Here is a look at recent tax-related happenings on the Hill, including the Senate scheduled to vote on expiring healthcare tax credits.
Lately on the Hill
Tax Administration Legislation Makes Its Way Through Congress
The House has passed two bills aimed at making reforms to the U.S. Tax Court and IRS penalty procedures.
The Tax Court Improvement Act (H.R. 5349) would allow pre-hearing and pre-trial subpoenas to be issued and empowers judges to extend deadlines in certain circumstances. These and other provisions would take effect upon enactment.
The Fair and Accountable IRS Reviews Act (H.R. 5346) requires supervisory approval of a penalty before any written communication of the penalty is sent to the taxpayer. The legislation, if enacted, would apply to notices issued and penalties assessed after December 31, 2025.
Furthermore, the Internal Revenue Service Math and Taxpayer Help Act (H.R. 998) has been signed by President Donald Trump, requiring the IRS to describe taxpayer mathematical or clerical errors in plain language, provide an itemized computation of related adjustments to correct the error, and information to request an assessment abatement. The act applies to notices sent 12 months after the date of enactment.
Health Insurance Tax Credit Receives Vote This Week
The Senate will hold a vote on expiring healthcare tax credits on December 11, as agreed to in negotiations to reopen the government last month. The Democratic proposal would extend the credits for three years in a “clean” bill without reforms demanded by Republicans. The legislation would need the support of 13 Republicans in addition to all 47 Democrats who reportedly support the bill.1
Republican leadership has already dismissed the proposal as they continue to sort out their own version. The House intends to release its plan this week, according to Speaker Mike Johnson (R-LA).
Businesses Sue to Preserve Tariff Refund Options
Many companies have filed suit in an effort to preserve their refund eligibility should the U.S. Supreme Court rule against tariffs imposed under the International Emergency Economic Powers Act (IEEPA).2
According to complaints filed in the U.S. Court of International Trade, “This Court and the Federal Circuit have cautioned that an importer may lack the legal right to recover refunds of duties for entries that have liquidated, even where the underlying legality of a tariff is later found to be unlawful.”
In general, once U.S. Customs and Border Protection finalizes a tariff, the entry is then “liquidated,” after which the duty may not be contestable. The plaintiffs are seeking the court’s authority to suspend liquidation and preserve refund claims should the IEEPA tariffs be determined unlawful.
From Treasury & the IRS
Justice Department Tax Enforcement Revamp Finalizes
As of November 30, 2025, the U.S. Department of Justice’s tax enforcement has been split under the Civil Division and Criminal Division. The responsibilities had previously been handled by a single Tax Division prior to the reorganization.3
The new Tax Litigation Branch of the Civil Division, headed by former Deputy Assistant Attorney General for Appellate and Review Joshua Wu, has its website up and running. Jennifer Hodge leads the Criminal Division after serving as deputy assistant attorney general over the Office of Enforcement Operations and the Narcotic and Dangerous Drug Section.
OIRA Reviews Removal of Partnership Basis Transaction Requirements
According to the Office of Information and Regulatory Affairs (OIRA), it has received for review proposed regulations that would withdraw regulations containing reporting requirements for certain partnership related-party basis adjustment transactions considered transactions of interest.
Released Guidance
Trump Accounts: Notice 2025-68 informs taxpayers of the intent to propose regulations under Section 530A, which establishes “Trump accounts” as a new type of traditional individual retirement account (IRA) for eligible individuals under age 18. The notice provides an overview of Trump accounts, including special rules during a growth period, contribution types such as a $1,000 pilot program payment, investment restrictions, and reporting requirements. Comments on the proposed regulations must be submitted by February 20, 2026. For additional details, read our FORsights™ article, “Trump Accounts: New Guidance Issued.” Furthermore, the IRS has released a draft Form 4547, “Trump Account Election(s),” that will be used to report required information.
Transition Rule for Dividends From Foreign Subsidiaries: Notice 2025-75 announces the intention to issue proposed regulations regarding the transition rule in §70354(c)(2) of the One Big Beautiful Bill Act, which modifies the application of §951(a)(2)(B) for certain taxable years of foreign corporations beginning before January 1, 2026. The forthcoming regulations will clarify how dividends subject to the transition rule affect reductions, define key terms, outline documentation requirements, and allow taxpayers to rely on these rules until formal regulations are published. Comments on the proposed rules must be submitted by February 2, 2026.
Effective Date for Disallowed Foreign Tax Credit: Notice 2025-77 announces a plan to issue regulations implementing §960(d)(4), which disallows a foreign tax credit for 10% of foreign income taxes related to amounts excluded from gross income under §959(a) following a §951A inclusion. This rule applies to taxable years of U.S. shareholders ending after June 28, 2025 and divides previously taxed earnings and profits (PTEP) into pre- and post-June 28, 2025 groups, with credits reduced for distributions from the latter. Taxpayers may rely on the guidance in this notice until the proposed regulations are published, provided they apply it consistently.
Sale or Disposition From Deduction Eligible Income: Notice 2025-78 informs taxpayers of the plan to issue proposed regulations clarifying the scope of §250(b)(3), which excludes income and gain from certain property sales or dispositions from deduction eligible income (DEI). These rules apply to intangible property and other property subject to depreciation, amortization, or depletion and include anti-abuse provisions for related-party transactions. Taxpayers may rely on the notice’s guidance for transactions after June 16, 2025 and until the regulations are finalized. Comments are requested by February 2, 2026.
Required Amendments List for Qualified Plans: Notice 2025-60 provides the 2025 Required Amendments List (RA List) for qualified plans under §401(a) and §403(b) plans, outlining changes that may require plan amendments to maintain compliance. It explains the remedial amendment period, generally ending December 31, 2027, and details which changes typically require amendments, including updates to required minimum distribution rules and partnership attribution rules.
Round 1 §48C Certifications: Announcement 2025-22 announces the first set of certifications for Round 1 of the Qualifying Advanced Energy Project Credit allocation program under §48C(e), covering the period from March 29, 2024 to September 30, 2025. This program allocates $10 billion in credits, with $4 billion reserved for projects in designated energy communities, offering a base credit rate of 6% or 30% for projects meeting wage and apprenticeship requirements.
Round 2 §48C Certifications: Announcement 2025-23 announces the first set of certifications for Round 2 of the Qualifying Advanced Energy Project Credit allocation program under §48C(e), covering January 10 to September 30, 2025. Approximately $6 billion in credits were allocated in this round, with $2.5 billion designated for projects in energy communities.
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“Congress Faces Packed Agenda and Little Time Before End of 2025,” bloomberglaw.com, December 8, 2025.
- 2“Dozens of U.S. and Foreign Companies Sue for IEEPA Tariff Refunds,” taxnotes.com, December 3, 2025.
- 3“What’s Next After Justice Department Dissolved Its Tax Division,” bloomberglaw.com, December 1, 2025.