The makeup of the Senate will be changing with Senator Markwayne Mullin (R-OK), a close Trump ally and a former House member, being nominated to replace Kristi Noem as Homeland Security Secretary. The nomination will need to go through the Homeland Security and Governmental Affairs Committee — chaired by Senator Rand Paul (R-KY), who has been the subject of some criticism from Senator Mullin — and the full Senate, where Mullin is understood to have strong support. Oklahoma Gov. Kevin Stitt (R) will appoint a placeholder senator until the next statewide election, with the stipulation that the appointee cannot run in the election. Ways and Means member Kevin Hern (R-OK), who has been active on international tax and other issues, and Rep. Stephanie Bice (R-OK) have reportedly expressed interest in running.

Additionally, Senate Finance Committee member Steve Daines (R-MT) this week chose not to run for re-election, making the announcement just before a filing deadline when Kurt Alme, the U.S. attorney for Montana, filed to run for the seat and Daines provided his endorsement, according to press reports. Senator Daines is among Finance members who have expressed interest in leading on cryptocurrency issues, and Senator Cynthia Lummis (R-WY), who has a crypto tax proposal, is also retiring. On the Republican side of Finance, Senator Thom Tillis (R-NC) is also retiring.

IRS — New this morning: IRS proposed regulations (REG-117270-25) relating to Trump accounts and proposed regulations (REG-117002-25) relating to the Trump accounts contribution pilot program.

Tax administration — During a March 4 House Ways and Means Committee hearing, IRS Chief Executive Officer Frank Bisignano repeatedly said, with 40% of the filing season complete, more than 43% of returns include Schedule 1-A that taxpayers use to report tax benefits from the "One Big Beautiful Bill Act" (OBBBA), including no tax on tips, no tax on overtime, no tax on car loans, and no tax on seniors. He highlighted the benefits of the OBBBA, saying there is an average $775 refund increase for those with a Schedule 1-A, and the largest percentage benefit is in the $100,000-and-under income category. Democrats inquired about reports of the IRS sharing taxpayer information with the Department of Homeland Security and expressed concerns about weaponizing the agency, including against tax-exempt groups. A WCEY Alert has details.

Reconciliation — The appearance before Ways and Means was consistent with Trump administration officials touting the benefits of the OBBBA ahead of the midterms, but the question asked among Republicans for many months is 'is that enough' or should another reconciliation bill with more of the party's priorities be pursued in the very narrowly controlled House. Punchbowl News reported this morning that House GOP leaders are leaning toward pursuing another package, but the main concern is revenue offsets that will certainly be demanded by conservatives. "The offsets are the areas that are hard to get agreement," House Majority Leader Steve Scalise (R-LA) said in a Punchbowl report this morning on prospects for the package.

Separately, Politico reported on a potential war funding package that could carry $15 billion in tariff relief for farmers and wildfire disaster relief. "GOP leaders have previously thwarted efforts by farm state Republicans to use unrelated government spending bills to advance billions of dollars in assistance to farmers still reeling from Trump's tariffs, which the Supreme Court struck down last month," the report said.

Trade — The United States Court of International Trade (CIT) has ordered U.S. Customs and Border Protection (CBP) to liquidate and, where applicable, reliquidate certain import entries without regard to duties imposed under the International Emergency Economic Powers Act (IEEPA). The order follows the Supreme Court's recent decision in Learning Resources, which held the IEEPA-based duties were unlawful. "All importers of record whose entries were subject to IEEPA duties are entitled to the benefit of the Learning Resources decision," the CIT noted. In its March 4, 2026, order, the CIT directed that all unliquidated entries entered subject to the IEEPA duties be liquidated without those duties and that any liquidated entries for which liquidation is not final be reliquidated on the same basis. The CIT noted its "exclusive jurisdiction" over such claims and the need for uniform treatment of affected entries.

Cryptocurrency — On March 5, IRS issued proposed regulations (REG-105064-25) that would provide digital asset brokers that are required to furnish to their customers written statements reflecting information provided to the IRS with respect to digital asset sale transactions with an alternative process for obtaining consent from their customers to receive these statements in an electronic format without offering a paper delivery alternative. IRS said the proposed regulations are intended to make it easier for digital asset brokers to provide statements electronically to customers, rather than sending paper copies.

Additionally, in Notice 2026-04, IRS requested comments on whether the requirements that brokers currently must meet to furnish certain payee statements to their customers in an electronic format and thereafter be treated as timely furnishing these statements should be modified and, if so, what those modifications should be. The notice also requests comments on whether the Treasury Department and the IRS should modify the electronic furnishing requirements applicable to any persons other than brokers required to furnish other payee statements.

Separately, IRS proposed to remove regulations that identify certain partnership related-party basis adjustment transactions and substantially similar transactions as transactions of interest, a type of reportable transaction (Basis Shifting TOI Proposed Regulations). A Notice of proposed rulemaking said Treasury and IRS finalized the Basis Shifting TOI Proposed Regulations with modifications in January 2025, but, since their publication, "taxpayers and their material advisors have criticized the Basis Shifting TOI Regulations … as imposing complex and burdensome compliance obligations on businesses." Treasury and IRS considered the public comments and determined the regulations may be appropriate for removal.

Housing — The Senate is on course to pass a bipartisan housing bill (S. 2651, using the House-passed HR 6644 as a shell) next week, after a procedural vote to begin debate easily passed, 84-6, on March 2. In an effort to create a product that the House could accept without changing, Senate sponsors released a substitute amendment that incorporated a number of provisions from the House-passed bill, though it did not include a package of regulatory relief items for community banks prized by House Financial Services Committee Republicans. The bill overall is a supply-focused approach that seeks to unlock more housing construction by easing regulatory bottlenecks, improving federal financing programs, and nudging states and localities to allow more development.

Enacting the bill would allow President Trump to claim a win on affordability issues. The White House pressed senators to include language prohibiting private equity firms and other large investors from purchasing single-family homes, reflecting an executive order the President signed in January. The language included in the substitute amendment would define such investors as those controlling 350 homes or more, with some exceptions for build-to-rent housing and rehabs; investors with more than 350 homes would have several years to unwind the excess houses out of their portfolios. Builders and real estate industry groups have been alarmed by the language, however, warning it could undermine housing supply and investment. The National Association of Home Builders on Wednesday (March 4) told senators it would oppose the housing bill over the issue: "We believe as currently drafted, the institutional investor language would undermine the production of purpose-built single-family rental housing, which typically serves families seeking rental housing with 3 or more bedrooms," NAHB wrote. National Housing Conference CEO David Dworkin said the group would support passing the bill in the Senate, but "seek to fix the language in the House."

Several House Republicans, including Financial Services Vice Chair Bill Huizenga (R-MI), have opposed the ban on large investors, with Huizenga saying he would vote against HR 6644 over the provision when the bill returns to the House side. Financial Services Chairman French Hill (R-AR) told Politico he was waiting to see if the language on institutional investors would improve before the bill passes the Senate, "because I understand it's still subject to change … We're prepared to be supportive of a provision … once we see how the wording turns out." Treasury Secretary Scott Bessent urged Congress to act with speed, posting on social media, "Now is the time for the Senate to pass the 21st Century ROAD to Housing Act, and for the House to swiftly send it to President Trump's desk for his signature."

Tax — Video of the Joint Committee on Taxation's "Panel on The Joint Committee's Role in the Tax Legislative Process in the Past and the Future," which included reminiscences from members and staff, is available here.

The March 4 Joint Economic Committee hearing on "Evaluating the U.S. Competitiveness and Investment Advantages of a Destination-Based Cash Flow Tax (DBCFT)" was postponed.

Bill introductions — On March 3, Senate Finance Committee members Todd Young (R-IN), Michael Bennet (D-CO), Jim Lankford (R-OK), Catherine Cortez Masto (D-NV), and Maria Cantwell (D-WA) introduced the IRA Charitable Rollover Facilitation and Enhancement Act (S. 3975) to allow charitable rollovers from individual retirement accounts to donor-advised funds. "Under current law, American taxpayers age 70½ or older are allowed to make Qualified Charitable Distributions (QCDs) from an individual retirement account (IRA) to a qualifying 501(c)(3) charity without counting the distribution as taxable income," according to a news release. "The law, however, does not allow these older Americans to make QCDs to a donor-advised fund (DAF) … "

Hearings — The Senate Finance Subcommittee on Fiscal Responsibility and Economic Growth has scheduled a hearing, "The Fiscal Outlook: 2027–2036," for Wednesday, March 11 at 3 p.m. Witnesses:

• Phillip Swagel, Director, Congressional Budget Office
• Maya MacGuineas, President, Committee for a Responsible Federal Budget
• Martha Gimbel, Executive Director and Co-Founder, The Budget Lab at Yale