The US Congress continues to make progress in enacting various FY26 appropriations bills in the face of a 30 January deadline to fully fund the government through the end of the fiscal year to avoid a partial government shutdown. Complicating matters, however, the US Senate has left Washington and is scheduled to be in recess next week, beginning 19 January, returning to session on 26 January. The House is scheduled to be out of session the week after next, ending on 30 January.

That raises the question of whether members will need to enact another continuing resolution to fund the government to avoid a shutdown or change the recess schedule, both of which leaders hope to avoid.

In terms of legislation, House Republicans appear increasingly inclined to pursue a second budget reconciliation bill this year with a focus on health care, despite a split among members over whether another reconciliation bill is necessary and feasible. A Senate proposal reflecting efforts to address expired enhanced Affordable Care Act (ACA) premium tax credits does not appear close to being released, with some persistent sticking points.

A senior Treasury official on 13 January told a New York State Bar Association Tax Section meeting that the government will soon release a fifth, final notice on the corporate alternative minimum tax (CAMT). The official said the five notices together will complete this phase of CAMT guidance.

Afterward, the government plans to repropose CAMT regulations in a comprehensive package. This will take place after 15 October, with the plan being to finalize the regulations package sometime in 2027.

A Treasury official this week was also quoted as saying the government is considering additional transition guidance related to cryptocurrency tax reporting and staking. The official further reportedly said the government is considering guidance on investment and grantor trusts that stake digital assets.

The IRS recently issued Revenue Procedure 2026-10, providing guidance on the eligibility for shareholders of passive foreign investment companies seeking consent to make a retroactive qualified electing fund (QEF) election under IRC Section 1295(b)(2). According to the IRS, the purpose is to improve the private letter ruling process for retroactive QEF elections, for requests made beginning 20 January.

OECD officials this week provided further Pillar Two information following the release of the "side-by-side" agreement in early January. An official who spoke during an OECD webcast reiterated that the Inclusive Framework is developing reporting rules that will streamline reporting obligations. Updates and clarifications to the Global Information Return are expected by mid-2026.

The Inclusive Framework also plans to address the possibility of arbitrage arrangements resulting from the new side-by-side system.

Further Global anti-Base Erosion (GloBE) administrative guidance reportedly will include simplifications for investment entities and minority-owned constituent entities. Other future OECD guidance will touch on issues associated with hyperinflationary economies and joint ventures, as well as mobile assets and real estate investment vehicles.

President Trump on 14 January signed two proclamations under Section 232 authority imposing new trade measures on semiconductors and related equipment and directing negotiations with trading partners on both semiconductors and critical minerals. The action follows Commerce Department findings in both investigations that US reliance on imports of semiconductors and critical minerals poses a national security risk.

Related to semiconductors, the President imposed a 25% tariff on select advanced semiconductors (e.g., chips for AI and high-performance computing) unless imports directly support a US technology buildout. The tariff took effect 15 January 2025. (A Global Trade Alert has details.)

The President also decided not to impose tariffs at this time regarding critical minerals. He directed the USTR to negotiate agreements with trading partners to address national security concerns. If those negotiations fail after 180 days, he may then impose trade restrictions.