Here is a look at recent tax-related happenings on the Hill, including new trade measures on imports of polysilicon and derivative products.
Lately on the Hill
Senate Passes Continuing Resolution, Begins Extended Recess
The Senate voted 90 to 6 to pass a short-term continuing resolution that would fund the federal government through December 11, 2026 and avert a shutdown when current fiscal year funding expires after September 30.1 The measure omits several Trump administration priorities, including emergency funding related to the Iran conflict and proposed voter identification provisions, but does include other priorities such as military hardware. The bill now heads to the House, which is expected to take it up when representatives return from recess on August 31. The Senate is scheduled to return on September 14.
White House Announces Tariffs on Polysilicon Imports
President Donald Trump signed a proclamation imposing new trade measures on imports of polysilicon and derivative products, citing national security concerns and the need to strengthen domestic supply chains. According to the White House’s fact sheet, the action establishes a minimum import price program for polysilicon, imposes a 15% tariff on derivative products, and authorizes a U.S. Department of Commerce incentive program to support U.S. production. The measures take effect on December 4, 2026.
From the Courts
Anti-Abuse Rule Denies QDI, FTC Claims
The U.S. Tax Court in SIH Partners v. Commissioner2 ruled that SIH Partners could not claim qualified dividend income (QDI) treatment or foreign tax credits (FTC) on roughly $170.8 million of dividends from Swiss stocks held as part of a complex hedged portfolio strategy. While the court rejected the IRS’ argument to recharacterize the transaction under the substance-over-form doctrine, it concluded that the arrangement was covered by the anti-abuse rule because the expected tax benefits significantly exceeded the transaction’s expected pre-tax economic profits. The decision highlights the limits of relying on technical compliance with hedging rules when a transaction is viewed as primarily tax motivated.
CBP Reports Progress on IEEPA Tariff Refund Processing
In a filing submitted to the U.S. Court of International Trade, U.S. Customs and Border Protection (CBP) said its Consolidated Administration and Processing of Entries (CAPE) system has processed a substantial volume of refund claims tied to duties imposed under the International Emergency Economic Powers Act (IEEPA). As of July 31, CBP reported that approximately $128.7 billion in potential and certified refunds had been accepted for processing, with about $100 billion already certified and sent to the U.S. Department of the Treasury for disbursement. The filing also notes that CBP continues to process additional claims and recently expanded CAPE functionality to enhance certain reconciliation-related entries.
From Treasury & the IRS
Tax Guidance Advances Through OIRA Review
The Office of Information and Regulatory Affairs (OIRA) completed a review of proposed guidance under Internal Revenue Code (IRC) Section 250, which is expected to provide implementation rules for the new foreign-derived deduction eligible income (FDDEI) and net controlled tested income (NCTI) framework enacted by the One Big Beautiful Bill Act (OB3).3
OIRA also completed a review of proposed guidance under §987, which is expected to provide relief allowing certain controlled foreign corporations to elect out of computing foreign currency gains and losses on amended 2025 returns.4
In addition, OIRA finished its review of proposed regulations addressing the treatment of the earned income tax credit, the additional child tax credit, the American opportunity tax credit, and the saver’s match credit, implementing restrictions on the availability of these tax benefits to certain immigrants.5
Finally, OIRA completed a review of final regulations regarding the car loan interest tax deduction.6
Treasury Leadership Nominees Confirmed
Treasury added four leaders to its senior ranks after the Senate voted to confirm Francis Brooke as deputy secretary, Erin Browne as undersecretary, and George McMaster and Sriprakash Kothari as assistant secretaries.7
Released Guidance
Backup Withholding on Third-Party Network Transactions: Final regulations (T.D. 10053) address backup withholding on third-party network transactions and adopted proposed regulations (REG-112829-25) without change. The regulations implement OB3 amendments that align backup withholding requirements with the §6050W de minimis reporting threshold for third-party settlement organizations and apply to payments made in calendar years beginning after December 31, 2024.
Trump Accounts: Proposed regulations (REG-101355-26) provide guidance on employer contributions under IRC §128 and related nondiscrimination requirements. The proposal would allow employers to contribute up to $2,500 annually to an employee’s or dependent’s Trump account on a tax-favored basis, establish testing rules similar to those used for dependent care assistance programs under §129, and provide a safe harbor for employers matching the government’s $1,000 pilot contributions.
Employee Plans Letter Rulings: Revenue Procedure 2026-30 modifies Rev. Proc. 2026-4 by requiring employee plans letter ruling and nonbank trustee approval letter requests to be submitted electronically through Pay.gov using Form 15662 beginning September 4, 2026. The revenue procedure also requires user fees to be paid through Pay.gov and eliminates paper submissions and checks for these requests.
Paid Family and Medical Leave Credit: Notice 2026-28 provides guidance on changes to the IRC §45S paid family and medical leave credit made by the OB3, including clarification on which premiums qualify, how employers should allocate premiums covering both qualifying and nonqualifying benefits, and confirms that an employer may use both the wage and premium methods as long as they do not claim both credits for the same leave benefits. Treasury and the IRS intend to issue proposed regulations.
Saver’s Match Contributions: Notice 2026-48 announces the IRS’ intent to issue regulations implementing Saver’s Match contributions under the SECURE 2.0 Act of 2022, which will provide eligible low- and moderate-income savers with a federal matching contribution of up to $1,000 beginning with taxable years after December 31, 2026. The notice outlines anticipated rules for eligibility, claiming the match, directing payments to retirement accounts, and retirement plan administration.
Defined Contribution Qualified Pre-Approved Plans: Announcement 2026-15 states that employers sponsoring defined contribution qualified pre-approved plans must adopt newly approved Cycle 4 plans by September 30, 2028 to remain within the fourth remedial amendment cycle. The announcement also opens the determination letter program for eligible adopters of Cycle 4 plans, allowing applications to be submitted from October 1, 2026 through September 30, 2028.
Qualified Overtime Deduction: The IRS issued FS-2026-13, updating and superseding guidance previously provided in FS-2026-01 on the deduction for qualified overtime compensation enacted by the OB3. The updated FAQs clarify deduction limits and timing, explain Fair Labor Standards Act coverage and exemption rules, and provide expanded guidance on Forms W-2, 1099-NEC, and 1099-MISC. The fact sheet also emphasizes that, beginning in 2026, qualified overtime compensation generally must be separately reported on Form W-2 for employees to claim the deduction.
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“Senate Passes Funding Bill That Ignores Trump’s Priorities,” news.bloombergtax.com, August 8, 2026.
- 2SIH Partners v. Commissioner, T.C., No. 10099-20, August 6, 2026.
- 3“Guidance on Export Tax Deduction Leaves White House Review,” news.bloombergtax.com, August 6, 2026.
- 4“White House Clears Currency Gain, Loss Tax Election Rules,” news.bloombergtax.com, August 7, 2026.
- 5“Trump’s Immigrant Tax Credit Rule Clears White House Review,” news.bloombergtax.com, August 5, 2026.
- 6“Car Loan Interest Tax Break Final Rules Clear White House Review,” news.bloombergtax.com, August 10, 2026.
- 7“Trump Treasury Picks Confirmed Despite Pushback From Democrats,” news.bloombergtax.com, August 7, 2026.