This week (April 20-24)

Congress: The House and Senate are in session this week. The current work plan is for an FY2026 budget resolution, allowing consideration of a narrow reconciliation bill to provide multi-year funding for the Immigration and Customs Enforcement (ICE) and Customs and Border Protection (CBP) agencies of the Department of Homeland Security, to be on the Senate floor as soon as next week. The effort is challenged by some skepticism that a follow-on third reconciliation bill would come to fruition, meaning members are hesitant to put their other priorities on the backburner. And there are concerns that ICE/CBP funding alone doesn't have sufficient appeal to achieve Republican consensus. Punchbowl News April 15 cited House Ways and Means Committee Chairman Jason Smith (R-MO) as saying funds for ICE and Border Patrol "aren't really popular things" with Americans. "If you're going to pass a reconciliation bill, it needs to be one that addresses the concerns of the American people, and affordability is the concern I hear more than anything," he said.

The Senate Finance Committee is holding two hearings with Administration officials this week:

• "The President's Fiscal Year 2027 Department of Health and Human Services Budget," with HHS Secretary Robert F. Kennedy, Jr., on Wednesday, April 22 at 10 a.m.
• "The President's 2026 Trade Policy Agenda," with U.S. Trade Representative Jamieson Greer, on Thursday, April 23 at 10 a.m.

The House Ways and Means Committee is also holding two hearings this week:

• "Protecting Patients and Taxpayers: Cracking Down on Medicare Fraud," on Tuesday, April 21 at 10 a.m.
• "The Trump Administration's 2026 Trade Policy Agenda," with Ambassador Greer, on Wednesday, April 22 at 10 a.m.

Last week (April 13-17)

Big picture: Several Administration officials testified on Capitol Hill this week, including Internal Revenue Service Chief Executive Officer Frank Bisignano before the Senate Finance Committee on April 15 and Office of Management and Budget Director Russell Vought at the House and Senate budget committees April 15-16. The Bisignano hearing was part of Tax Day activities in Washington that included Republicans continuing to celebrate the "One Big Beautiful Bill Act's" (OBBBA) tax cuts, President Trump heading to Nevada and Arizona to tout the benefits of last year's law, and Democrats taking the opportunity to push counterarguments by proposing bills that they say combat tax avoidance techniques used by the wealthy.

SFC Bisignano hearing: The Finance Committee tax hearing was wide-ranging, but most of the attention focused on CEO Bisignano's vow to audit wealthy taxpayers even with a reduced IRS workforce. Senator Sheldon Whitehouse (D-RI) questioned what he said is the Administration's reduction in interest in auditing the very wealthy, and a reduction in audits for those with $10 million in income or more. Bisignano restated that enforcement revenue is up and pledged, "We will go after every bad actor." Senator Whitehouse additionally suggested business audits would be down with the large business and international division losing nearly 20% of its staff, but Bisignano said IRS has leaned more heavily on technology. "I'm going to always ensure that we have the right number of staff to get every job done," he said. Bisignano repeatedly said enforcement revenue is up 12% over the year prior, and members asked about the agency's use of technology. "I think none of us likes taxes. I think it's really important that we're enforcing our tax law and that people aren't cheating on their taxes," Senator Todd Young (R-IN) said. "So, I know the IRS often finds itself up against very sophisticated and well-resourced taxpayers that may or may not be attempting to abuse tax rules, hence the importance of effectively identifying cases to audit." Bisignano said technology is used for data comparison that otherwise would have been done by hand. A WCEY Alert has details.

Tax-exempt groups: Also, during the hearing, Senator Raphael Warnock (D-GA) asked about what he said are the President's efforts to weaponize the IRS against political opponents, after President Trump in 2025 instructed IRS to investigate tax-exempt entities. He asked whether the Administration has requested audits of specific taxpayers. Citing prior comments from Bisignano that audits will not occur based on political views, Senator Warnock further asked about requests to examine groups that oppose immigration enforcement. Similarly, some Democrats expressed concerns about tax-exempt organizations being scrutinized because of their political views when Bisignano testified before the House Ways and Means Committee on March 4. In an April 14 letter, Reps. Lloyd Doggett (D-TX), Terri Sewell (D-AL), and other Ways and Means Democrats demanded answers from IRS CEO Bisignano on reports that the IRS has compiled a list of Democratic donors and "left-leaning" nonprofit organizations. "The President's use of the IRS to target any particular taxpayer is both unlawful and unacceptable," they said.

OBBBA tax cuts uptake: In conjunction with Tax Day and cited by CEO Bisignano during his appearance, the Administration announced that as of April 14:

• 53 million Americans have claimed one of the new tax cuts from the OBBBA
• 30 million claimed the senior deduction
• 25 million benefited from the overtime deduction
• 6 million benefited from the tips deduction
• 1 million benefited from the auto loan interest deduction
• 5 million opened Trump Accounts for dependents
• 1.2 million opened Trump Accounts for newborns

House Budget hearing: During Wednesday's appearance at the House Budget Committee, OMB Director Vought suggested the Administration's tax cuts are beneficial to the economy because, "when you continue to have good tax policy, revenues are going to go up, and we expect [them] to be higher than their historical average with the extension of the tax cuts that were done with the One Big Beautiful Bill." President Trump traveled to Nevada and Arizona this week to tout the benefits of last year's law, part of a broader Administration PR messaging effort on taxes. "We are trying to get the word out to the American people, because Congress did so much in that bill, so much that helps the American people," Vought said. "We want to explain that working family tax cut at every opportunity that we possibly can, so that they're aware of what they're going to see in their tax returns." Democratic Rep. Pramila Jayapal (D-WA) criticized profitable companies that she said pay no tax, compared to the 14.5% average tax rate paid by the middle class plus expenses mounting from the expiration of enhanced Affordable Care Act (ACA) premium tax credits. "Thanks to stripping healthcare from Americans, the middle 60% of Americans will pay $900 more on average than before Trump came in and created chaos with tariffs and healthcare and tax law that benefited the wealthiest," she said.

Wyden bills: Senate Finance Committee Ranking Member Ron Wyden (D-OR) has reintroduced four bills, addressing private placement life insurance (PPLI) contracts and grantor retained annuity trusts (GRATs), carried interest, and derivatives, all of which are issues he has been targeting in recent years:

• The Protecting Proper Life Insurance from Abuse Act (S. 4279), originally proposed as a discussion draft in December 2024, would protect the preferential tax treatment of traditional life insurance, separating PPLI policies, and deeming them Private Placement Contracts.
• The Getting Rid of Abusive Trusts Act (S. 4287), previously introduced in March 2024, would require that a GRAT have a minimum term of 15 years and a maximum life expectancy of the annuitant plus 10 years, prohibit any decrease in the annuity during the GRAT term, and generally treat transfers as a sale or exchange for income tax purposes.
• The Ending the Carried-Interest Loophole Act (S. 4330), previously introduced in 2023, would tax carried interest as ordinary income and prevent re-characterization of income by requiring fund managers to recognize their annual compensation that would be taxed as ordinary income.
• The Modernization of Derivatives Tax Act (S. 4331), previously introduced in 2021, would require investors in derivatives to annually pay tax on their gains or deduct their losses.

IRS: An EY Tax Alert, "Final regulations refine definition of tips and occupations qualifying for deduction," is available here.