Here is a look at recent tax-related happenings on the Hill, including draft bipartisan digital asset legislation and an executive order on marijuana rescheduling.
Lately on the Hill
Congress Returns Next Week
The Senate is scheduled to convene on January 5, 2026, followed by the House on January 6, 2026, after the holiday recess.
Draft Bipartisan Digital Asset Legislation Released
Reps. Max Miller (R-OH) and Steven Horsford (D-NV) released a text of their bipartisan legislation concerning the taxation of digital assets. The draft includes rules for de minimis gains on regulated payment stablecoins, sourcing of income, and digital asset lending agreements. It introduces provisions for wash sale rules, mark-to-market elections, constructive sales, staking and mining elections, and charitable contributions involving digital assets. The draft includes agreed-upon policy direction as technical provisions are worked out, including administrative simplification and anti-abuse rules, while granting the U.S. Department of the Treasury authority to issue regulations for implementation.
President’s Order on Marijuana Rescheduling May Bring Tax Benefits
President Donald Trump signed an executive order instructing the attorney general to expedite the process to reschedule marijuana from a Schedule I substance to the less restrictive Schedule III. According to a fact sheet released by the administration, “Rescheduling marijuana to Schedule III is consistent with the 2023 recommendation from the Department of Health and Human Services (HHS) that recognized for the first time that marijuana has a currently accepted medical use.”
The rescheduling would remove deduction and credit restrictions under Internal Revenue Code Section 280E applicable to businesses that deal in Schedule I substances. The change is not yet complete, as the process will require a public comment period and new regulations. Section 280E also specifies prohibition of federal deductions and credits for taxpayers if their state law deems such substances illegal.1
From Treasury & the IRS
Senate Confirms Treasury’s Legislative Liaison
Derek Theurer has been confirmed by the Senate to serve as deputy Treasury undersecretary for legislative affairs. Theurer has been serving as deputy Treasury secretary and was formerly a senior advisor to Speaker Mike Johnson (R-LA).2
Released Guidance
Healthcare Pricing Disclosures: Proposed regulations (REG-107111-25) from the Departments of Labor, Health and Human Services, and Treasury propose amendments to existing Transparency in Coverage regulations to improve the standardization, accuracy, and accessibility of healthcare pricing disclosures. Key changes include reorganizing machine-readable files by provider network, adding contextual files and data elements such as product type and enrollment counts, reducing file size and reporting frequency, and requiring cost-sharing information to be available by phone in addition to online and on paper.
Stock Buyback Regulations: Final regulations (T.D. 10037) regarding the excise tax on repurchases of corporate stock have received corrections effective December 19, 2025.
Unused Housing Credit: Revenue Procedure 2026-9 publishes the amounts of unused housing credit carryovers under §42 allocated to qualified states for calendar year 2025.
Carbon Oxide Sequestration Credit: Notice 2026-1 provides interim guidance for claiming the §45Q carbon oxide sequestration credit for calendar year 2025 if the U.S. Environmental Protection Agency (EPA) does not launch its electronic reporting system (e-GGRT) by June 10, 2026. It establishes a safe harbor allowing taxpayers to meet reporting and certification requirements by preparing an annual report with all of the EPA’s subpart RR information and having it certified by an independent engineer or geologist instead of submitting it through e-GGRT.
Sale of Qualified Farmland Property: Notice 2026-3 provides relief from additions to tax under §§6654 and 6655 for taxpayers who make a valid §1062 election to pay tax on gains from the sale or exchange of qualified farmland property in four installments. The relief allows taxpayers to exclude 75% of the deferred tax liability from estimated tax calculations for the year of the sale, ensuring they are not penalized for underpayment while using the installment option.
Paid Family and Medical Leave: Notice 2026-6 extends the transition period provided in Revenue Ruling 2025-4 for states administering paid family and medical leave (PFML) programs and employers participating in them through calendar year 2026. During this additional year, states and employers are not required to comply with income tax withholding, reporting, and employment tax requirements for medical leave benefits attributable to employer contributions, and they will not incur penalties for noncompliance.
2026 Standard Mileage Rates: Notice 2026-10 provides the 2026 standard mileage rates for taxpayers to calculate deductible automobile expenses for business, charitable, medical, or moving expense purposes.
Voluntary Disclosure Practice: IR-2025-14 announces that the IRS has opened a 90-day public comment period, ending March 22, 2026, on proposed updates to its Voluntary Disclosure Practice, which include a streamlined penalty framework and clearer compliance requirements. Under the proposed changes, taxpayers who receive conditional approval must file all required returns, pay taxes and penalties in full, and sign necessary agreements within three months, covering a six-year disclosure period and avoiding criminal prosecution if fully compliant.
Tax Recovery on Exempt Dyed Fuel: Announcement 2026-01 explains that §6435 allows recovery of §4081 tax paid on diesel fuel or kerosene that later qualifies as exempt dyed fuel. Treasury and the IRS will issue guidance in early 2026 detailing the process for claiming these payments, and taxpayers are asked to hold claims until then because the IRS will not process them before guidance is released.
Section 163(j) Business Interest Expense: Fact Sheet 2025-9 regarding the deduction for business interest expense under §163(j) has been updated for changes introduced by the One Big Beautiful Bill Act (OB3).
Premium Tax Credit: Fact Sheet 2025-10 regarding the Premium Tax Credit, which is available to individuals and families purchasing health insurance through the Health Insurance Marketplace, has been updated for changes introduced by the OB3.
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.