Congress Returns from Holiday Recess: This week, the House and Senate returned from holiday recess and gaveled in the second session of the 119th Congress. On Monday, appropriators released a three-bill minibus consisting of the fiscal year 2026 (FY26) Commerce-Justice-Science, Energy-Water Development and Interior-Environment spending bills. The bill’s top-line figure comes in below current levels, but notably exceeds what President Donald Trump sought in his initial FY26 budget request. Click here to read more.
OECD Announces Pillar Two Agreement: On Monday, the Organisation of Economic Co-operation and Development (OECD) announced a “Side-by-Side package” under the Pillar Two global minimum tax regime that reflects the June 2025 framework between the United States and the G-7. Critically, the package establishes a safe harbor under which U.S.-headquartered groups can elect to be exempted from the global minimum tax’s income inclusion rule and undertaxed profits rules, provided certain conditions are met. Click here to read more.
IRS Provides Safe Harbor for Carbon Capture Verification Standards: On Dec. 19, 2025, the Internal Revenue Service (IRS) issued Notice 2026-01, which provides a safe harbor for eligibility determinations for taxpayers claiming the Section 45Q Carbon Capture and Sequestration credit. The guidance allows sequestration data to be verified by an independent engineer or geologist beginning in tax year 2025 to ensure continued compliance until a long-term solution replaces the greenhouse gas reporting framework. Click here to read more.
Residential Clean Energy Credits Expire: On Dec. 31, the section 25C energy-efficient home improvement credit and section 25D residential clean energy credit expired under the accelerated termination adopted by the One Big Beautiful Bill Act (OBBBA, Public Law 119-21). The section 25C credit allowed taxpayers to claim a 30% credit for qualified energy-efficient improvements, residential energy property or home energy audits not exceeding $1,200 annually. Click here to read more.
IRS Issues Guidance on Auto Loan Interest Deduction: On Dec. 31, the Internal Revenue Service (IRS) issued proposed regulations regarding the auto loan interest deduction. The rule addresses information reporting requirements for lenders, identifies eligible taxpayers and loans and guidelines for determining final assembly. Click here to read more.
W&M Committee Democrats Introduce the American Affordability Act: On Dec. 18, the House Ways and Means Committee Democrats introduced the American Affordability Act. The bill covers housing, child care, education, health care, and labor issues. Click here to read more.
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