Congressional tax committee leaders and Treasury officials provided insights into what to expect for the remainder of the year on tax issues during the Tax Council Policy Institute (TCPI) annual symposium in Washington May 14. Both Treasury Assistant Secretary for Tax Policy Ken Kies and Deputy Assistant Secretary for Tax Policy Kevin Salinger discussed the five Treasury corporate alternative minimum tax (CAMT) notices, which Kies said will be followed by specific regulatory proposals. Salinger said the target for release of the reproposed package is February 2027.

On foreign entity of concern (FEOC) regulations for energy credits, Salinger said Treasury is aiming to issue comprehensive guidance by the end of the year. "These are very technical rules. We're trying to walk a delicate line here," he said. "We need to enforce the statutory guardrails" but also have rules that are administrable to taxpayers that are making real investment decisions around energy and manufacturing supply chains. He said Treasury needs to be attentive to ownership and control, "but we also need to provide clear rules for taxpayers that are actually entering into real-world commercial arrangements."

Kies was asked about the FEOC 15% debt rule, under which one sign of effective control by specified foreign entities is 15% of debt being issued to such entities. "We are spending a lot of time on this issue, generally. How to deal with debt in various forms is a very challenging one, it is a high priority for us," he said, adding that it is still under consideration. "It's not a simple issue, but it's one that we are well aware of."

On the regulatory outlook for the remainder of the year, Salinger said Treasury is hoping to release guidance on several issues under the "One Big Beautiful Bill Act" (OBBBA/OB3) — finalizing proposed regulations and proposing regulations to follow notices — including on the:

• IRC Section 199A 20% qualified business income deduction
• IRC Section 163(j) interest deduction limitation
• IRC Section 45U zero-emission nuclear power production credit
• IRC Section 45X advanced manufacturing credit
• IRC Section 274(o) meals and entertainment provisions
• Full suite of international provisions in OB3
• IRC Sections 4960, 162(m) excessive remuneration provisions (4960 applies to tax-exempt organizations)
• IRC Section 45F employer-provided childcare credit
• IRC Section 45S paid family and medical leave credit
• IRC Section 4968 university endowment tax
• IRC Section 529A ABLE accounts
• IRC Section 1202 qualified small business stock rules

"That is kind of our road map of OB3 implementation by the end of the year," he said. Asked about the deregulatory agenda, Salinger said the objective is not to pull regulations simply for the sake of doing so, but to make the tax system more administrable, comprehensible and pro-growth. That can mean withdrawing rules, narrowing them, and replacing rigid rules with standards, safe harbors and reasonable method approaches. He cited actions thus far on the CAMT, basis shifting, the stock buyback excise tax, digital asset reporting rules, the withdrawal of the DPL (disregarded payment loss) rules, FIRPTA, etc. "The common theme here is a posture of regulatory restraint," he said. "We are not drafting regulations around the worst actor."

He also said that Treasury is involved in providing technical advice on House Ways and Means Committee Chairman Jason Smith's (R-MO) digital assets bill.

During Chairman Smith's appearance at the conference, he said of the near-term agenda, "Everything that we move forward on Ways and Means needs to be bipartisan. Because I want to legislate." He said there are proposals on health care, trade, and tax that can be accomplished on a bipartisan basis and that he intends to act on them over the coming months. Chairman Smith also suggested the threat of the IRC Section 899 provision was successful in helping reach a global agreement on a side-by-side system to exempt US companies from most global minimum tax requirements. When IRC Section 899 was raising strong concerns in the tax community, "our whole purpose was to force those foreign governments to come to the table and to recognize our tax system," he said. "And that's, in fact, what we did."

Senate Finance Committee Ranking Member Ron Wyden (D-OR) — who Chairman Smith said he has a positive working relationship with — said during his appearance at the conference that he hopes the side-by-side agreement will hold, and that, regarding 899, US policymakers should have some type of toolbox and retaliatory tool available. Ranking Member Wyden is working on a tax administration package with Chairman Mike Crapo (R-ID) and agreed with the assertion that the best opportunity for consideration of a bipartisan package is probably in the lame-duck session to follow the midterm elections. In providing an indication of where Democrats may turn when looking for revenues in the future — targeting billionaires — Wyden also stated that he will continue to focus on tax policies targeting the "ultra wealthy," such as deferral and non-recognition, and said that is his preference versus raising rates.

Wyden also said he is developing some fresh incentives for long-term care.

Reconciliation — While House leaders are looking beyond the current Immigration and Customs Enforcement (ICE) and Customs and Border Protection (CBP) Reconciliation 2.0 bill, toward a Reconciliation 3.0 bill over the summer that could provide war funding and perhaps affordability proposals, there has been no insight provided on what tax proposals may be included. Politico Morning Tax on May 14 said Chairman Smith demurred when asked about the potential contents of such a bill, while Rep. Kevin Hern (R-OK) said his guess is that the bill would include "a lot of health care."

It has long been the case that a third reconciliation bill would probably require deep spending cuts to make it through the House with all-Republican votes, and there is some question over whether it would primarily be a deficit reduction or tax cut bill. Punchbowl News on May 13 reported on Senate Republicans "striking a different and more cautious tone" than House leaders, with Majority Leader John Thune (R-SD) saying the current focus is on Reconciliation 2.0. And a bill with tax and health provisions would open the Senate vote-a-rama to limitless amendment votes on those issues, possibly including an extension of lapsed enhanced Affordable Care Act (ACA) premium tax credits. "That's just one example of a policy that could easily get more than 50 votes in the Senate with the midterms looming," the report said.

Crypto — After several months of uncertainty and fierce lobbying by banks and other stakeholders, the Senate Banking Committee on Thursday approved a bill (HR 3633) establishing a regulatory market structure for cryptocurrency and other digital assets. The final vote to advance the Clarity Act was 15-9, with two Democrats, Senators Ruben Gallego (D-AZ) and Angela Alsobrooks (D-MD), joining Republicans in supporting the bill. Both senators said their votes did not guarantee they would support the bill on the floor, however, as they and other Democrats said additional negotiations will be necessary for the bill to secure enough Democratic support to reach the 60-vote threshold on the Senate floor. Chief among their concerns was the absence of ethics language in the bill targeting senior federal officials who own or profit from crypto enterprises, with many Democrats citing President Trump's lucrative family-owned crypto company, World Liberty Financial. A simmering dispute between banks and crypto firms over payment of interest-like rewards on stablecoin deposits appeared to have ended in a loss for the banks, at least at this juncture, as compromise language on "paying yield," drafted by Senators Alsobrooks and Thom Tillis (R-NC), remained unchanged in the final product.

Democrats accused Chairman Tim Scott (R-SC) of unfairly blocking a number of their amendments from consideration, as Scott said they had been drafted improperly. As the markup progressed, however, Scott ultimately allowed votes on a group of bipartisan changes offered by Cynthia Lummis (R-WY), all of which were adopted. While some Democrats, such as Mark Warner (D-VA), said the move made them more likely to ultimately support the crypto bill on the floor, others said the chairman was protecting his GOP members from having to vote against politically difficult amendments, such as one that would have made changes favorable to banks on the stablecoin yield issue.

In a statement after the markup, Chairman Scott said, "Today, the Banking Committee showed the American people that Washington can still work together. We had a serious debate, worked through real differences, and came together around a shared goal: protecting consumers, supporting innovation, and keeping the future of finance in America. This legislation brings digital assets into the sunlight with clear rules, stronger safeguards, and better tools to stop bad actors." Ranking Member Elizabeth Warren's (D-MA) perspective was markedly different: "Our job is not to advance a pro-industry crypto bill that will grease the skids for the President of the United States' crypto grift, while tens of millions of Americans can't afford the basics," Warren said during the session. "Many members of this committee have underscored the importance of getting this bill right, and despite multiple calls for a public hearing on this bill … we have never had a single hearing on this bill." The Banking Committee's crypto bill must now be merged with the Senate Agriculture Committee's own product (which makes the Commodity Futures Trading Commission the chief regulator of digital assets) before coming to the floor.

Housing — House Republican leaders announced that they would bring the Senate-passed affordable housing bill (HR 6644) to the House floor next week, with an amendment making a series of changes drafted by Financial Services Committee Chairman French Hill (R-AR) and Ranking Member Maxine Waters (D-CA). While President Trump this week had urged the House on social media to simply accept the Senate bill, the 21st Century ROAD to Housing Act, House leaders nonetheless decided to change the bill and send it back to the other body. Language that the Senate had added to the bill at the White House's request, placing restrictions on larger investors' ability to own single-family homes, has proved problematic for House members as well as a number of housing industry stakeholders. The House's changes include a narrower definition of "single-family home" that would allow more investors to hold such properties, while a controversial provision requiring institutional investors to divest their build-to-rent homes after seven years was dropped. Hill and Waters also added a package of community banking deregulatory provisions that was in the House's version of the housing bill, which passed the House 390-9 in February. The Senate bill is expected to come to the House floor under suspension of the rules, meaning it would need a two-thirds supermajority to pass.

Bill introductions — On May 13, Senators Ben Ray Luján (D-NM) and Katie Britt (R-AL) introduced the Advancing Water Reuse Act, to provide a federal tax incentive (30% Investment Tax Credit) for manufacturers and other industrial entities to invest in water reuse systems and infrastructure, that aren't able to meet current demands. A release said the credit would cover projects including those that support "installation or expansion of onsite water recycling systems at manufacturing, food processing, and other industrial entities, including data center facilities."

A story on the bill in the May 14 Wall Street Journal, "Bipartisan Senate Push Aims to Reduce Water Waste at Data Centers," said: "Environmental and residential groups are hoping to scrap plans for data centers in their communities altogether, however. Large data centers can guzzle up to 5 million gallons of water daily, which is equivalent to the daily usage of a town with about 10,000 to 50,000 residents, according to a study on the Environmental and Energy Study Institute's website. Data centers use so much water to cool electrical equipment."

Schedule — The House is no longer scheduled to be voting on Monday and Tuesday (May 18-19). As a result, the Ways and Means Tax Subcommittee hearing, "Your Paycheck, Returned: How the Working Families Tax Cuts Delivered for Americans," has now been pushed back a day, until Wednesday, May 20 at 10 a.m.

Personnel — Senate Finance Committee Chair Crapo on May 14 announced new staff additions and posted a list of current Republican staff.

Today, May 15 at 12:00 p.m. is the EY Center for Tax Policy monthly update - May 2026. Register.