IRS Proposes Ending Form 1041-A Filing for Some Trusts, Comments Due October 16, 2026

The IRS and the Treasury Department have proposed regulations that would remove the Form 1041-A filing requirement for certain trusts. The relief covers trusts whose only charitable deduction comes from contributions made by a partnership or S corporation in which the trust holds an interest. The proposal also clarifies that split interest trusts meet their filing duty with Form 5227 instead of Form 1041-A. Comments and hearing requests are due October 16, 2026, and affected trusts may rely on the proposal now.

Who Is Affected

The proposal would affect trusts that claim a charitable deduction under section 642(c) of the Internal Revenue Code and today must file Form 1041-A, U.S. Information Return Trust Accumulation of Charitable Amounts. Trustees of trusts that own interests in passthrough entities, and trustees of split interest trusts described in section 4947(a)(2), should pay the closest attention. If you set up a trust as part of your wills and trusts planning, your trustee may want to check whether it applies.

Key Changes

The proposed amendments to 26 CFR 1.6034-1 (REG-109082-25, 91 FR 53217, August 17, 2026) would:

• Excuse a trust from filing Form 1041-A if its only section 642(c) deductions come from contributions taken into account under section 702(a)(4) (partnerships), section 1366(a)(1) (S corporations), or both (proposed 1.6034-1(b)(3))

• State that trusts described in section 4947(a)(2), including section 664 trusts, file Form 5227 (proposed 1.6034-1(a))

• Keep the due date at the 15th day of the 4th month after the close of the trust's taxable year (proposed 1.6034-1(c))

• Apply to taxable years ending on or after the date final regulations are published (proposed 1.6034-1(e))

The preamble states that a trust described in proposed 1.6034-1(b)(3) or section 4947(a)(2) "may rely on the proposed regulations for taxable years ending before that date."

Practical Implications

Trustees should look at where the trust's charitable deductions come from. If every dollar flows through a partnership or S corporation interest, the trust may be able to rely on the proposal and skip Form 1041-A for earlier years as well. Split interest trusts, such as charitable remainder trusts under section 664, should keep filing Form 5227.

Anyone who wants to weigh in has until October 16, 2026. The IRS asks that comments go through the Federal eRulemaking Portal and reference REG-109082-25. Because this is a proposal, the final version could change.