The US Congress continues to consider how it will address the 30 September fiscal year deadline to avoid a government shutdown. At this point, a continuing resolution (CR) to extend government funding is all but assured, although the parameters are not clear. In this scenario, a bipartisan package of tax and other issues could be attached to a year-end spending bill.

Both the House and Senate are slated to be out of session the week of 22 September, shortening the period for consideration of a stopgap funding measure. Any CR or other government funding bill will require Democratic support to gain 60 votes in the Senate and some Democrats want an extension of enhanced Affordable Care Act (ACA) premium tax credits that expire at the end of 2025 in exchange for their support.

House Ways & Means Committee Republicans met on 9 September with Treasury Assistant Secretary for Tax Policy Ken Kies regarding the Trump Administration's implementation of tax provisions included in the "One Big Beautiful Bill Act" (OBBBA). According to press reports, Kies suggested Treasury would likely support member efforts to revive the IRC Section 899 retaliatory tax regime dropped from the OBBBA if other nations fail to abide by the 28 June G7 statement that called for a side-by-side system to fully exclude US-parented groups from the Undertaxed Profits Rule and the Income Inclusion Rule for domestic and foreign profits.

The OECD reportedly is currently working on proposed changes to the BEPS Pillar Two global minimum tax framework that are meant to take into account US concerns over Pillar Two and address the G7 agreement. Ways & Means Chairman Jason Smith (R-MO) has said members could return to the IRC Section 899 proposal if countries do not comply or impose taxes deemed too punitive.

In an 8 September letter to Treasury Secretary Scott Bessent, a group of mostly Democratic Senators and one House member raised concerns over two new interim guidance notices that they wrote are "intended to erode" the corporate alternative minimum tax (CAMT). The letter addressed Notice 2025-27, which revised the safe harbor for determining applicable corporation status for purposes of the CAMT, and Notice 2025-28 on the application of the CAMT to applicable corporations with financial statement income attributable to investments in partnerships.

In the letter, the members said Notice 2025-27 allows companies to avoid the CAMT if their income, under a simplified accounting method, is less than $800m, which is significantly higher than the Biden administration's threshold of $500m. "Further, this notice also indicates future potential erosion of the CAMT tax base by stating that Treasury and the IRS will reconsider the treatment of unrealized capital gains," the letter said. Additionally, Notice 2025-28 "creates additional complexity for tax administrators and risks enabling gaming and inconsistent outcomes across similarly situated taxpayers," the letter said.

The US Supreme Court, on 9 September granted certiorari and a motion to expedite oral argument in Trump, et al. v. V.O.S. Selections, Inc., et al., the case challenging the legal basis for President Trump's Reciprocal Tariff Policy. Oral arguments are scheduled for the week of 3 November.

The case follows a 29 August decision by the US Court of Appeals for the Federal Circuit, which held that President Trump exceeded his authority under the International Emergency Economic Powers Act (IEEPA) in imposing certain tariffs. Tariffs remain in force pending the Supreme Court's decision.

Importers and other taxpayers should be aware that, although the Supreme Court's decision could affect specific tariffs imposed under IEEPA, other duties, such as Section 301 tariffs on China and Section 232 tariffs on steel and aluminum, would remain unaffected. A Global Trade Alert provides details.