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Here’s a look at recent tax-related happenings on the Hill, including an all-time high reported in revenue from customs duties in April.
Lately on the Hill
Trade Negotiations Accelerating as U.S. Reports Record Revenue From Customs Duties
April 2025 marks an all-time high in revenue from customs duties as the Trump administration’s tariffs take effect.1 The approximately $16 billion collected in April is a 60% jump from March and more than double the amount collected from duties this time last year.2 The data comes as the administration has announced progress in trade deals with several countries.
On April 21, 2025, Vice President J.D. Vance and Indian Prime Minister Narendra Modi announced the terms of reference for a bilateral trade agreement (BTA) between the two countries. The agreement comes after President Donald Trump imposed a 26% reciprocal tariff on India, which was later delayed until July. According to a fact sheet provided by the Office of the U.S. Trade Representative (USTR), “The United States has long recognized significant trade barriers with India. As a result, the United States ran a $45.7 billion goods trade deficit with India in 2024, a 5.1% ($2.2 billion) increase over 2023. The United States welcomed the tariff reductions India implemented during the Prime Minister’s meeting with President Trump in February and its willingness to further reduce tariffs on U.S. products as part of the BTA.”
The U.S. and South Korea held talks last week, after which Treasury Secretary Scott Bessent told reporters he expects an “agreement of understanding” between the trading partners as early as this week. The two countries hope to have a deal done by July, before the 25% reciprocal tariff on South Korea—currently placed on hold—comes back into effect.3
USTR Jamieson Greer held talks virtually with Vietnam’s Minister of Industry and Trade Nguyen Hong Dien on April 23, 2025. “Both sides agreed on the importance of making swift progress towards reciprocal and balanced trade between the United States and Vietnam,” according to the USTR’s website. “The Ministers instructed their teams to engage in technical discussions in the coming days to discuss efforts to expand market access and address unfair trade practices.” Vietnam was subject to one of the highest reciprocal tariff rates of 46% before the imposition was postponed.
Trump and Prime Minster Jonas Gahr Store of Norway met in Washington, D.C. Trump said of the meeting, “We talked about trade, and we will definitely — we get along very well on trade. We’ll do something.”4 Before the reciprocal tariff freeze, Norway was assigned a 15% tariff rate.
Despite Trump’s insistence that trade talks were occurring between his administration and China, Chinese Commerce Ministry spokesman He Yadong denied any negotiations were happening. “I want to emphasize that there are currently no economic and trade negotiations between China and the United States. Any reports on development in talks are groundless and have no factual basis.”5 It has been reported that China has quietly waived tariffs on certain U.S. goods.6
Congress Returns From Recess, Begins Moving on Tax Bill
National Economic Council Director Kevin Hassett said a meeting between the “Big Six” will occur this week to negotiate tax policy and discuss Trump’s priorities.7 The group is made up of Hassett, Bessent, House Speaker Mike Johnson (R-LA), Senate Majority Leader John Thune (R-SD), House Ways and Means Chair Jason Smith (R-MO), and Senate Finance Committee Chair Mike Crapo (R-ID).
It is expected that the tax-writing House Ways and Means Committee will hold a two-day markup hearing during the second week of May. The purpose of markup hearings is for the committee to present the text of a bill, vote on amendments, and vote on whether to advance the bill and the amendments to the House floor.
European Union Looks to Appease U.S. With Change to Minimum Tax
Last week, it was reported that the European Union (EU) would meet today to discuss “options that include changing how US tax credits are treated to ensure that US companies are not subject to the EU’s minimum tax, limiting the EU’s ability to tax US-based companies, and giving equivalence to the US’s own minimum tax regime, a key demand of the White House.”8
The EU countries plan to discuss various issues, especially the Undertaxed Profits Rule (UTPR), which permits a country to impose taxes on a company if that company is part of a larger enterprise that pays less than a 15% tax rate. The U.S. would like to see Pillar 2 more in line with the global intangible low-taxed income (GILTI) regime.
Also on the docket is a plan to formalize transfer pricing guidelines among the EU countries and revamp value-added taxes.
The Judicial Report
State of Oregon, et. al. v. Trump, 1:25-cv-00077, U.S. Court of International Trade
Twelve states are suing the Trump administration over its imposition of tariffs under the International Emergency Economic Powers Act (IEEPA). Tariffs on China, Canada, and Mexico along with the “reciprocal tariffs” implemented on scores of other countries have all been executed under the assumed authority of IEEPA.
The complaint asserts, “The text and history of the [IEEPA] … confirm that the President cannot impose such tariffs under that law. And even if it did, it would not allow the worldwide tariffs he has imposed, which were not a response to an emergency as IEEPA defines it and have no nexus to the circumstances that purported to justify them.”
Denham Capital Management L.P. v. Commissioner, No. 25-1349
The private equity firm has appealed the U.S. Tax Court’s December ruling reaffirming its position in Soroban Capital Partners LP v. Commissioner that partnership allocations at issue were subject to self-employment tax. The appeal to the First Circuit follows Sirius Solutions’ appeal to the Fifth Circuit on similar grounds.
In dispute is the Tax Court’s precedent-setting interpretation of Internal Revenue Code Section 1402(a)(13) that limited partners under state law are subject to a functional analysis test to determine if such partners qualify for an exemption from self-employment taxes based on their activity in the partnership.
From the Treasury & IRS
IRS Retains Position Challenging Basis-Shifting Transactions
In last week’s edition of “From the Hill,” we explored the IRS’ issuance of Notice 2025-23 regarding partnership basis-shifting transactions.
The IRS did not withdraw related Revenue Ruling 2024-14. The ruling explains the IRS’ position to apply the economic substance doctrine to challenge basis adjustments in instances where related parties create disparities between inside and outside basis through various methods and exploit the disparities resulting from the nonrecognition transaction or distribution.
By leaving the ruling in place, the IRS may be signaling taxpayers to consider the economic substance standards when engaging in such transactions.
Released Guidance
The North Carolina Department of Revenue released a notice extending “Late Action Penalty” relief for state tax return filings and payments due to the ongoing circumstance caused by Hurricane Helene. The relief applies to filings and payments due on September 25, 2024 through September 25, 2025, if the filings are completed or tax is paid by September 25, 2025. The state’s announcement follows the relief extended by the IRS for federal tax return filings and payments as provided in last week’s edition of “From the Hill.”
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“US Customs Duties Hit New High as Trump Tariffs Take Effect,” bloomberglaw.com, April 23, 2025.
- 2“Daily Treasury Statement,” fiscaldata.treasury.gov, April 25, 2025.
- 3“Bessent Sees US, Korea Trade ‘Understanding’ by Next Week,” bloomberglaw.com, April 24, 2025.
- 4“Trump Says He Expects to Reach Deal with Norway on Tariffs,” bloomberglaw.com, April 24, 2025.
- 5“Trump Says US Talking with China on Trade After Beijing’s Denial,” bloomberglaw.com, April 24, 2025.
- 6“China Quietly Exempts Some U.S.-Made Products From Tariffs,” wsj.com, April 26, 2025.
- 7“Hassett Says Top Tax Negotiators Will Meet Next Week,” bloomberglaw.com, April 24, 2025.
- 8“EU to Consider Changing Its Minimum Tax Law to Quell US Tensions,” bloomberglaw.com, April 24, 2025.