Here is a look at recent tax-related happenings on the Hill, including President Donald Trump’s introduction of The Great Healthcare Plan.
Lately on the Hill
“Making the American Dream Affordable Again” Framework
As detailed in this FORsights™ article, “Republican Study Committee Releases Reconciliation 2.0 Framework,” on January 13, 2026, the Republican Study Committee released the Making the American Dream Affordable Again framework for a second reconciliation bill with several tax provisions aimed at facilitating homeownership, reducing healthcare premiums, and promoting energy independence and economic security for Americans. The framework estimates that the proposal would amount to a $126.1 billion tax cut.
“The Great Healthcare Plan”
Trump introduced The Great Healthcare Plan (GHP), which is aimed at lowering drug prices and insurance premiums, holding big insurance companies accountable, and maximizing price transparency. Instead of enhanced premium credits, Trump’s proposal calls for sending subsidies directly to consumers and not insurance companies.1 The president is calling on Congress to “pass this framework into law without delay.”
Senate Approves FY 2026 Commerce, Justice, & Science Appropriations Bill
On January 15, 2026, the U.S. Senate passed the Commerce, Justice, Science; Energy and Water Development; and Interior and Environment Appropriations Act, 2026 by a vote of 82 to 15. The legislation, which already passed the House by a vote of 397 to 28, provides support for law enforcement, economic development, scientific research, and other national priorities. The bill provides $78 billion in discretionary funding, including $71.4 billion in nondefense funding and $6.6 billion in defense funding. It now heads to Trump’s desk to be signed into law.
House Passes Two More FY 2026 Funding Bills
The House of Representatives passed two more bipartisan funding bills with a vote of 341 to 79: the Financial Services and General Government and National Security, Department of State, and Related Programs Appropriations Act, 2026. With the passage of these bills, which now heads to the Senate for consideration, the House has advanced eight fiscal year (FY) 2026 appropriation bills covering 26% of all discretionary funding.
As detailed in last week’s From the Hill, this bill would cut the IRS annual budget to $11.2 billion, 9% less than the $12.3 billion agency budget for FY 2025.
Next week, the House will take up its final spending package and potentially its hardest: Labor-HHS, Defense, Transportation-HUD, and Homeland Security. Republican appropriators are hoping to tie the last four spending bills into one package, but the Homeland bill may have to stand on its own account according to Rep. Rosa DeLauro (D-CT) as the bill has become contentious in light of current events in Minneapolis.2
House Committee Advances Tax Return Digitization Legislation
The House Ways and Means Committee advanced the BARCODE Efficiency Act on January 14, 2026 to the House floor for potential consideration. The bill seeks to streamline processing of electronically prepared tax returns that are submitted on paper by requiring the IRS to add a barcode to printed returns that can be scanned and converted into an electronic format.
U.S. Tariff Policy Update
For the 2025 calendar year, tariff revenue came in at $264 billion, up some $185 billion from the prior year. Due mainly to this record surge in customs revenue, the U.S. government has posted the smallest deficit in three years. The $145 billion budget deficit posted for December has shrunk the U.S. budget deficit to $1.67 trillion for the 2025 calendar year.
Adding to the surge in customs revenue, Trump announced via social media on Monday, January 12, 2026 that he is imposing a 25% tariff on goods from countries doing business with Iran.3 While there have not been any details regarding the scope or implementation of the tariffs, the president stated the new duty is “effective immediately.”4
In addition to the Iranian tariffs, Trump has also announced a 25% tariff on the import of semiconductors and semiconductor derivatives with a small carveout for companies that invest in U.S. production. In a presidential proclamation on January 14, 2026, the president denounced the U.S. overreliance on foreign supply chains of semiconductors, documenting that the U.S. buys roughly 25% of the semiconductors on the market but fully manufactures only about 10% of those chips. To implement the 25% tariff on semiconductors and chips, Trump used Section 232 of the Trade Expansion Act of 1962, which allows for tariffs for protecting U.S. national security interests.5
A country to receive a break from the 25% tariff on semiconductors and invest in U.S. production is Taiwan. On January 15, 2026, the U.S. and Taiwan announced terms to a long-sought trade pact that would lower tariffs on goods from Taiwan to 15% and see Taiwanese semiconductor companies increase financing for American operations by $500 billion. Taiwan’s technology industry would commit to making at least $250 billion in direct investments to expand advanced semiconductor, energy, and artificial intelligence operations in the U.S., and an additional $250 billion in credit guarantees for further investment in the American semiconductor supply chain.6
Trump is holding off on new tariffs targeting imports of critical minerals. This decision comes after a months-long review to determine whether foreign shipments threatened U.S. national security. In a presidential proclamation released on January 14, 2026, the president said he would first seek to negotiate agreements with foreign nationals to “ensure the United States has adequate critical mineral supplies and to mitigate the supply chain vulnerabilities as quickly as possible.” Depending on the outcome of these negotiations, import restrictions, such as tariffs, could be implemented.7
From the Courts
Sirius Solutions, LLLP v. Commissioner, 5th Cir., No. 24-60240 (State Designated Limited Partners Can Qualify for Self-Employment Tax Exemption)
The Fifth Circuit Court of Appeals has reversed the U.S. Tax Court’s decision to require a facts-based test when determining whether a partner is a limited partner for purposes of the exemption from self-employment taxes under §1402(a)(13). The appellate court upheld the plaintiff’s position that the determination of limited liability according to state law should determine eligibility rather than an individual partner’s activity in the limited partnership.
The ruling is effective for limited partnerships within the Fifth Circuit’s jurisdiction.
From Treasury & the IRS
White House Review of Partnership-Basis Regulations
The White House has completed its regulatory review of IRS and U.S. Department of the Treasury plans to revoke regulations on reporting of partnership-related basis-adjustment transactions. The proposed regulations would rescind final regulations issued that classified basis-adjustment transactions as potentially abusive “transactions of interest” that must be reported to the IRS.8
Released Guidance
Final W-2 Form: The IRS has published the final versions of the 2026 Forms W-2 and W-2 VI, introducing new reporting requirements for tips and overtime. No edits have been made from the draft version detailed in this edition of From the Hill.
Retirement Plan Rollover Safe Harbor: Notice 2026-13 provides safe harbor explanations that may be used by plan administrators when they provide written explanations to retirement plan participants about eligible rollover distributions, satisfying their requirements under §402(f). In the notice, the first safe harbor explanation applies to non-Roth accounts, and the second safe harbor explanation applies to Roth accounts.
Bonus Depreciation: Notice 2026-11 provides taxpayers with guidance on the permanent 100% additional first-year depreciation deduction for eligible depreciable property acquired after January 19, 2025, provided by the One Big Beautiful Bill Act (OB3). The notice also provides guidance on certain qualified sound recording productions that the OB3 added as property that may be eligible for the additional first-year depreciation deduction.
The IRS is planning to issue more bonus depreciation guidance on added property. Chris Wrobel, special counsel to the associate chief counsel, stated that the IRS is “currently working very actively” on further guidance under §168(n), which extends bonus depreciation to “qualified production property.”9
Corporate Bond Monthly Yield Curve: Notice 2026-12 sets forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for December 2025 used under §417(e)(3)(D), the 24-month average segment rates applicable for January 2026, and the 30-year Treasury rates, as reflected by the application of §430(h)(2)(C)(iv).
Rate Updates: Revenue Ruling 2026-03 provides the February 2026 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.
Group Exemption Letters: Revenue Procedure 2026-08 sets forth updated procedures to obtain recognition of exemption from federal income tax on a group basis for organizations described in §501(c) of the Internal Revenue Code that are affiliated with and under the general supervision or control of a central organization. The revenue procedure relieves each subordinate organization included in a group exemption letter from filing its own application for recognition of exemption. It also sets forth updated procedures a central organization must follow to maintain a group exemption letter.
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“Trump Floats Health Outline Without Obamacare Credits: BGOV Tax,” bloomberglaw.com, January 16, 2026.
- 2“House Passes Treasury, State Spending Measure as Deadline Nears,” bloomberglaw.com, January 14, 2026.
- 3Donald J. Trump, truthsocial.com, January 12, 2026.
- 4“Trump Vows 25% Tariff on Countries Doing Business With Iran (2),” bloomberglaw.com, January 13, 2026.
- 5“Trump Announces New Tariffs on Semiconductors,” taxnotes.com, January 16, 2025.
- 6“US, Taiwan Clinch Deal to Cut Tariffs, Boost Chip Investment,” bloomberglaw.com, January 15, 2026.
- 7“Trump Holds Off on Critical Minerals Tariffs After Probe,” bloomberglaw.com, January 14, 2026.
- 8“Withdrawal of Partnership-Basis Regs Clears White House Review,” bloomberglaw.com, January 14, 2026.
- 9“IRS Plans More Bonus Depreciation Guidance on Added Property,” bloomberglaw.com, January 15, 2026.