This week (May 4-8)

Congress: The House and Senate are out of session.

With Congress scheduled to be away this week, This Week in Tax Policy will not be published, though other WCEY Alerts will be issued as events warrant.

Last week (April 27-May 1)

Reconciliation: The House April 29 approved the Senate-passed, Republican-authored FY2026 budget resolution paving the way for a narrow budget 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. A separate bill to fund the remainder of DHS, minus ICE/CBP, was also cleared by the House and signed by President Trump. Senate Majority Leader John Thune (R-SD) said the work of crafting the reconciliation bill provided for by the budget resolution will commence after the one-week congressional recess and extend into later in May. President Trump has called for completion of a reconciliation bill by June 1.

Passing the resolution came after conservatives, along with some Committee chairs, argued that the reconciliation bill to follow must be expanded to address affordability concerns. However, the resolution does not include reconciliation instructions to either the Senate Finance or House Ways and Means Committees with jurisdiction over tax, trade, and healthcare, precluding those items from being added. A remaining option to address affordability and other economic issues is a potential third Republicans-only reconciliation bill, perhaps as early as June/July, that could include provisions related to the SAVE America Act voter ID bill, defense funding, and other GOP priorities. Defense funding, especially, could be a motivating force for a third reconciliation bill. House Speaker Mike Johnson (R-LA) was expected to detail proposals for a Reconciliation 3.0 bill this week, but difficult floor negotiations on multiple bills may have caused a delay.

Cryptocurrency: If there are policy add-ons to a follow-on reconciliation bill, or a bipartisan bill after the elections, one new-starter tax issue that could be evolving as a potential candidate for inclusion is cryptocurrency tax legislation. Punchbowl News on April 26 reported House Ways and Means Committee Chairman Jason Smith (R-MO) as saying he's close to finalizing a bill and a markup will be held soon. "We're at the 1-yard line," he said. The issue could possibly be bipartisan — Reps. Max Miller (R-OH) and Steven Horsford (D-NV) have together put forward a proposal — but the report said Chairman Smith is still having discussions with Democrats. Politico April 29 reported Chairman Smith as saying Democratic buy-in would be integral. "It needs to be bipartisan or I have no desire to move it," Smith said. The panel's top Democrat, Ranking Member Richard Neal (D-MA), seemed circumspect about his side's members signing on to such a proposal anytime soon. "The problem we have is that I just don't think enough members of Congress understand crypto at the moment," he said in the report. "There needs to be an educational process."

Ways and Means bills: The House approved several Ways and Means Committee bills by unanimous consent April 27:

• H.R. 4930, to expand the sharing of information with respect to suspected violations of intellectual property rights in trade, by Rep. Blake Moore (R-UT)
• H.R. 6956, BARCODE Efficiency Act, to require a scannable code on certain tax returns, by Rep. Brad Schneider (D-IL)
• H.R. 7971, Taxpayer Experience Improvement Act, to boost IRS customer service policies, by Rep. Dave Schweikert (R-AZ)
• H.R. 6495, Taxpayer Notification and Privacy Act, to expand IRS notice requirements for contacting a third party (e.g., employer or bank) for information related to a taxpayer's federal tax liability, by Rep. Greg Steube (R-FL)
• H.R. 5366, Doug LaMalfa Federal Disaster Tax Relief Certainty Act, under which "qualified net disaster losses" would be deductible to the extent they exceed $500 per casualty and without regard to whether aggregate net personal casualty losses exceed 10% of a taxpayer's adjusted gross income, by Rep. Steube
• H.R. 2347, Survivor Justice Tax Prevention Act, by Rep. Lloyd Smucker (R-PA)
• H.R. 5334, SEED Act of 2025, to allow early-childhood educators to deduct classroom expenses from their taxable income, by Rep. Jimmy Panetta (D-CA)
• H.R. 6903, Ensuring Children Receive Support Act, by Rep. Beth Van Duyne (R-TX)
• H.R. 6431, New Opportunities for Business Ownership and Self-Sufficiency Act, to increase the percentage of individuals who may participate in a Self-Employment Assistance (SEA) program, by Rep. Mike Carey (R-OH)

Additionally, H.R. 7959, the IRS Whistleblower Program Improvement Act, to revise the standard for review of whistleblower awards in the Tax Court and allow whistleblowers anonymity in proceedings, by Rep. Mike Kelly (R-PA), was approved by a 346-10 vote. As has been noted in the tax press, versions of many of the proposals are included in the February 26 "Taxpayer Assistance and Service Act," sponsored by Senate Finance Committee Chairman Mike Crapo (R-ID) and Ranking Member Ron Wyden (D-OR).

Bill introductions: On April 28, Senate Finance Committee member Marsha Blackburn (R-TN) introduced a bill (S. 4408) to extend biodiesel and renewable diesel incentives. The House version (H.R. 8497) was introduced on April 27 by Ways and Means Committee member Rep. Mike Carey (R-OH).

On April 30, Ways and Means member Jimmy Panetta (D-CA) introduced a bill (H.R. 8626) to provide for a middle-income housing credit.

IRS: The IRS has noticed a public hearing on Section 45Z Clean Fuel Production Credit proposed regulations (REG-121244-23) addressing credit eligibility rules, emissions rates, and certification and registration requirements for Wednesday, May 27.