The US federal government shut down after midnight on 1 October following the Senate's failure to gain 60 votes to pass a Republican continuing resolution (CR) to fund the government until 21 November. Democrats have insisted that a CR extend enhanced Affordable Care Act (ACA) premium tax credits that expire at the end of 2025, which Republicans have resisted. The 30 September Senate vote on the House-passed Republican CR (H.R. 5371) was 55-45.

It is not clear at this time how or when the impasse will be resolved and the government reopened.

The Senate Finance Committee on 1 October held a hearing titled "Examining the Taxation of Digital Assets," an issue that has gained increasing congressional interest given the widely recognized lack of specific crypto tax rules. The hearing saw differences of opinion on some of the main tax issues related to cryptocurrency, including whether a de minimis rule to exempt small-dollar transactions is appropriate or creates the potential for abuse, and whether a new subset of tax rules is required for crypto or current law is sufficient.

Prior to the hearing, the congressional Joint Committee on Taxation released a report (JCX-44-25) describing selected tax issues relating to digital assets under present law. A Tax Alert on the Finance Committee hearing provides details.

With the looming 15 October tax filing deadline, taxpayers with digital assets are reminded of the need to report those assets for the 2024 tax year. Although Treasury and the IRS have sharpened their focus on tax reporting and the Senate Finance Committee is exploring future tax legislation on digital assets, the rules for reporting 2024 digital-asset transactions generally remain the same as those in previous years. Sales, exchanges or other dispositions of cryptocurrency and other digital assets (including stablecoins) in 2024 are still generally reported on Form 8949, Sales and Other Dispositions of Capital Assets, and Schedule D.

The IRS on 30 September announced in Notice 2025-46 and Notice 2025-49 the government's intent to partially withdraw and revise proposed regulations on applying the corporate alternative minimum tax (CAMT).

Notice 2025-46 provides interim guidance on applying the CAMT to domestic corporate transactions, financially troubled companies and consolidated groups. Notice 2025-49 provides additional interim guidance on computing adjusted financial statement income (AFSI), including new AFSI adjustments not otherwise available under the existing proposed regulations. Notice 2025-49 also modifies the rules for relying on the existing proposed regulations and announces the IRS's intent to defer the proposed applicability date of the forthcoming regulations.

Taxpayers may rely on the interim guidance in Notice 2025-46 for tax years preceding the date the forthcoming proposed regulations are published in the Federal Register. Relying on the interim guidance in the notice will not cause a corporation to become subject to, or violate, the reliance rules in the preamble of the existing proposed regulations.

Taxpayers may generally rely on the interim guidance in Notice 2025-49 for tax years beginning before the date the forthcoming proposed regulations are published in the Federal Register; the reliance rules for the different provisions in Notice 2025-49 vary, however, with some being eligible for prospective reliance only (e.g., 2024 tax years and later). An EY Breaking Tax News provides more information; an extensive Tax Alert on the notices is pending.

Treasury and the IRS on 29 September also withdrew proposed regulations under IRC Sections 355, 357, 361 and 368 on the nonrecognition of gain or loss on corporate separations, incorporations and reorganizations, and accompanying multi-year reporting requirements for spin-offs. The proposed regulations, published in January 2025, primarily related to transactions to which IRC Section 355 applies and contained substantive rules on topics previously described in Notice 2024-38 and applied by the IRS in Revenue Procedure 2024-24. A Tax Alert is pending.

The IRS on 30 September issued the 2025—2026 Initial Priority Guidance Plan covering the period 1 July 2025 through 30 June 2026. The plan highlights 105 projects of which 11 were released as of 31 August. The Trump Administration's first such plan leans heavily on promising "One Big Beautiful Bill" guidance to implement the legislation, with a strong focus on international tax projects. The plan also focuses on deregulation, burden reduction and digital assets, among other areas.

In a flurry of recent US trade developments, President Trump on 29 September issued a Proclamation Adjusting Imports of Timber, Lumber, and Their Derivative Products into the United States. The Proclamation imposes tariffs on imports of timber, lumber and their derivative products, citing national security concerns. A 10% ad valorem duty will be applied to imports of softwood timber and lumber, while certain upholstered wooden products, kitchen cabinets and vanities will face a 25% duty beginning 14 October. A Global Tax Alert provides details.

On 25 September, President Trump informally announced new tariffs, effective 1 October, including a 100% tariff on branded pharmaceuticals unless production is underway in the US.

And in a notice issued on 26 September, the Department of Commerce's Bureau of Industry and Security (BIS) announced Section 232 investigations into imports of robotics and industrial machinery. Separately, BIS also issued a notice regarding Section 232 investigations into personal protective equipment (PPE) and medical equipment including devices. A Global Tax Alert has details.