Here is a look at recent tax-related happenings on the Hill, including new industry-specific tariffs coming.
Lately on the Hill
U.S. Begins Implementation of EU Trade Deal Framework
The International Trade Administration and Office of the U.S. Trade Representative have released a notice to begin implementation of the U.S. and European Union (EU) framework agreement on trade. The notice amends the Harmonized Tariff Schedule identified in Annex I and Annex II of the notice. The modifications are applicable retroactively to either August 1, 2025 or September 1, 2025, depending on the type of good.
Goods include those which the administration designated, in a recent executive order, as available for most-favored-nation (MFN) tariffs when a trade deal is struck. These goods include such items as aircraft and aircraft parts, certain generic pharmaceuticals and their ingredients, unavailable natural resources and closely related derivative products, and certain agricultural products.
The notice also removes tariffs on automobiles and automobile parts if the MFN is 15% or higher. If lower than 15%, then the tariff rate would be added to the MFN rate but capped at 15%.
New Industry-Specific Tariffs Coming
President Donald Trump identified goods subject to new tariffs as of October 1, 2025 on social media. A 25% tariff on heavy trucks, a 30% tariff on upholstered furniture, and a 50% tariff on kitchen cabinets and bathroom vanities are set to take effect this week and would stack upon existing tariffs unless a non-stacking agreement with the U.S. has been made.1
Also slated to begin October 1, 2025 is a 100% tariff on pharmaceuticals unless a drug company has started construction on a manufacturing plant in the U.S., according to Trump.2
These new tariffs are to be implemented under Section 232 of the Trade Expansion Act rather than under the International Emergency Economic Powers Act (IEEPA), a move that could make them less likely to be subject to challenge. Tariffs imposed under IEEPA are currently under consideration by the U.S. Supreme Court; §232 tariffs are not included in the court case.
The U.S. Department of Commerce earlier this month began investigating the impact of imports of robotics, industrial machinery, and medical devices. As these items are deemed critical to national security, the department will deliver policy recommendations to the president in the coming months, which may prompt new tariffs on the sectors.3
Hearing Set on Digital Asset Taxation
Members of the Senate Finance Committee will participate in a hearing on the taxation of digital assets on October 1, 2025. Invited witnesses include Jason Somensatto, director of policy for Coin Center; Andrea S. Kramer, founding member of ASKramer Law, LLC; Lawrence Zlatkin, vice president of tax at Coinbase Global, Inc.; and Annette Nellen, chair of the Digital Assets Tax Task Force for the American Institute of CPAs.
From the Courts
Date Set for Arguments in Tax-Exempt Free Speech Case. National Religious Broadcasters v. Bessent, No. 6:24-cv-0031, U.S. District Court Eastern District of Texas.
Oral arguments have been scheduled for November 7, 2025 regarding political campaign activity by tax-exempt organizations. The U.S. District Court of the Eastern District of Texas will hear arguments on a joint motion filed by the IRS and the plaintiffs enjoining the IRS from enforcing the political campaign activity ban under §501(c)(3) as it relates to political speeches made during religious services.
Otherwise known as the Johnson Amendment, the law prohibits tax-exempt entities from participating in political campaigns to maintain their tax-advantaged status. The plaintiffs argue that a carveout should be made for speeches during religious services to maintain their First Amendment rights to free speech and free exercise of religion.
The court will also hear arguments from Americans United for Separation of Church and State, which opposes the motion as a violation of the establishment clause and sidestepping Congress.4
From Treasury & the IRS
OB3 International Tax Guidance Anticipated by Year-End
By the end of the year, the U.S. Department of the Treasury and the IRS anticipate issuing notices on international provisions of the One Big Beautiful Bill Act (OB3), according to Deputy Assistant Secretary for Tax Policy Kevin Salinger. Proposed regulations would then be released in the first half of 2026. The guidance will address provisions including the elimination of the one-month deferral election under §898(c), the definition of deduction-eligible income under foreign-derived deduction-eligible income, the revised foreign tax credit, and Subpart F pro rata share rules.5
Trump Orders Treasury & the IRS to Monitor Tax-Exempt Orgs for Domestic Terrorism
In light of “heinous assassinations and other acts of political violence,” the Treasury secretary and the IRS commissioner have been instructed in a presidential memoranda to “identify and disrupt financial networks that fund domestic terrorism and political violence” through investigation and examination of illicit financial activities. Furthermore, the IRS is to refer tax-exempt organizations, their employees, and officers, to the U.S. Department of Justice when found “directly or indirectly financing political violence or domestic terrorism.”
FinCEN Proposes Two-Year Delay in Anti-Money Laundering Rules for Investment Advisers
Treasury and the Financial Crimes Enforcement Network (FinCEN) have proposed delaying rules on anti-money-laundering laws applicable to certain investment advisers until January 1, 2028. Currently, the effective date is January 1, 2026. The rules seek to curb the misuse of investment advisers by money launderers, terrorist financers, and other bad actors.6
Released Guidance
The IRS has withdrawn two proposed regulations (REG-112261-24) and (REG-116085-23) issued in January. The proposals contained guidance for taxpayers engaged in corporate separations and related transactions under §355.
Final regulations (T.D. 10036) provide low-income housing credit record-keeping and reporting requirements for the average income test.
IR-2025-94 announces that individual taxpayers will no longer be able to receive paper tax refund checks beginning on September 30, 2025. The change is in accordance with a White House executive order issued on March 25, 2025. Limited exceptions are available to those without bank accounts. Taxpayers may continue to make payments using existing options, including by paper check, until further notice.
Notice 2025-52 provides guidance concerning an extension of the replacement period for livestock sold due to drought under §1033(e). This section provides for nonrecognition of gain when an involuntary conversion of livestock occurs on account of weather-related conditions. The notice lists specified counties throughout the U.S. qualifying for the extension. The extension continues until the end of the taxpayer’s first taxable year ending after a drought-free year for the applicable region.
Notice 2025-54 provides the 2025-2026 per diem rates to substantiate ordinary and necessary business expenses incurred while traveling away from home. The notice specifies the special transportation industry meal and incidental expenses rate, the incidental expenses only deduction rate, and the rates and list of high-cost localities for purposes of the high-low substantiation method.
FS-2025-06 reminds tax professionals that taxpayers will receive new Form 1099-DA to report 2025 proceeds from certain digital asset transactions by February 17, 2026. The form does not require the assets’ basis to be reported and, therefore, must be calculated by the taxpayer to correctly report gains or losses on their 2025 tax returns.
Interim final regulations (T.D. 10035) adjust the user fee for a preparer tax identification number (PTIN) from $11 to $10 and maintain the $8.75 third-party contractor fee.
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“US to Impose Tariffs on Heavy Trucks, Kitchen Cabinets,” bloomberglaw.com, September 25, 2025.
- 2“Trump Plans New Tariff Push With 100% Rate on Patented Drugs,” bloomberglaw.com, September 26, 2025.
- 3“US Sets Stage for Tariffs on Robotics, Medical Devices,” bloomberglaw.com, September 24, 2025.
- 4“Oral Arguments Scheduled in Johnson Amendment Case,” taxnotes.com, September 23, 2025.
- 5“International Guidance Coming by Year-End, Treasury Official Says,” taxnotes.com, September 23, 2025.
- 6“Treasury Seeks Delay in Investment Adviser Money-Laundering Rule,” bloomberglaw.com, September 19, 2025.