Here is a look at recent tax-related happenings on the Hill, including a delayed report showing a decline in the trade deficit in August.
Lately on the Hill
Three Legislative Weeks Remain
Congress is currently in the middle of its Thanksgiving recess, returning next week. Only three legislative weeks remain before Congress breaks again, ending the first session of the 119th Congress.
Likely to dominate the agenda are year-end expiring health insurance tax credits. “If it doesn’t come together before the end of the year, I doubt that it will come together,” said Sen. Thom Tillis (R-SC).1
Republicans are contemplating other options such as federally funded flexible spending accounts or health savings accounts. Democrats say there is no time for that, insisting on extension of the credits as the only option. “There is not a way for Congress to put together a proposal in the next couple of weeks that is going to help people in January,” said Sen. Ron Wyden (D-OR). “It just can’t be done.”2
In addition to holding a vote on the expiring tax credits, Senate Majority Leader John Thune (R-SD) is planning on getting the defense authorization bill completed. The House is planning a vote on it in early December.3
The clock is ticking on federal funding as nine appropriations bills still need to be passed before January 30, 2026. Without enactment of such bills, Congress faces another continuing resolution or potential shutdown.
Trade Deficit Tightened in August
A delayed report—due to the government shutdown—from the U.S. Census Bureau and the U.S. Bureau of Economic Analysis was released showing a decline in the trade deficit from $78.2 billion in July to $59.6 billion in August. July saw an expected spike in imports as postponed reciprocal tariffs took effect in August.
The year-over-year deficit has also decreased $9 billion since August 2024, consisting of a $8.6 billion increase in exports and a $0.4 billion decrease in imports.
Agriculture Products Removed From Brazil Tariffs
Effective November 13, 2025, the additional 40% tariffs imposed on Brazil will not apply to certain agricultural products. Products include items such as beef, coffee, cocoa, and fruit as identified in Annex I of the executive order.
From Treasury & the IRS
IRS to Issue Stack of Guidance on OB3
Assistant Treasury Secretary for Tax Policy Ken Kies has promised a slew of guidance in the coming months, prioritizing OB3 provisions. Guidance topics will include tax breaks on overtime and tips, Trump savings accounts, bonus depreciation, clean energy tax credit, and international items such as the foreign tax credit.4
Digital Asset Reporting Regulations Under Administrative Review
According to the Office of Information and Regulatory Affairs (OIRA), it has received for review proposed regulations related to the implementation of the Organisation for Economic Co-operation and Development (OECD) digital asset reporting framework. The OECD’s Crypto-Asset Reporting Framework (CARF) has been agreed to by the U.S. and other countries to share crypto transaction information.5
Automatic Penalty Abatement Intended for Next Tax Season
According to National Taxpayer Advocate Erin Collins, the IRS will provide automatic penalty waivers for certain taxpayers next tax filing season. In general, taxpayers may request penalty abatement for failing to pay, file, or deposit, which the IRS typically grants once every three-year period. Many qualifying taxpayers never receive the abatement because they do not request it. The automatic waivers are thought to reduce administrative burdens on taxpayers and the IRS.6
Released Guidance
Final regulations (TD 10037) provide guidance on the 1% excise tax on stock repurchases by publicly traded domestic corporations and certain specified affiliates. Notably, the IRS is withdrawing the “funding rule,” subjecting foreign corporations to the tax on stock repurchases when those transactions are indirectly financed by their U.S. subsidiaries as a means of avoiding the tax.7
Notice 2025-69 provides guidance to individual taxpayers eligible for tips or overtime deductions as introduced by the OB3. For more information, read our FORsights™ article, “IRS Provides Guidance to Individuals on Tips & Overtime Deductions.”
Notice 2025-71 announces that the U.S. Department of the Treasury and the IRS will issue proposed regulations under Section 139L, which excludes interest income on qualified loans secured by rural or agricultural real property. It provides interim guidance that taxpayers may rely on until final regulations are published, including definitions, eligibility criteria for qualified lenders and loans, and rules for determining fair market value and refinancing. The notice also requests public comments on specific issues related to the application of §139L, with a submission deadline of January 20, 2026.
Revenue Ruling 2025-24 provides the December 2025 applicable federal rates (AFR), adjusted AFR, adjusted federal long-term rate and long-term tax-exempt rate, percentages for determining the low-income housing credit, and the federal rate for determining the present value of an annuity, an interest for life or for a term of years, or a remainder or reversionary interest.
The IRS has released an updated 2025 draft of Form 8824, Like Kind Exchanges (and §1043 conflict-of-interest sales). Changes include new reporting for OB3 provisions to defer tax on the gain from the sale or exchange of qualified farmland and Opportunity Zones.
From the States
Delaware has enacted H.B. 255, decoupling the state from certain provisions of the OB3. The state’s House passed the legislation the week prior.
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“No Plan for Obamacare Price Hikes as Congress Exits for Holiday,” bloombergtax.com, November 21, 2025.
- 2“Democrats Say It’s Too Late for Any ACA Credit Alternative,” taxnotes.com, November 20, 2025.
- 3“Defense, Spending, Nominations Top Thune’s December Senate Plans,” bloomberglaw.com, November 19, 2025.
- 4“Treasury, IRS to Release Wave of New Guidance in Coming Months,” bloomberglaw.com, November 21, 2025.
- 5“Proposed Rules for Crypto Broker Reporting Under OMB Review,” taxnotes.com, November 18, 2025.
- 6“IRS to Provide Automatic Penalty Relief Next Filing Season,” bloomberglaw.com, November 18, 2025.
- 7“IRS Scraps ‘Funding Rule’ in Final Stock-Buyback Tax Regulations,” bloomberglaw.com, November 21, 2025.