The US Senate Finance Committee is expected to shortly release the tax and health sections of Senate Republicans' version of the House-passed budget reconciliation bill — perhaps as soon as today (13 June) or Monday. Significant potential tax changes to the House bill are expected, including with respect to the TCJA pre-cliffs, Inflation Reduction Act energy credit terminations, President Trump's tax proposals and possibly the state and local tax deduction cap.

There are reports that the Senate may want to include a delay in the House budget bill's new IRC Section 899, which would increase income tax and withholding tax rates and expand the application of the base erosion and anti-abuse tax (BEAT) rules on certain foreign-parented groups and inbound investors resident in countries with "unfair foreign taxes." Those "unfair foreign taxes" include taxes imposed under the undertaxed profits rule (UTPR) and digital services taxes (DSTs). At least one Republican senator was quoted as saying that instead, Republicans are seeking to make IRC Section 899 less "blunt," but keep it as an available tool for the President. The Senate package may also make additional significant changes to TCJA international tax provisions.

As the Senate moves forward with its version of the bill, House Republicans are warning their Senate colleagues that further tax cuts will need to be matched with spending cuts. A group of 37 House Republicans wrote to Senate Majority Leader John Thune (R-SD), saying "we remain unequivocal in our position that any additional tax cuts must be matched dollar-for-dollar by real, enforceable spending reductions."

Senate Republicans also appear a bit more relaxed in terms of meeting the self-imposed 4 July target to get a final budget reconciliation bill on the President's desk for signature. A new Congressional Budget Office (CBO) estimate on the federal debt limit, released on 9 June, indicated the government will run out of funds between mid-August and the end of September 2025, two weeks later than estimated in March. President Trump also recently weighed in on timing for the budget reconciliation bill, saying that while he prefers to get it done by a "certain date," he is not disturbed "if it takes a little longer."

The House Ways and Means Committee on 11 June held a hearing at which Treasury Secretary Scott Bessent testified and that largely focused on the potential economic effects of the House-passed budget reconciliation bill and proposed IRC Section 899. Responding to criticism of new IRC Section 899, the Treasury Secretary said there is considerable misinformation on IRC Section 899 and much of the pushback is coming from overseas companies.

The Senate on 12 June approved the nomination of former Rep. Billy Long (R-MO) to be the next IRS Commissioner. The Finance Committee reported the nomination out of committee on 3 June.

The IRS recently issued interim guidance (Notice 2025-27) providing a new optional simplified method for determining "applicable corporation" status for purposes of the corporate alternative minimum tax (CAMT). The Notice also waives estimated taxes attributable to CAMT for 2025 tax years.

The Notice further announces the government's intent to issue (1) additional interim guidance on a number of topics, including the CAMT treatment of partnerships and certain corporate and partnership transactions, and (2) new proposed regulations that would modify the CAMT proposed regulations that were issued in 2024.

The IRS released Notice 2025-33 on 12 June regarding digital asset transactions. It extends for an additional year the transitional relief from reporting penalties and backup withholding provided by Notice 2024-56 for brokers who are required to file information returns and furnish payee statements under IRC Section 6045 for certain digital asset transactions. Notice 2025-33 also provides transitional relief to brokers for sales of digital assets for customers that have not previously been classified as US persons.