Congress remains out of session until mid-November, as all House members and nearly one-third of Senators are on the 5 November ballot. Nonetheless, in the wake of back-to-back storms Helene and Milton, a bipartisan group of Congress members from storm-ravaged states is calling for Congress to reconvene and pass necessary funding measures. Responding to press questions on the issue, House Speaker Mike Johnson has indicated there is no hurry to reconvene because funds were sent to the Federal Emergency Management Agency (FEMA) shortly before Hurricane Helene hit and it will take time for the states to assess how much assistance they need.

In the presidential race, polling continues to show the contest between Vice President Kamala Harris and former President Donald Trump as a dead heat. Likely outcomes of many House and Senate races also are difficult to predict. According to some press reports, control of Congress could do a "double flip," with Republicans taking control of the Senate and Democrats taking the House. The outcomes of the November elections will also affect how the expiration of numerous Tax Cuts and Jobs Act provisions is addressed on Capitol Hill and by the White House.

The 2024 Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group take place in Washington next week (21-26 October). Speaking ahead of the meetings, IMF Managing Director Kristalina Georgieva reflected on the likelihood of a soft landing for the global economy to be followed by weak growth that could be heavily affected by trade barriers.

Treasury Secretary Janet Yellen, speaking to the Council on Foreign Relations on 17 October, argued against isolationism and emphasized the importance of US participation globally. "Calls for walling America off with high tariffs on friends and competitors alike or by treating even our closest allies as transactional partners are deeply misguided," she commented.

Late last week, the IRS released a legal advice memorandum (AM 2024-002) that addresses the application of the IRC Section 246(b) limitation to the deductions under IRC Sections 243, 245 and 250 (i.e., global intangible low-taxed income (GILTI) and foreign-derived intangible income (FDII) deductions). This may signal that IRS exam teams intend to challenge taxpayers' positions on this issue. The point of disagreement centers on what limitations apply to IRC Section 250 deductions for FDII and GILTI, and, if a limitation exists, the manner in which that limitation is calculated.

Italy and France have proposed changes to their digital services taxes (DSTs), potentially increasing the tax burden on technology companies. Italy's 2025 budget would remove two DST thresholds, and proposals in the French lower house of Parliament would increase the DST rate from 3% to as high as 6%.