Hello from Park City, Utah! It’s a brisk 40 degrees as I write this week’s newsletter. I’m here on business, and while I’ve had a lovely time (the Salt Lake City Estate Planning Council was a wonderful host), I am anxious to get back east. Let’s hope that happens. What could slow me down? The Federal Aviation Administration (FAA) is advising airlines to cut flights back due to a shortage of air traffic controllers during the shutdown. The list of affected airports is extensive, including my home airport, Philadelphia. As a result, tax professionals on social media have already suggested they may have to curtail attendance and speaking engagements at tax conferences that require air travel in favor of those accessible by train and car. You can find a list of upcoming conferences near the bottom of the newsletter—I suggest checking with each conference directly if you have questions.

An area where taxpayers may also feel the impact of the shutdown is the closing of the IRS Taxpayer Assistance Centers (TACs). TACs are offices where taxpayers can get help on their taxes. Services offered range from assisting with IRS notices or letters to resolving account issues, making payments to the taxing authority, and answering tax law questions. And it doesn’t just benefit individual taxpayers—recent research suggests that these centers offer significant benefits to businesses, especially entrepreneurs, by lowering taxpayer compliance costs. As the shutdown continues, an unintended consequence might be a decline in these entrepreneurial efforts.

(You can find a summary of what’s open—and what’s not—at the IRS during the shutdown here.)

Despite the shutdown, the IRS continues to roll out guidance related to the One Big Beautiful Bill Act (OBBBA). This week, the IRS released new guidance to help employers and other payers navigate reporting requirements for cash tips and qualified overtime compensation under OBBBA. The guidance provides penalty relief from the new information reporting requirements related to the new deduction—specifically, employers and other payers will not be penalized for failing to file correct information returns or providing correct payee statements to employees and other payees in 2025 for purposes of the deductions. The IRS says that guidance for taxpayers will follow.

That guidance will prove useful as the 2026 tax filing season approaches — it’s already beginning to look different. For one, while we knew it was coming, now we are sure: Direct File, the free tax e-filing option provided by the IRS, has been axed. This week, reports surfaced that the IRS had emailed states to say Direct File would not be available for the next filing season. Some participating states have since confirmed receipt of the email to Forbes. The IRS did not respond to a request for comment and hasn't officially notified taxpayers, but if you click over to the IRS website that used to be the home of Direct File, a message simply states, “Direct File is closed. More information will be available at a later date.” Information on the site says anyone who needs a transcript should instead log into their IRS online accounts. The IRS also advises, “If you used Direct File to submit your return, you can retrieve a copy by submitting Form 4506, Request for Copy of Tax Return…If you used a different tool to submit your tax return, find out how to access your tax records.” It’s worth noting that the method you used to file your tax return (e-file or paper) and whether you had a balance due affects your current year transcript availability–that’s especially true during the shutdown.

There’s one more story this week related to the shutdown—but this one is a little different. I had the chance to talk to Isaac Stein, an attorney at the IRS Chief Counsel’s Office. Dressed in a suit and tie, his usual work outfit at the office, he now mans a cart, dishing out hot dogs and advice under the shade of an umbrella. It’s been his daily routine ever since the federal government shut down in October, and Stein found himself out of a job—at least temporarily. But far from being a sob story, this is the story of how he fulfilled his childhood dream. Give it a read—it’s sure to make you smile.

I’m considering buying an apartment in Paris to use as a second home. I might also rent it out through something like Airbnb when I’m not staying there. Can I deduct French property taxes on my U.S. tax return?

Property taxes are generally deductible on Schedule A. However, while you can deduct state and local taxes, you generally cannot deduct foreign real estate taxes on Schedule A.

Under the Tax Cuts and Jobs Act of 2017 (TCJA), the itemized deduction for state and local taxes (SALT) was limited to U.S. state and local income, sales, and property taxes — foreign property (real estate) taxes were specifically excluded. Foreign real estate taxes remain nondeductible under section 164(b)(6)(A) of the tax code—the One Big Beautiful Bill Act (OBBBA) didn’t change that rule.

But if you do opt to rent out the place? Foreign real estate taxes might be deductible as part of rental property expenses on Schedule E, if the property produces income.