Here is a look at recent tax-related happenings on the Hill, including Senate panels set to vote this week on draft legislation establishing regulations for cryptocurrencies.
Lately on the Hill
House Vote to Extend Obamacare Tax Credits
Last week, the House voted to pass the discharge petition to extend enhanced Affordable Care Act tax credits for three years. The bill passed by a vote of 230 to 196 with 17 Republicans voting with Democrats. With the passing of this extension, the legislation is advancing out of the House and on to the Senate.1 According to the Congressional Budget Office, if passed, this three-year extension would cost the government $80.6 billion between 2026 and 2035.
This particular bill is not expected to pass in the Senate; however, a group of senators is working on a bipartisan proposal for extending the Affordable Care Act enhanced premium tax credit. Senators working on the proposal met with moderate House members on January 8 to discuss the bill and Rep. Michael Lawler (R-NY) stated the negotiators’ objective is to get the final details on a deal laid out in the Senate the week of January 12.2
Senate Panels to Vote on Crypto Regulation Bill
The Senate Banking Committee and the Agriculture Committee will vote on draft legislation establishing regulations for cryptocurrencies this week. The Agriculture Committee will vote on the digital commodities portion of the bill while the Banking Committee will vote on the securities portion. Senators and GOP leaders aim to pass a bill this year.3
IRS Budget Cuts
Bipartisan House funding legislation was released Sunday, which includes funding for various agencies, such as the IRS, the U.S. Department of the Treasury, the U.S. Department of State, and independent agencies like the U.S. Small Business Administration and the SEC. The IRS budget makes up the bulk in the appropriations package with $11.2 billion for the current fiscal year to be split between enforcement ($5 billion), taxpayer services ($3 billion), and operations support ($3.2 billion). The bill cuts the IRS annual budget 9% less than the $12.3 billion agency budget for fiscal year 2025, which would be the largest cut to annual appropriations for the agency since at least 2000.4
Trump Directs Exit From UN Forum Overseeing International Tax
President Donald Trump issued a presidential memorandum on January 7, 2026, directing U.S. executive departments and agencies to withdraw from international organizations, conventions, and treaties that “are contrary to the interests of the United States.” One of the 66 organizations listed is the United Nations’ (UN) Department of Economic and Social Affairs, which houses a committee responsible for handling international tax cooperation issues and provides assistance for work on a proposed UN global tax treaty.5
U.K. to Amend Global Minimum Tax Law
The U.K. will amend its global minimum tax law following the recent changes to the framework released by the Organisation for Economic Co-operation and Development (OECD) in January 2026. According to the exchequer secretary to the U.K. Treasury, Dan Tomlinson, the U.K. plans to consult on the new provisions before legislating the changes in the country’s next budget.6
Countries to Consider Discussions on Taxing Digital Economy
Now that the OECD finalized an agreement on the Pillar 2 side-by-side system, countries are getting prepared to continue multilateral discussions on the taxation of the digital economy. According to Rebecca Burch, the Treasury deputy assistant secretary for international tax affairs, the U.S. isn’t ready to have a detailed discussion on the subject so soon after countries reached an agreement on the side-by-side package; however, it’s time to step back and consider what the taxation of the digital economy means. 7
From the Courts
United States v. Reyes, 2nd Cir., No. 24-2333 (Willful Failure to Report Swiss Bank Account)
The Second Circuit Court decided that a couple must pay $1 million in penalties and interest because they deliberately did not report their Swiss bank account to the IRS. This marks the first time the U.S. Court of Appeals for the Second Circuit has considered what evidence is needed to meet the Bank Secrecy Act’s willfulness standard for filing a Report of Foreign Bank and Financial Accounts.8
From Treasury & the IRS
Treasury Unveils New Website
Treasury has released a new website that intends to provide taxpayers with more information on how the IRS is implementing the tax breaks from the law and how to claim them. The platform is designed to provide Americans with a clear view into Trump’s economic agenda. The website includes relevant press releases announcing IRS guidance, fact sheets, media interviews with Treasury Secretary Scott Bessent, and investment announcements.9
Treasury Plans for 2026 OB3 Guidance
According to James Wang, Treasury’s international tax counsel, Treasury needs and intends to release a notice of proposed rulemaking and final regulations for the One Big Beautiful Bill Act (OB3) international tax provisions that took effect in 2025. The push to get the final regulations and notice of proposed rulemakings published this year comes from the 18-month window from a statute’s enactment to retroactively apply rules.10
IRS Announces Updates for 2026 U.S. Tax Filing Season
The IRS opens the 2026 tax filing season starting on January 26, 2026.
The IRS is urging taxpayers to get ready for tax return filing season by reviewing the tax law changes implemented by the OB3 and open bank accounts as the IRS is phasing out paper tax refund checks. The news release also notes that income from digital assets and gig work is taxable and must be reported and that taxpayers will be able to open Trump Accounts for children born from January 1, 2025 to December 31, 2028.
IRS to Make Final Conservation Easement Settlement Offer
According to Kenneth Kies, Treasury assistant secretary for tax policy, the IRS will send one more settlement offer for syndicated conservation easement cases to cut down on a massive backlog of cases under examination and at the U.S. Tax Court. The Tax Court has a backlog of an estimated 700 easement cases, and the IRS has about 400 such cases in exam. The IRS has noted that the settlement letters were the “most effective and efficient way for taxpayers to bring finality to the transactions and achieve tax certainty.”11
Released Guidance
Retroactive QEF Elections: Revenue Procedure 2026-10 provides additional guidance on the process for requesting private letter rulings (PLRs) from the IRS for consent to make retroactive Qualified Electing Fund (QEF) elections under Section 1295(b) of the Internal Revenue Code.
Third-Party Network Backup Withholding: Proposed Regulations (REG-112829-25) revise the threshold for when certain third-party settlement organizations are required to perform backup withholding to comply with changes made in the OB3. It clarifies that third-party settlement organizations generally are not required to backup withholding on payments settled through third-party payment networks unless the gross amount of reportable payment transactions to a payee exceeds $20,000 and the number of transactions exceeds 200.
Oil Spill Liability Trust Fund Financing Rate Expiration: Announcement 2026-2 provides important information for taxpayers who are liable for the tax on petroleum under §4611 of the Internal Revenue Code.
From the States
Maryland Comptroller Issues Guidance on Decoupling From Federal Tax Provisions
Maryland Comptroller Brooke E. Lierman has published a tax alert providing guidance regarding the state’s conformity and automatic decoupling from certain provisions of the OB3. The alert states that for tax year 2025 and all prior tax years, Maryland is decoupling from certain provisions regarding the full expensing of domestic research and experimental expenditures, modification of limitation on business interest, and the special depreciation allowance for qualified production property.
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“Jeffries Tees Up House Vote to Extend Obamacare Tax Credits,” bloomberglaw.com, January 6, 2026.
- 2“Senators Float ACA Compromise as Doomed Extension Passes House,” taxnotes.com, January 9, 2026.
- 3“Agriculture Panel to Vote on Crypto Regulation Bill Next Week,” bloomberglaw.com, January 7, 2026.
- 4“IRS Dodges Steep Budget Cuts in Bipartisan Funding Proposal,” bloomberglaw.com, January 11, 2026.
- 5“Trump Directs Exit From UN Forum Overseeing International Tax,” bloomberglaw.com, January 8, 2026.
- 6“International Agreement on the Global Minimum Tax System,” questions-statements.parliament.uk, January 7, 2026.
- 7“Countries Must Reflect on Taxing Digital Economy, Burch Says,” taxnotes.com, January 9, 2026.
- 8“Hiding Swiss Bank Account From IRS Ruled ‘Willful’ on Appeal,” bloomberglaw.com, January 7, 2026.
- 9“Treasury Promotes Tax Breaks from GOP Law With New Website,” bloomberglaw.com, January 6, 2026.
- 10“Treasury Pushes Plans for 2026 OBBBA Guidance Blitz,” taxnotes.com, January 8, 2026.
- 11“IRS to Make Final Conservation Easement Settlement Offer,” taxnotes.com, January 8, 2026.