The US House of Representatives on 22 July passed the FY 2027 budget resolution (H. Con. Res. 113), the lead-up to a third budget reconciliation bill (3.0); the Budget Committee passed the resolution last week. The budget resolution provides for a US$95b Republican-only bill focused on defense funding and includes some voter ID and farm aid provisions. Tax provisions were omitted from the House reconciliation plan.

There is likely no quick path toward a Reconciliation 3.0 bill in the Senate, where Majority Leader John Thune (R-SD) said on 23 July he does not currently have 50 votes for the budget resolution.

Some recent reporting has also highlighted the promise of yet another budget reconciliation bill (4.0) during the lame-duck session following the mid-term elections in November.

Senate Majority Leader Thune on 23 July said he did not think the Senate would be able to complete work before the August break on the Clarity Act (H.R. 3633), a bill establishing a market structure for cryptocurrency and other digital assets. Earlier in the week, Senator Cynthia Lummis (R-WY) and other Republican sponsors released a new, 616-page version of the market structure bill, but it was quickly criticized by a group of seven pro-crypto Democrats led by Senator Angela Alsobrooks (D-MD) that has been negotiating with Republicans.

An IRS official this week was quoted at a Washington tax conference as saying that the IRS hopes to release an update of Revenue Procedure 2015-40 in the near term, although no target date was given. Revenue Procedure 2015-40 provides guidance on mutual agreement procedure requests.

Earlier this spring, the Director of the IRS Advance Pricing and Mutual Agreement Program was also quoted as saying the IRS was "very far along" in updating Revenue Procedure 2015-41, which provides guidance on various aspects of advance pricing agreements.

The Office of Information and Regulatory Affairs within the White House Office of Management and Budget (OMB) posted that on 20 July it had received for review Treasury and IRS proposed rules on foreign-derived deduction-eligible income and net controlled-foreign-corporation tested income under IRC Section 250.

There were a number of important, recent US trade developments.

The Office of the U.S. Trade Representative (USTR) on 23 July took final action in its Section 301 investigations into whether 60 trading partners "impose and effectively enforce a prohibition on the importation of goods produced with forced labor."

A fact sheet and Federal Register notice describe how the USTR is imposing additional ad valorem duties of 10% or 12.5% on substantially all products of these economies, subject to exemptions. According to USTR, the action "applies to the top 60 U.S. trade partners covering 99.4% of U.S. imports."

The additional duties take effect for goods entered for consumption on or after 24 July 2026. The action follows the USTR's 2 June 2026, proposed action, on which the USTR received more than 1,600 written comments and held public hearings 7-9 July 2026. A Global Tax Alert has details.

On 20 July, President Trump signed three proclamations imposing additional duties on a range of Canadian goods imported into the United States. The proclamations, under Section 338 of the Tariff Act of 1930, impose 50% tariffs on a broad range of Canadian goods across numerous sectors to "offset Canadian discrimination" against US alcohol, motor vehicles and dairy products.

The new tariffs take effect on 19 August 2026, and apply to all covered goods, regardless of whether they qualify for preferential duty treatment under the US-Mexico-Canada Agreement (USMCA). A Global Tax Alert provides details.

The announcement came as the US and Mexico began a third round of bilateral negotiations on 21 July in Mexico City related to the joint review of the USMCA. The US and Canada have not yet begun formal negotiations.