Congressional Republicans continue to grapple with a range of possible approaches to respond to the expiration of enhanced Affordable Care Act (ACA) premium tax credits at the end of 2025. Whether a bipartisan compromise can be reached on ACA credits may determine if a potential bill could be paired with other bipartisan health, trade or tax issues. Possible tax proposals that could be part of a year-end bill include cryptocurrency tax provisions, US-Taiwan tax relief, and certain expiring provisions.

Recall also that Senate Majority Leader John Thune (R-SD) made a commitment to Democrats to hold a vote on extension of the ACA credits no later than the second week in December, in return for their support for passage of the continuing resolution that opened the federal government.

The IRS on 21 November issued final regulations (TD 10037) on the IRC Section 4501 excise tax on the repurchase of corporate stock. The IRS provided initial guidance on the excise tax in Notice 2023-2 and updated that guidance in proposed regulations released in April 2024 (REG-115710-22 and REG-118499-23). The government also issued final regulations (TD 10002) in July 2024 that described how covered corporations must report and pay the stock repurchase excise tax.

The just-released final regulations withdraw the controversial "funding rule," which provided that repurchases of stock by foreign corporations were subject to the excise tax to the extent those purchases were "funded" (broadly defined) by domestic subsidiaries of those foreign corporations. They also exclude certain repurchases that occur (or are deemed to occur) in acquisitive reorganizations, "take private" transactions and certain other mergers and acquisitions transactions, and expand exemptions for redemptions of certain preferred stock, among other changes.

IRC Section 4501 was enacted as part of the Inflation Reduction Act of 2022 and generally taxes "covered corporations" at a rate of 1% of the fair market value (FMV) of any stock of the covered corporation that is repurchased during its tax year by the corporation or its majority-owned or controlled subsidiary, minus the aggregate FMV of stock issued by the taxpayer during that year. A Tax Alert is pending.

Treasury Assistant Secretary for Tax Policy Kenneth Kies, who also serves as the acting IRS Chief Counsel, this week said work on "One Big Beautiful Bill Act" (OBBBA) international tax guidance is "very active." The Treasury official reportedly said guidance on the OBBBA's one-month deferral election in IRC Section 898(c)(2) to provide guidance on allocating foreign taxes between the short year and the succeeding tax year will be released before December.

Also coming in the next few weeks will be guidance on the definition of deduction-eligible income for purposes of the new foreign derived deduction-eligible income (FDDEI) regime as well as the impact on the foreign tax credit of the OBBBA's new 10% haircut on taxes paid on previously taxed earnings and profits. The official further was quoted as saying to expect guidance on the new pro-rata share rule for Subpart F under IRC Section 951.

The IRS on 17 November released draft instructions for filing Form 1099-DA, "Digital Asset Proceeds From Broker Transactions." The form and instructions apply for transactions completed after 2025.

In trade news, President Trump on 14 November signed an Executive Order (EO) titled Modifying the Scope of the Reciprocal Tariff with Respect to Certain Agricultural Products. The EO provides that certain agricultural products shall not be subject to the tariffs imposed under Executive Order 14257, "Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large And Persistent Annual United States Goods Trade Deficits." Affected products include beef, coffee, bananas and other agricultural products.

Also on 14 November, the US announced that it had reached trade frameworks with Switzerland and Liechtenstein. The White House Fact Sheet for those agreements states that the current country-specific tariff rate of 39% will be drastically reduced, and instead "the trading partners will pay a cumulative reciprocal tariff rate of no higher than 15%, the same treatment given to the European Union."

And on 13 November, the White House announced that the US reached trade frameworks with Argentina, Ecuador, El Salvador, and Guatemala. Although the deals make no changes to the country-specific rates, the US did commit to remove tariffs on some goods not "grown, mined, or naturally produced" in the United States while securing commitments from the Latin American countries to lower trade barriers for US exporters. The Administration released joint statements and fact sheets associated with each framework.

Five of the six agreements include pledges by the countries not to impose digital services taxes on US companies. The sixth framework agreement, with Argentina, states that country will refrain from "discrimination against U.S. digital services or digital products." A Global Tax Alert provides details.

The OECD on 19 November released a note updating the OECD Model Tax Treaty. Changes include clarifications on when cross-border remote working (such as from a home office) creates a taxable presence for business and a new alternative provision on how income from activities connected with the extraction of natural resources — such as oil, gas and minerals — should be taxed.

The latest update also includes amendments to observations and reservations by OECD member countries. A Global Tax Alert is pending.