The Senate Finance Committee has issued its initial text of the One Big Beautiful Bill Act (OBBBA). See our alert for more details. Further updates and analysis to come!
Lately on the Hill
One Big Beautiful Bill Continues Path Through Senate
The OBBBA continued its journey through the Senate with heated debate as the bill passes through various committees and senators work through changes to the bill passed by the House. Hot-button issues continue to include making expiring provisions from the Tax Cuts and Jobs Act of 2017 (TCJA) permanent, the cap on state and local tax (SALT) deductions, clean energy credits, and Section 899 targeting “unfair foreign taxes.” Senate Finance Committee (SFC) Chair Mike Crapo (R-ID) vocally pushed for TCJA tax provisions to be made permanent rather than temporary as currently proposed in the OBBBA.1 This sentiment was supported by Treasury Secretary Scott Bessent’s testimony before the SFC in which he claimed that extending bonus depreciation, immediate expensing of domestic research and experimental expenses, and business net interest expense changes would lead to increased capital investment and hiring in the United States.
The SALT cap continues to be an issue as members of the Senate have expressed interest in the limit being lowered from the House-proposed $40,000 cap. Rep. Nicole Malliotakis (R-NY) said that senators are “playing with fire” and “running the risk of this entire bill imploding” if the proposed SALT cap limit is changed.2
Regarding the clean energy credits and §899 tax, Sen. Thom Tillis (R-NC) indicated the related provisions in the bill may be tweaked. Tillis maintained that the Senate would adjust the phase-out periods and bring back some transferability of the clean energy credits.3 In addition, Senate Majority Leader John Thune (R-SD) warned that the §899 provision would need a harder look to ensure it aligned with “pro-growth” aims.4
As the bill continues through the Senate, Thune is pushing for a vote on the last week of June and threatening to hold members of the Senate over the July recess if the bill is not passed by July 4.5
House Removes Employee Retention Credit Penalties From OBBBA
The House passed an amendment removing §112205 of the OBBBA. The House removed this provision due to potential violations of the Byrd Rule.
OBBBA Contains Language Enacting a Remittance Tax
Lawmakers embedded a section in the OBBBA calling for a 3.5% excise tax on international remittance transfers sent by foreign nationals living in the United States. This tax would be paid by the sender of the remittance and collected by transfer service providers who pay the tax to the government quarterly.6
House Passes Recissions Act of 2025
The House passed the Rescissions Act of 2025, which rescinds appropriated funds from various government agencies. According to the Congressional Budget Office (CBO) report, $9.4 billion of funds will be clawed back. The package removes U.S. funds earmarked for the Organisation for Economic Co-operation and Development (OECD), which brokered the global tax deal’s “two pillars.”7
U.S. & China Reach Trade Deal
The U.S. and China reached a tentative trade deal resulting from negotiations surrounding recent tariffs levied by both countries. According to President Donald Trump, the U.S. would levy a 55% tariff on Chinese goods while China would impose a 10% tariff on American products. On top of the tariff reductions, the U.S. would open its universities to Chinese students and the Chinese would supply the U.S. with rare earth minerals and magnets.8
Judicial Update
Federal Circuit Court of Appeals Extends Tariff Pause
The Federal Circuit Court of Appeals issued an extension of the stay blocking the U.S. Court of International Trade decision that sought to nullify Trump’s fentanyl-related tariffs and reciprocal-related tariffs. The appellate court previously granted a stay on May 29 until the court could hear arguments on June 9. This extension positions the case to be decided by the end of the summer as the case presents “issues of exceptional importance,” according to the ruling.
Supreme Court Rules Tax Court Lacks Jurisdiction to Review CDP Claims When IRS Abandons Underlying Levy
On June 12, the U.S. Supreme Court ruled in an 8-1 decision that the U.S. Tax Court lacks jurisdiction to hear collection appeals when the IRS abandons levies against a taxpayer’s property. In the case, taxpayer Jennifer Zuch requested a collection due process (CDP) hearing after the IRS enacted a levy against her personal property due to the misallocation of a quarterly tax payment. Zuch appealed the case later on in the U.S. Tax Court. Sometime between the CDP hearing and the U.S. Tax Court hearing, the IRS abandoned the levy against Zuch’s property. According to the Supreme Court, since the levy had been dismissed, the tax court lacked jurisdiction to hear the case.
From the Treasury & IRS
Senate Confirms Billy Long as IRS Commissioner
The Senate confirmed former U.S. Rep. Billy Long to be IRS commissioner in a 53-to-44 vote on June 12.9 Long follows Acting Commissioner Michael Faulkender and will serve out the remainder of former Commissioner Danny Werfel’s term, which wraps up in November 2027.
IRS Releases Automatic Method Change List
Under Revenue Procedure 2025-23, the IRS released its annual updates to the automatic tax accounting method change list. The listing includes 18 changes that include 10 removals of obsolete language and five clarifications. The three remaining updates focus on interest capitalization methods, foreign income tax methods, and contributions in aid of construction tax accounting methods. The interest capitalization change prohibits taxpayers from utilizing Regulation §1.263A-11(e)(1)(ii) and (iii) or the proposed regulations from 2024 to qualify for an automatic method change.10 In addition, the list removes method changes related to accounting methods for foreign income taxes from the cash to accrual automatic method change list. Lastly, for method changes related to contributions in aid of construction, taxpayers are required to utilize prior consent method change rules rather than an automatic method change.
Released Guidance
In Notice 2025-33, the IRS extended the transitional relief provided for certain digital asset brokers by one year. Under the notice, the IRS will not require brokers to withhold taxes for any digital asset transaction in 2026. This provision will be extended through 2027, but the broker must report the payee’s name and tax identification number (TIN) to the IRS for verification. The notice also issues relief to taxpayers who failed to pay backup withholding taxes due to a decrease in value of a digital asset received in a transaction of other digital assets in 2027. Lastly, the notice grants relief to taxpayers not previously classified as a broker as they transition into this status.
Notice 2025-35 sets forth the corporate bond monthly yield curve and corresponding spot segment rates, the 24-month average corporate bond segment rates, and the 30-year Treasury securities interest rates and weighted average rates.
The IRS announced that taxpayers affected by severe storms, straight-line winds, tornadoes, and wildfires in Missouri have until November 3, 2025 to file their 2024 tax returns and make the associated payments, make estimated tax payments for 2025, and make contributions to individual retirement accounts and health savings accounts for 2024. Penalties for payroll taxes and excise taxes will be abated as well, provided they were paid before March 31, 2025.
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.
- 1“Bessent Touts Full Expensing as GOP Races to Finish Tax Bill,” taxnotes.com, June 13, 2025.
- 2“Senate SALT Cap Plan Could Imperil Tax Bill, Malliotakis Says,” taxnotes.com, June 12, 2025.
- 3“Several Tax Issues Remain Unresolved for Senate Republicans,” taxnotes.com, June 12, 2025.
- 4“Key GOP Senator Expects at Least a Delay of ‘Revenge’ Tax,” bloomberglaw.com, June 10, 2025.
- 5“Thune Threatens to Nix July 4 Recess to Finish Work on Trump’s ‘Big, Beautiful Bill,’” thehill.com, June 11, 2025.
- 6“U.S. Lawmakers Ponder a Remittance Tax,” taxnotes.com, June 13, 2025.
- 7“US OECD Funding on the Chopping Block in Trump Recissions Plan,” bloomberglaw.com, June 4, 2025.
- 8“Trump: Tariffs on Chinese Goods Set at 55 Percent, US to Get Rare Earth Minerals in Deal,” thehill.com, June 11, 2025.
- 9“Long to Take Over at IRS With Change, Customer Service in Mind,” taxnotes.com, June 13, 2025.
- 10“Few Fireworks in Latest Updated to Automatic Method Change List,” taxnotes.com, June 16, 2025.