This week (January 19-23)

Congress: The House is in session, but the Senate is out. The following congressional workweek (January 26-30), the opposite is true: the Senate will be back in session, but the House is currently scheduled to be out.

The Annual Meeting of the World Economic Forum at Davos is January 19-23.

Last week (January 12-16)

Government funding: The focus this week was largely on the appropriations process given the January 30 deadline for nine of the 12 annual spending bills (with the other three included in the November continuing resolution). The House has passed eight of the 12 bills total including, this week, the Financial Services and General Government and National Security, Department of State, and Related Programs Appropriations Act, 2026, which includes funding for the Treasury Department and Internal Revenue Service (IRS). The package, which represents a bipartisan and bicameral compromise, provides $11.2 billion for the IRS, including $5 billion for enforcement, $3 billion for Taxpayer Services, and $3.2 billion for Operations Support, and omits a House provision preventing the IRS from creating a free tax filing program. Remaining spending bills cover Department of Homeland Security (DHS), Labor-HHS, Defense and Transportation-HUD appropriations. DHS, which covers immigration enforcement, is potentially the most controversial, and appropriators hope to release the final four bills at the beginning of next week. Punchbowl News reported that the House-passed Financial Services/National Security package would likely need to be paired with the remaining bills to be cleared by the Senate the week of January 26, before the funding deadline. The Senate is out of session next week. "Our goal is to get all of these bills signed into law — no continuing resolutions that lock in previous priorities that don't reflect today's realities, no more disastrous government shutdowns that are totally unnecessary and so harmful," Appropriations Committee Chair Susan Collins (R-ME) said on the Senate floor Thursday.

ACA credits: There was little measurable progress made this week on efforts to address expired enhanced Affordable Care Act (ACA) premium tax credits (PTCs). A proposal by a group of senators that may include a two-year extension — potentially with an extended open enrollment deadline, an income limit, and a minimum payment requirement — doesn't appear close to being released, with some persistent sticking points and, according to press reports, leadership unwilling to intervene. President Trump released a health plan with provisions including redirecting credits to consumers instead of insurance companies that was not expected to gain any Democratic support. An ACA credits deal could possibly serve as a vehicle for other provisions, and, in any event, Democratic congressional aides have suggested that a resolution of the ACA credits issue needs to precede action on any business tax matters.

Reconciliation: Meanwhile, Republicans in the House appear increasingly inclined to pursue a second budget reconciliation bill with a focus on health care, despite a months-long split among members over whether that is necessary and feasible. House Speaker Mike Johnson (R-LA) said that he and members including Budget Committee Chairman Jodey Arrington (R-TX) met Wednesday to discuss what could be included in a reconciliation bill, according to a Politico story. Chairman Arrington has long said a second reconciliation bill is likely. House Ways and Means Committee Chairman Jason Smith (R-MO) said on Fox Business News January 13, "I would absolutely love to do a second reconciliation package. I just think that it's extremely, extremely difficult, Maria, because we're at 218 Republicans in the House, and that is, everyone is here, and no one is in the hospital. So, that's quite — quite difficult. I just don't see it passing — to be honest with you."

Related to Chairman Smith's comments, multiple press stories have checked in on the narrow House majority and the difficulties it poses. With the resignation of Rep. Marjorie Taylor Greene (R-GA) and passing of Rep. Doug LaMalfa (R-CA), the House ratio is 218 Republicans to 213 Democrats. That ratio puts the Republican majority at two seats for passing legislation, or effectively one seat given that Rep. Thomas Massie (R-KY) has consistently voted in opposition to GOP leadership in this Congress. The Georgia special election is set for March 10, and Democrats will gain an additional seat in a January 31 Texas runoff election that is between two Democrats.

Housing: President Trump delivered a speech in Michigan January 13 and cited multiple proposals he is seeking action on, including by saying: "Next week, I'm going to provide much more detail about our housing policies so that every American who wants to own a home will be able to afford one … This will include a ban on large institutional investors buying up single-family homes all over the country … I've also announced that the U.S. government is purchasing $200 billion dollars of mortgage bonds to bring down mortgage rates." A story in last Saturday's Washington Post said the Trump administration is preparing an executive order focused on housing and could include proposals "like helping home buyers withdraw from their 529 or 401(k) savings accounts to make down payments without incurring tax penalties." Additionally, "Officials are discussing expanding Opportunity Zones — an economic tool for investing in distressed areas — and other deregulatory policies as a means of boosting homeownership, as well," the story said. National Economic Council Director Kevin Hassett said President Trump may announce a proposal allowing people to "take money out of their 401(k)s and use that for a down payment" at Davos next week.

Tax expenditures: The staff of the Joint Committee on Taxation has compiled a list of Federal tax provisions that expired in 2025 or are scheduled to expire in the future.

CAMT: Kevin Salinger, Deputy Assistant Secretary for Tax Policy at the Treasury Department, said January 13 at the New York State Bar Association Tax Section's annual meeting that Treasury and the IRS plan to issue one more notice on the corporate alternative minimum tax (CAMT) before issuing a reproposed package of rules at the end of 2026, Tax Notes reported.

IRS: Notice 2026-11 released January 14 announced that Treasury and IRS intend to issue proposed regulations that would implement the additional first year depreciation deduction under IRC Section 168(k), as amended by the "One, Big, Beautiful Bill Act" (OBBBA), including proposed regulations to include applicable qualified sound recording productions commencing in tax years ending after July 4, 2025.

Revenue Procedure 2026-08 sets forth updated procedures to obtain recognition of exemption from federal income tax on a group basis for 501(c) organizations that are affiliated with and under the general supervision or control of a central organization.

DSTs: The January 13 House Ways and Means Trade Subcommittee hearing on "Maintaining American Innovation and Technology Leadership" included discussion of digital service taxes (DSTs). Rep. Ron Estes (R-KS) said the proliferation of DSTs started in 2019 and the purpose of these taxes was to provide a benefit for other nations' firms over US innovators. While progress has been made, there is still work to be done, and concerns include France proposing to increase their DST and other nations proposing to enact DSTs or similar taxes, he said. With the recent OECD announcement of the Pillar Two side-by-side agreement, it is a hope that we can "use this momentum and goodwill to resolve the DST issue permanently," Estes said — with Congress, the USTR, and Treasury using all the tools at their disposal to protect US businesses.