WASHINGTON, D.C. — Taxpayers now have a centralized online tool to confidentially report suspected tax fraud, and the Treasury Department and Internal Revenue Service have issued updated guidance explaining how a refundable adoption tax credit and tribal “special needs” determinations apply for tax years beginning after 2024.
What This Means for You
- You can confidentially report suspected tax fraud at IRS.gov/SubmitATip.
- For tax years beginning after 2024, up to $5,000 of the adoption tax credit is refundable, with the remainder potentially available as a nonrefundable credit.
- For tax years beginning after 2024, Indian tribal government “special needs” determinations are recognized for adoption credit purposes.
The IRS announced Thursday that it has launched a new web page consolidating multiple fraud-reporting options into a single location on IRS.gov. A day later, Treasury and the IRS released a set of frequently asked questions on FS-2026-03 addressing general refundability and the recognition of Indian tribal governments for special needs determinations tied to the adoption tax credit.
New Fraud Reporting Portal
The new “Report Fraud” page, accessible through a button on the IRS.gov homepage or directly at IRS.gov/SubmitATip, allows taxpayers to confidentially report suspected tax fraud, evasion, scams, or other illegal tax-related activity.
“Improvements to the IRS fraud reporting system make reporting suspected wrongdoing easier and simpler and will address historic challenges that had prevented the IRS from making maximum use of the referrals it receives,” IRS Chief Executive Officer Frank J. Bisignano said. “By reporting suspected tax fraud or scams, taxpayers play an important role in uncovering fraud and supporting the integrity of the nation’s tax system.”
The IRS said the new page is the first step in a broader effort to streamline fraud reporting by reducing forms, automating processes, and using modern case management software. The agency said it expects fewer work streams and more efficient processing to improve how referrals are used to stop illegal activity.
Adoption Tax Credit Now Partially Refundable
Treasury and the IRS said the One, Big, Beautiful Bill changed the adoption tax credit in two main ways that apply to tax years beginning after 2024.
First, the adoption tax credit is refundable up to $5,000, indexed for inflation. The remaining portion is nonrefundable and can be carried forward for up to five years, but it cannot generate a refund. Any nonrefundable amount not used after five years is forfeited.
In the FAQ, the IRS said taxpayers who have unused credit amounts from qualified adoption expenses may carry them over for up to five future years to calculate only the nonrefundable portion of the credit in those years.
The IRS also said families may claim the adoption tax credit for multiple adoptions, subject to the per-child limit. The guidance lists the per-child limit as $17,280 for 2025, with up to $5,000 of that amount refundable per child if all other requirements are met.
The IRS said taxpayers may be eligible to claim the refundable portion of the adoption tax credit each year they have qualified adoption expenses, up to $5,000, as long as the total does not exceed the per-child limit. If a taxpayer’s only qualified expenses are carried over from a prior year, the carryover can be applied only to the nonrefundable portion.
Tribal Special Needs Determinations Recognized
Second, the law provides parity for Indian tribal governments by recognizing their special needs determinations on the same basis as state determinations for the adoption tax credit for tax years beginning after 2024.
Under the FAQ, a child may be treated as having special needs for this credit if a state or Indian tribal government determines the child cannot or should not be returned to their parents, identifies a specific factor or condition — such as age, ethnic background, membership in a minority or sibling group, or medical or emotional conditions — that makes placement without adoption assistance unlikely, and confirms the child is a U.S. citizen or resident.
The IRS said children subject to the Indian Child Welfare Act may qualify under the definition if an Indian tribal government makes the required determination.
The IRS also said that as of January 1, 2025, Indian tribal government determinations are recognized for purposes of the credit, including adoptions finalized earlier in 2025 before the law was enacted on July 4, 2025, if the other requirements are met.
The guidance states that acceptable documentation of a special needs determination may include an adoption assistance or subsidy agreement, certification from a state, county, or tribal welfare agency, or an official letter on government letterhead.
The IRS also said adoptive parents may qualify for the credit even if they did not pay out-of-pocket adoption expenses, if the adoption was finalized and involved a child determined to have special needs.
Taxpayers seeking more information can find additional guidance under “Adoption Expenses” on IRS.gov.
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