmland who sell that land to farmers to elect to pay resulting federal income tax over four years.  It is effective for tax years beginning after July 4, 2025. 

Final Regulations Under Section 4501 – Changes of Potential Interest to Cooperatives

Congress added Section 4501 to the Code as part of the Inflation Reduction Act of 2022, P.L. 117-58 (August 16, 2022).  This section imposes a 1% excise tax on certain repurchases of corporate stock.

Section 4501(b) limits applicability to corporations which are “covered corporations,” defined as “any domestic corporation the stock of which is traded on an established securities market (within the meaning of section 7704(b)(1).”  Most Subchapter T cooperatives do not have stock that is traded.  As a result, this tax should not apply to most Subchapter T cooperatives. 

However, a few Subchapter T cooperatives have preferred stock that clearly is publicly traded.  A few others have interests that are traded in a manner that might be considered as “traded on an established securities market (within the meaning of section 7704(b)(1).”     

The U.S. Postal Service issues final rules clarifying the significance of postmarks

The U.S. Postal Service recently added new rules to the Domestic Mail Manual “to improve public understanding of postmarks and their relationship to the date of mailing.”

The new rules clarify that a postmark confirms the date that the Postal Service “accepted custody” of a mailing. That date may be later than the date on which the Postal Service “first accepted possession” of the mailing. See, 39 CFR 111, Rule 608.11.3.

The explanation accompanying the final rule acknowledges awareness that the postmark date has historically been relied upon for many purposes, not the least of which is for determining whether a taxpayer has complied with federal or state tax deadlines.1 This rule is not intended to change anything, but it has engendered quite a bit of interest – 130 comments (though 80 followed of one of three form letters).

The New Pillar Two Side-by-Side Safe Harbor Should Benefit U.S. Cooperatives

Large cooperatives[1] with an international presence[2] have, like other U.S. multinational corporations, been monitoring developments in the Organization for Economic Co-operation and Development’s (“OECD’s”) new international minimum tax regime (“Pillar Two”).

While the U.S. initially backed the OECD’s efforts, Pillar Two never garnered support in Congress, particularly among Republicans who viewed the emerging system as penalizing U.S. companies and impinging upon U.S. sovereignty. The Trump administration voiced its opposition to Pillar Two in a first-day order and later proposed an approach (referred to as the “side-by-side” or “SbS” approach) which would permit the OECD Pillar Two and the U.S. tax system to coexist.

In the Fall, 2025 TAXFAX column, we reported on an agreement among the G7 nations to support the SbS approach.  The column noted that a lot of work remained to make the proposal a reality.  That work progresses.

On January 5, 2026, the OECD released an 88-page document entitled “Tax Challenges Arising from the Digitalisation [sic] of the Economy – Global Anti-Base Erosion Model Rules (Pillar Two), Side-by-Side Package” (the “OECD release”).[3]  Among other things, the OECD release adopts a new Side-by-Side Safe Harbor which should shelter U.S.-parented multinational groups from what the U.S. considered the most objectionable features of Pillar Two (namely, the Income Inclusion Rule (“IIR”) and the Undertaxed Profits Rule (“UTPR”)).

[1] Cooperatives and their subsidiaries with annual revenue of €750 million (currently roughly $900 million) or more in at least of the prior four years are potentially covered if they have an international presence.

[2] Simply making sales is not presence for this purpose.  Presence requires having a subsidiary or permanent establishment outside the U.S.

[3] https://www.oecd.org/content/dam/oecd/en/topics/policy-sub-issues/global-minimum-tax/side-by-side-package.pdf