Wake Me Up When September Ends: Previewing Congressional Action After the August Recess
Tax Alert
Unable to resolve internal differences over efforts to disclose the Jeffrey Epstein files, Republicans in the House chose to start the August recess early last week. In the Senate, however, the entire August break is up in the air after the president issued a call to cancel recess plans and work through the month to confirm his nominees.
Even if the Senate stays in session, tax policy will likely stay in the background in August as Majority Leader John Thune (R-SD) lines up nominations to run the gauntlet of procedural votes for nominees leading to confirmation. More than 130 nominations are currently pending. Leader Thune has also indicated that the Senate would work on the National Defense Authorization Act (NDAA) and fiscal year (FY) 2026 appropriations bills if the Senate stays in session in August.
The one significant tax policy issue expected in August is the deadline for action on the president's executive order to "strictly enforce the termination of the clean electricity production and investment tax credits under sections 45Y and 48E of the Internal Revenue Code for wind and solar facilities." The order directs the Department of the Treasury to take action within 45 days of enactment of H.R. 1, which includes "issuing new and revised guidance" to prevent the circumvention of placed-in-service rules and to police the new law's foreign entity of concern restrictions. The deadline for action appears to be on or around August 18 and it will be interesting to see if that holds up.
If the Senate does manage to salvage some of its August break, the schedule puts the Senate (and House) back at work on September 2. From there, the next big deadline is October 1, when FY 2026 begins. As always, Congress is behind schedule on advancing its appropriations bills, making it all but certain a continuing resolution (CR) will be needed to carry forward federal spending to avoid a government shutdown. Both chambers plan to be in recess the third week of September, but that could get delayed or canceled if a deal cannot be reached on a CR.
As for other September activity, there will be three special elections to fill the seats of Democratic House members who unfortunately passed away earlier this year. Democrats expect to retain these seats – narrowing the already razor-thin margin that Republicans have in the House. We also expect discussion of another tax package – either another reconciliation bill or a bipartisan effort – to continue in September, although any realistic consideration of such a bill will have to wait until the government funding issue is resolved.
Unless events warrant, Tax Take will be on hiatus until September. And even if the Senate stays in session, we hope you enjoy the summer recess! #TaxTake
In the News
Marc commented in Thomson Reuters on the post-H.R. 1 congressional tax agenda: "It would be really hard to do another reconciliation bill this year... It may be really hard to do a bipartisan bill at the end of the year."
Jorge discussed the need for IRS guidance following the enactment of H.R. 1, the One Big Beautiful Bill Act, in Law360. "The small business community obviously is going to care about the R&E provisions a lot. And I think they're [] waiting for guidance on how to move forward."
The information contained in this communication is not intended as legal advice or as an opinion on specific facts. This information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. For more information, please contact one of the senders or your existing Miller & Chevalier lawyer contact. The invitation to contact the firm and its lawyers is not to be construed as a solicitation for legal work. Any new lawyer-client relationship will be confirmed in writing.
This, and related communications, are protected by copyright laws and treaties. You may make a single copy for personal use. You may make copies for others, but not for commercial purposes. If you give a copy to anyone else, it must be in its original, unmodified form, and must include all attributions of authorship, copyright notices, and republication notices. Except as described above, it is unlawful to copy, republish, redistribute, and/or alter this presentation without prior written consent of the copyright holder.