Tax Bytes: Week of April 27, 2026

Tax developments

IRS releases new guidance on opportunity zone nominations

On April 6, 2026, the IRS released Rev. Proc. 2026-14 (the Revenue Procedure), providing guidance regarding the nomination of census tracts to be designated as qualified opportunity zones (QOZs) pursuant to the new “OZ 2.0” framework under the One Big Beautiful Bill Act (OBBBA).

The Revenue Procedure in large part restates the nomination procedures in Internal Revenue Code section 1400Z-1(b), but the guidance also provides insight into the new nominations process under OBBBA and contains an appendix listing the census tracts eligible for nomination, which reflect the stricter eligibility requirements OBBBA introduced

Read our full alert here. 

Will 401(k) plans be “Democratized” by adding “Alts”?: DOL issues its proposed “Fiduciary Duties” regulation

On March 31, 2026, the Department of Labor (DOL) published in the Federal Register a proposed regulation entitled “Fiduciary Duties In Selecting Designated Investment Alternatives” (Proposed Rule). The DOL issued the Proposed Rule in response to White House Executive Order 14330, “Democratizing Access to Alternative Assets for 401(k) Investors” (Executive Order). Responding to concerns about litigation risk raised in the Executive Order, the DOL states that the Proposed Rule provides a “safe harbor” that fiduciaries of plans covered by the Employee Retirement Income Security Act of 1974, as amended (ERISA) can follow when evaluating designated investment alternatives, including those that include “alternative assets.” 

We believe the Proposed Rule provides a welcome roadmap to plan fiduciaries responsible for selecting all of a plan’s designated investment alternatives, not only those that relate to alternative assets. The regulation, when finalized, will allow fiduciaries to demonstrate their compliance with ERISA’s fiduciary duty of prudence. However, it remains to be seen whether the Proposed Rule will deter ERISA litigation. We are hopeful that the final regulation will make it easier for plan fiduciaries to extricate themselves from litigation earlier in the proceedings. We also expect improvements to the Proposed Rule will help reduce the compliance and litigation risk. We provide below a summary of the Proposed Rule, along with our observations, and we recommend some next steps.

During the next several months, retirement plan marketplace stakeholders including assets managers, mutual funds, unregistered investment funds, insurance companies, collective investment trusts and others should come to understand what steps they should take to help plan sponsors and similar fiduciaries meet their fiduciary duties under ERISA. The DOL requests that written comments be submitted by June 1, 2026 and we recommend that stakeholders take advantage of this opportunity to help the DOL craft a workable safe harbor.

Read our full alert here. 

The bipartisan Digital Asset PARITY Act: Representatives Miller and Horsford continue to push for clarity on digital asset taxation

On March 26, 2026, Representatives Max L. Miller (R-OH) and Steven Horsford (D-NV), both members of the House Ways and Means Committee, released an updated discussion draft of the Digital Asset Protection, Accountability, Regulation, Innovation, Taxation, and Yields Act (PARITY Act). The discussion draft represents a sustained bipartisan effort to bring statutory clarity to the taxation of digital assets, and its sponsors have signaled that the full text of the PARITY Act is expected this spring. 

The PARITY Act would largely extend existing Internal Revenue Code (Code) sections to apply to digital assets through targeted amendments. For example, the PARITY Act would extend: 

• The trading safe harbor under section 864(b) to cover trading of digital assets through US brokers, custodians, or digital asset exchanges; 
• Section 1058 to provide nonrecognition treatment for certain digital asset lending transactions; 
• The wash sale rules under section 1091 to sales of digital assets; 
• The mark-to-market rules under section 475 to apply to dealers and traders in digital assets; and 
• The constructive sale rules under section 1259 to apply to digital assets. 

“Digital assets” would be defined by reference to existing section 6045(g)(3)(D), which defines “digital assets” as “any digital representation of value which is recorded on a cryptographically secured distributed ledger or any similar technology as specified by the Secretary.”

The PARITY Act would also add new section 139J to the Code, which would exclude from gross income any gain or loss recognized from the sale or exchange of certain stablecoins whose value, at the time of sale, falls between $0.99 and $1.01. The act would also add a provision to the Code to allow taxpayers to defer income from mining and staking activities for a set period of time.

While the PARITY Act amends several Code sections, it does not incorporate all of the changes suggested by the 2025 digital asset report issued by the White House. For example, the PARITY Act does not:

• Amend section 7704 to treat gain from the sale of digital assets as qualifying income for purposes of the publicly traded partnership rules;
• Clarify the treatment of digital assets for purposes of the investment company rules under sections 351 and 721; or 
• Expand the classes of assets that may be held by regulated investment companies to include digital assets. 

The discussion draft remains under negotiation, and additional clarity is expected when the full text of the bill is released. It is unclear if Congress will take up the act in light of the upcoming midterm elections, but it is worth noting that governmental agencies have also been issuing guidance regarding digital assets. For example, Rev. Proc. 2025-31 provided guidance with respect to the impact of digital asset staking activities on an entity’s grantor trust status, and the SEC and CFTC issued guidance regarding the classification of digital assets for securities and commodities law purposes in late March. 

Recent Eversheds Sutherland Tax insights 

UK Supreme Court refuses capital allowances for environmental survey and study costs on offshore windfarm projects

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