IRS Priority Guidance Plan: What It Is, How It Works, and Why It Matters

Table of Contents#

1. What Is the IRS Priority Guidance Plan?
2. How the PGP Works: Step-by-Step Creation Process
3. 2024 PGP: Key Priority Areas for Taxpayers
4. Who Does the PGP Impact?
5. How to Engage With the PGP Process
6. Common FAQs About the PGP
7. Final Takeaways
8. References

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What Is the IRS Priority Guidance Plan?#

The IRS Priority Guidance Plan is an annual, public 12-month roadmap of tax guidance projects the IRS and Treasury intend to complete in the coming year. First introduced in 1995 to increase transparency around IRS rulemaking, the plan covers all types of tax guidance, including:

• Final, temporary, and proposed regulations for new tax legislation
• Revenue rulings and revenue procedures clarifying ambiguous existing tax code
• Notices, announcements, and FAQ updates addressing common taxpayer confusion
• Guidance to close tax loopholes and reduce unintentional filing errors

The PGP is not a legally binding document: the IRS can adjust its priorities mid-year if Congress passes new tax laws, a natural disaster requires emergency tax relief, or an unforeseen high-priority tax issue arises. Quarterly progress updates are published to the IRS website to reflect these changes.

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How the PGP Works: Step-by-Step Creation Process#

The PGP is developed through a combination of public input and internal IRS analysis, following 5 core steps:

Step 1: Public Input Solicitation#

2 to 3 months before drafting the annual plan, the IRS publishes a request for comments in the Federal Register open to all stakeholders. Commenters are asked to specify which areas of the tax code need clearer guidance, how many people are affected by the lack of guidance, and what specific clarifications would reduce filing errors or improve access to tax benefits. The IRS specifically solicits input from underrepresented taxpayer groups, including low-income filer advocates and small business associations.

Step 2: Internal Priority Submission#

Each IRS division (Wage and Investment, Small Business/Self-Employed, Large Business and International, and Tax Exempt/Government Entities) submits a list of proposed guidance projects based on audit trends, common taxpayer support inquiries, recent court rulings, and mandatory implementation requirements for new tax laws.

Step 3: Project Ranking and Selection#

Proposed projects are ranked using 4 core criteria:

1. Urgency: How quickly the guidance is needed (e.g., guidance for tax provisions taking effect in the coming tax year is prioritized)
2. Impact: How many taxpayers will benefit from the guidance
3. Complexity: How much existing confusion exists around the rule
4. Compliance value: How much the guidance will reduce unintentional filing errors or close the tax gap

Step 4: Public Release#

The final PGP is published to the IRS website and Federal Register, usually between October and December for the upcoming calendar year.

Step 5: Implementation and Updates#

The IRS publishes quarterly progress updates for all projects on the PGP, marking them as "released," "in draft," "under review," or "removed/added" to reflect mid-year priority changes.

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2024 PGP: Key Priority Areas for Taxpayers#

The 2023-2024 PGP includes more than 200 guidance projects, with the following high-impact priorities relevant to most taxpayers:

1. Inflation Reduction Act (IRA) Implementation: Clarifications for clean energy tax credits, including residential solar credits, electric vehicle (EV) eligibility rules, Section 45Q carbon capture credits for businesses, the 15% corporate alternative minimum tax, and the 1% excise tax on corporate stock buybacks.
2. SECURE 2.0 Act Implementation: Guidance for retirement plan changes, including catch-up contribution rules for high earners, student loan payment matching for 401(k) plans, and updated required minimum distribution (RMD) rules for savers aged 73 and older.
3. Small Business Support: Clarifications for the Section 199A 20% pass-through deduction for small businesses, updated guidance to reduce fraudulent Employee Retention Credit (ERC) claims while supporting legitimate filers, and gig worker classification rules.
4. Low-Income Taxpayer Support: Updates to Earned Income Tax Credit (EITC) eligibility rules, Premium Tax Credit (PTC) clarifications for Affordable Care Act plan holders, and improvements to the Free File free tax preparation program.
5. International Tax Guidance: Clarifications for Global Intangible Low-Taxed Income (GILTI) rules, foreign tax credit updates, and implementation guidance for the OECD BEPS 2.0 global minimum tax framework for multinational corporations.

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Who Does the PGP Impact?#

The PGP provides value for every group of taxpayers, including:

Individual Taxpayers#

The PGP lets you plan major financial decisions (like purchasing an EV or installing solar panels) by letting you know when final guidance for related tax credits will be released, so you can confirm eligibility before making a purchase.

Small Business Owners#

Clear guidance on deductions, credits, and worker classification rules listed in the PGP helps you avoid costly filing errors, maximize eligible tax breaks, and plan annual business budgets.

Tax Professionals#

The PGP lets you plan client work ahead of time, provide accurate long-term financial advice, and stay updated on upcoming rule changes that will affect your client base.

Large and Multinational Corporations#

Guidance on corporate taxes, international tax rules, and clean energy incentives listed in the PGP helps businesses plan corporate finance strategies, comply with new rules, and avoid penalties.

Tax-Exempt and Nonprofit Organizations#

The PGP regularly includes guidance on unrelated business income tax (UBIT) rules, grant eligibility, and reporting requirements for nonprofits to help these groups stay compliant.

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How to Engage With the PGP Process#

You don’t have to be a tax professional to provide input on the PGP:

1. Submit Public Comments: Every summer, the IRS releases a request for comments for the next year’s PGP on the Federal Register. You can submit comments electronically via Regulations.gov, or by mail, with specific details about the guidance you need and how it will impact you or your community.
2. Attend Public Listening Sessions: The IRS hosts regular public listening sessions for high-priority issue areas (like IRA clean energy credits) where you can provide verbal feedback directly to IRS and Treasury officials.
3. Comment on Draft Guidance: When the IRS releases draft guidance for projects listed in the PGP, you can submit public comments to suggest changes before the guidance is finalized.
4. Track Progress: You can view the latest PGP and quarterly progress updates on the official IRS PGP webpage to see when guidance you care about will be released.

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Common FAQs About the PGP#

Q: Is the IRS required to complete all projects listed in the PGP?#

A: No, the PGP is a non-binding roadmap. The IRS may adjust priorities mid-year if new legislation passes, an emergency arises, or projects take longer than expected to complete.

Q: Can individual taxpayers submit comments for the PGP, or is it only for businesses and tax professionals?#

A: All taxpayers, including individual filers, are welcome to submit comments. The IRS specifically solicits input from low-income taxpayer advocates and underrepresented groups to ensure the plan addresses needs across all taxpayer populations.

Q: How often is the PGP updated?#

A: The full annual plan is released once per year, with quarterly progress updates published to the IRS website throughout the year.

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Final Takeaways#

The IRS Priority Guidance Plan is far more than an internal agency document: it’s a transparent, public tool that lets taxpayers of all types plan for upcoming tax changes, avoid filing errors, and have a direct say in what tax rules the IRS prioritizes. If you have questions about upcoming tax guidance, or want to provide input on future PGP versions, visit the IRS PGP webpage to view the latest plan and upcoming comment periods.

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References#

1. U.S. Internal Revenue Service. (n.d.). Priority Guidance Plan. Retrieved from https://www.irs.gov/government-entities/priority-guidance-plan
2. U.S. Department of the Treasury. (2023). 2023-2024 Priority Guidance Plan. Retrieved from https://home.treasury.gov/policy-issues/tax-policy/priority-guidance-plan
3. Federal Register. (2023). Request for Comments on the 2024-2025 Priority Guidance Plan. Retrieved from https://www.federalregister.gov/documents/2023/07/28/2023-16236/request-for-comments-on-the-2024-2025-priority-guidance-plan