This week (March 9-13)

Congress: The Senate is in session, and the House is scheduled to be out of session.

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

Last week (March 2-6)

Big picture: It was a shortened workweek in the House, with votes only on Wednesday and Thursday (March 4-5). The marquee event of the week from a tax perspective was a tax administration hearing in the Ways and Means Committee with the IRS CEO that continued the Republican effort to highlight the benefits of the "One Big Beautiful Bill Act" (OBBBA), and the Democratic effort to question the Administration's actions on immigration enforcement. And there are signs that, after months of deliberation, Republicans, in the House at least, are determined to pursue a second reconciliation bill. Income-based tax proposals from the Democratic side of Capitol Hill aren't viewed as effectuating any change in the near-term, but perhaps as a sign of things to come, including in the 2028 presidential election. There was also significant new guidance released this week, on Trump Accounts and cryptocurrency issues.

Senate: The most high-profile congressional news of the week concerned the makeup of the Senate. Senator Markwayne Mullin (R-OK), a close Trump ally and a former House member, is being nominated to replace Kristi Noem as Homeland Security Secretary. A placeholder will be appointed until the next statewide election, and the field for an elected successor is expected to include Ways and Means member Kevin Hern (R-OK), who has been active on international tax and other issues. Additionally, Senate Finance Committee member Steve Daines (R-MT) this week chose not to run for re-election. 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.

One of the main contests in Tuesday's primaries in three states — Texas, North Carolina and Arkansas — was the Texas Senate match-up that, on the Republican side, had Senator John Cornyn (R-TX) challenged by State Attorney General Ken Paxton (R) and Rep. Wesley Hunt (R-TX). With no candidate receiving votes that exceed the 50% vote threshold, a May 26 runoff follows between Cornyn and Paxton. On the Democratic side, state Rep. James Talarico (D) defeated Rep. Jasmine Crockett (D-TX). As expected, the open North Carolina Senate race will be Democratic former Gov. Roy Cooper against former Republican National Committee Chair Michael Whatley, after both won their primaries.

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.

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 March 6 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 the report.

Trump Accounts: On March 6, Treasury and IRS issued two sets of new rules on Trump Accounts established under the OBBBA, which are tax-advantaged investment accounts for every American child and include a government seed contribution for qualifying newborns:

• proposed regulations (REG-117270-25) that provide guidance on making an election to open a Trump account and reserve additional sections for further guidance on Trump accounts; and
• proposed regulations (REG-117002-25) providing guidance on making an election for the Trump account of an eligible child to receive a $1,000 pilot program contribution.

Cryptocurrency: On March 5, IRS 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.

Partnerships: On March 5, 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.

Income-based proposals: The billionaire's tax plan (S. 3956) introduced by Senate HELP Committee Ranking Member and Finance Committee member Bernie Sanders (I-VT) on March 2 is being viewed as a potential blueprint for Democrats in the 2028 presidential election and a reprise of a similar 5% high-income surcharge in former President Biden's Build Back Better Act, which passed the House in 2021 but stalled in the Senate. The Make Billionaires Pay Their Fair Share Act would establish a 5% annual wealth tax on billionaires to fund direct payments to those with lower incomes, rollbacks of health care cuts, and bolstering health and housing policies. Economists Emmanuel Saez and Gabriel Zucman said the legislation would raise $4.4 trillion over 10 years. Additionally, Senator Chris Van Hollen (D-MD) was expected to unveil a proposal to exempt those under a living-wage income threshold from income taxes, paid for with a surtax on millionaires.

Capital gains: Senators Ted Cruz (R-TX) and Tim Scott (R-SC) are now calling on President Trump to use his executive authority to index capital gains calculations for inflation. Conservative tax activists have been calling for the capital gains indexing change and some of them this week pushed GOP leaders to act on the "More Homes on the Market Act" (H.R. 1340, S. 3332) to update the principal residence capital gains exclusion by catching it up to inflation and indexing it going forward. The Washington Post March 3 reported on a letter in which Senators Cruz and Scott argue the Administration does not need congressional approval to make the change, though that point has been debatable over the years. Under the proposal, the basis of an asset is indexed for inflation, and the difference between that amount and the sale price taxed.

Taking executive action to index capital gains for inflation was discussed during the first Trump administration and has essentially arisen during each Republican presidency going back to 1992. "The Tax Section of the New York State Bar Association, in February 1992, sent a memorandum discussing not only the problems of indexing by regulation but also taking the position that such indexation by regulation was invalid," according to the Congressional Research Service (CRS). "Reportedly, the issue was considered by the George H. W. Bush Administration with some disagreement among officials."

Charitable tax: 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 … "

JCT: 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.