Here’s a look at recent tax-related happenings on the Hill, including a House Budget Committee budget resolution allowing for the extension of certain provisions of the Tax Cuts and Jobs Act of 2017 (TCJA).
Lately on the Hill
On February 13, the House Budget Committee passed a budget resolution along party lines, authorizing $4.5 trillion in spending over the 10-year period from 2025 to 2034 and allowing for the extension of certain TCJA provisions. The House Ways and Means Committee anticipates the bill will come to a floor vote the week of February 24. The bill requires a minimum offset of $1.5 trillion over the 2025–2034 fiscal years, with an aim to reduce mandatory spending by $2 trillion over the same window.
This resolution leverages the special budget reconciliation procedures, enabling tax legislation to be passed with a simple majority vote in the Senate, thereby bypassing the potential impediment of a filibuster. Typically, the budget reconciliation process is utilized when a single party holds control of both the White House and Congress.
Concurrently, the Senate passed its budget resolution on February 12. The Senate’s budget resolution is smaller than the resolution passed by the House Budget Committee, focusing on border security, defense, and energy production, with tax provisions expected to be addressed in a subsequent bill. For the budget reconciliation process to proceed, an identical budget resolution must be passed by both chambers of the legislative branch.
On February 13, Republican senators on the Senate Finance Committee, including Majority Leader John Thune (R-SD), sent a letter to President Donald Trump. In the letter, they affirmed their support for a tax package that makes certain tax provisions of the TCJA benefiting small businesses and families permanent by expressly stating they would oppose any tax package that provided only temporary provisions.
House Ways & Means Committee Passes Various Bills
The Protect Small Businesses from Excessive Paperwork Act of 2025: This act would delay enforcement of the Corporate Transparency Act (CTA) until January 1, 2026 for small businesses in existence prior to January 1, 2024. The CTA requires the reporting of certain information identifying individuals who directly own or otherwise control certain entities to the Financial Crimes Enforcement Network (FinCEN). The database is intended to assist FinCEN and other permitted agencies to protect U.S. financial interests from illicit activity hidden behind shell companies or other complex ownership structures. FinCEN currently permits voluntary filings of Beneficial Ownership Information (BOI) reports with a nationwide injunction issued in Smith, et al. v. U.S. Department of the Treasury still in place.
The National Taxpayer Advocate Enhancement Act of 2025: This act empowers the National Taxpayer Advocate (NTA) to appoint counsel within the Office of the Taxpayer Advocate. The appointed counsel will report directly to the NTA with the goal of enhancing the office’s ability to address taxpayer issues effectively.
The Internal Revenue Service Math and Taxpayer Help Act: This legislation mandates the IRS to provide comprehensive and plain language explanations to taxpayers for deficiencies resulting from mathematical or clerical errors. The explanations must include:
- The type and description of the error
- The specific line of the return on which the error occurred
- An itemized computation of any direct or incidental adjustments required as a result of the error correction
The Electronic Filing and Payment Fairness Act: Under this act, tax returns and payments filed electronically will be treated the same as those sent through the mail.
The Recovery of Stolen Checks Act: This act requires the U.S. Department of the Treasury to establish procedures that allow taxpayers eligible for a replacement refund check to receive the refund via direct deposit.
From the White House
On February 13, the Trump administration introduced “Fact Sheet: President Donald J. Trump Announces ‘Fair and Reciprocal Plan’ on Trade,” instructing his advisors to evaluate the costs of doing business with other countries and recommend appropriate tariffs to balance trade deficits. The order calls for an examination of tariffs imposed on U.S. products, discriminatory taxes imposed by U.S. trading partners (including value-added taxes or VAT), regulatory requirements on U.S. businesses operating in other countries, and other practices that impose unfair limitations on U.S. businesses.
In addition, Trump issued an executive order titled “Implementing the President’s ‘Department of Government Efficiency’ Workforce Optimization Initiative,” reinforcing the standing hiring freeze on the IRS. Pursuant to a previous executive order, the freeze will remain in effect until the secretary of the Treasury, the director of the Office of Management and Budget, and the administrator of the United States DOGE Service determine it is in the national interest to lift it.
Judicial Report
In FedEx Corp v. United States, a U.S. District Court granted FedEx’s motion for partial summary judgment regarding whether FedEx was eligible to receive foreign tax credits for foreign taxes paid on the “Offset Earnings” of its foreign subsidiaries.1 Offset earnings refer to the remaining profits after netting losses from unprofitable foreign subsidiaries against those of profitable ones. The court ruled that the Regulatory Haircut Rule’s application to offset earnings was invalid because it conflicted with the plain reading of the statutory language of Section 965(g)(1), noting contradictory language in the corresponding regulations. In 2023, the court determined that FedEx had been unjustly denied foreign tax credits on offset earnings amounting to more than $89 million and granted partial summary judgment in favor of the company.
From the Treasury & IRS
In Revenue Procedure (Rev. Proc.) 2025-14, Treasury released an annual table to provide greenhouse gas emission rates for certain facilities eligible for the Clean Energy Production and Investment Tax Credits under §45Y and §48E. For all types and categories of energy property, the greenhouse gas emissions rate must not exceed zero.
The IRS released Rev. Proc. 2025-15 to provide discount factors for the 2024 accident year for use by insurance companies in computing discounted unpaid losses under §846 and discounted estimated salvage recoverable under §832. In addition, the Revenue Procedure offers discount factors for losses incurred in the 2023 accident year and earlier accident years for use in taxable years beginning in 2024.
The IRS issued Rev. Proc. 2025-16 to establish limitations on depreciation deductions for owners of passenger automobiles (including trucks and vans) placed in service during 2025, as well as the dollar amounts to be used to determine income inclusions by lessees of passenger automobiles with a lease term beginning in 2025.
This newsletter features developing content that is subject to change at any time. It does not constitute legal or tax advice. Consult your professional advisors prior to acting on the information set forth herein.
- 1 “FedEx Gets Partial Summary Judgment in Foreign Tax Credit Dispute,” budget resolution taxnotes.com, February 13, 2025.