Here is a look at recent tax-related happenings on the Hill, including a proclamation regarding robotics and machinery imports.
Lately on the Hill
Election Results Could Shape Tax Agenda
Today is Election Day, and the results could help determine the direction of tax policy during the upcoming lame-duck session. If Democrats win the House and Republicans retain the Senate, lawmakers could pursue a bipartisan tax package addressing expired provisions along with measures that gained traction in 2026, including the bipartisan Taxpayer Assistance and Service Act and the tax treatment of digital assets. Such a package could potentially move with must-pass legislation, which includes government funding ahead of the December 11 deadline. If Republicans lose both chambers, they could use the lame-duck session to pursue another reconciliation bill.
White House Targets Robotics & Machinery Imports
On October 28, 2026, President Donald Trump issued a proclamation directing the U.S. Department of Commerce and U.S. Trade Representative to negotiate with trading partners to address national security concerns involving imports of robotics, industrial machinery, and their parts and components. The action follows an investigation under Section 232 of the Trade Expansion Act of 1962, which found that imports of these products threaten to impair U.S. national security, citing U.S. reliance on foreign imports, insufficient domestic production, and cybersecurity risks associated with certain foreign sources.
The proclamation does not impose new tariffs at this time. Instead, the administration will pursue negotiations and provide an update within 180 days. Depending on their outcome, Trump may consider additional measures, including tariffs, duties, quotas, fees, or a program to incentivize new U.S. investment in robotics and industrial machinery production.
Chinese Van-Type Trailers Face New Duties
The U.S. Department of Commerce issued antidumping and countervailing duty orders on van-type trailers and certain subassemblies from China, effective October 28, 2026. The orders follow final determinations that the trailers were sold in the U.S. at less than fair market value and Chinese producers and exporters were subsidized. Under the orders, U.S. Customs and Border Protection (CBP) will collect a 129.73% antidumping duty rate for Chinese exporters that do not qualify for a separate rate and a 134.75% countervailing duty rate for all other producers and exporters.
From the Courts
Court Leaves Limited Partner Self-Employment Tax Ruling in Place
The U.S. Court of Appeals for the Fifth Circuit declined to rehear K. Alain, LLLP v. Commissioner,1 leaving in place its ruling that a “limited partner” under Internal Revenue Code (IRC) Section 1402(a)(13) is a partner who plays no significant role in managing or running a business. The case concerns whether partners may exclude their distributive shares of partnership income from self-employment tax under the limited partner exception. The court previously vacated the U.S. Tax Court’s decision and sent the case back for consideration. By denying both panel and en banc rehearing, the court has left its new fact-specific standard in place.
Sham Trust Fails Economic Substance Test
In United States v. Edelman,2 the U.S. District Court for the District of Columbia found that a trust lacked economic substance under IRC §7701(o) and should be disregarded as a sham for federal tax purposes. The taxpayer argued that after purportedly transferring his 50% ownership interest in the business to the trust, the subsequent profit distributions were not income to him. The court rejected that position, finding that the trust did not materially change his relationship with the business or its income. He continued to exercise control over the business and its distributions, the trust lacked an independent trustee, its beneficiaries did not receive a real economic interest in the trust assets, and the taxpayer did not consider himself bound by the trust’s restrictions or trust law. The court, therefore, concluded that the trust should be disregarded.
CBP Reports Continued Progress on IEEPA Tariff Refund Processing
CBP reported that, as of October 23, 2026, a total of 315,069 declarations had been submitted through its Consolidated Administration and Processing of Entries (CAPE) system, with 222,754 passing file validations. The accepted declarations cover 44 million entries, and approximately $137.9 billion in potential and certified refunds have been accepted for processing.
CBP also reported that approximately $127.7 billion in refunds, including interest, had been certified and sent to the U.S. Department of the Treasury for disbursement. Notably, 19,797 refunds totaling approximately $990 million had not been transmitted because Automated Clearing House account information had not been provided by the importer of record or its authorized designee.
From Treasury & the IRS
IRS Updates Draft Form 8993 Instructions
The IRS released draft instructions for Form 8993 reflecting changes to IRC §250 under the One Big Beautiful Bill Act, including the renaming of foreign-derived intangible income (FDII) as foreign-derived deduction-eligible income (FDDEI) and global intangible low-taxed income (GILTI) as net controlled foreign corporation (CFC) tested income (NCTI). The draft instructions also reflect new exclusions from deduction-eligible income, revised FDDEI and NCTI deduction percentages, and other terminology and concepts.
IRS Renews Compliance Hiring
The IRS is hiring approximately 1,000 employees for its small business and self-employed and large business and international divisions, along with about 175 employees for its criminal unit.3 The hiring follows significant workforce reductions and comes as the agency works to rebuild capacity for examinations, collections, and other compliance efforts.
More Opportunity Zone Guidance Ahead
Kevin Salinger, acting assistant secretary for tax policy, said Treasury intends to release the list of eligible opportunity zones before the expanded program takes effect January 1, 2027 and is working on additional proposed rules.4 The U.S. Department of Housing and Urban Development also plans to roll out resources for developers and fund managers next year, including state listening sessions and opportunity zone benefits in its grant programs.
Trump Account Advisory Council Chair Announced
Frank Bisignano, CEO of the IRS, said he will chair an advisory council focused on Trump Accounts, with participants expected to include donors and philanthropists.5 The IRS also announced that Bisignano will contribute $250 toward Trump Accounts for eligible children in his hometown ZIP code in Brooklyn.
Released Guidance
Retiree Medical Account Use: Revenue Ruling 2026-22 provides that certain employees who are at least age 59½ and eligible for in-service pension distributions may be treated as “retired” for purposes of receiving medical benefits from an IRC §401(h) account, even if they remain employed. Using IRC §401(h) assets to provide those medical benefits does not violate the applicable requirements or adversely affect the pension plan’s tax-qualified status under IRC §401(a).
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.
- 1K. Alain, LLLP v. Commissioner, 5th Cir., No 24-60240, October 30, 2026.
- 2United States v. Edelman, No. 1:24-cr-00239, October 28, 2026.
- 3“As IRS Hires Again, Private Sector Watches for Enforcement Shift,” news.bloombergtax.com, October 28, 2026.
- 4“Treasury, HUD Tackle Opportunity Zone Guidance for New Program,” news.bloombergtax.com, October 29, 2026.
- 5“IRS CEO Bisignano to Chair Advisory Panel on Trump Accounts,” news.bloombergtax.com, October 29, 2026.