This week (May 25-29)

Congress: The House and Senate are out of session for the Memorial Day recess.

There have been rumblings in recent weeks that the Senate Finance Committee would soon mark up the Taxpayer Assistance and Service Act (S. 3931) introduced in February by Senate Finance Committee Chairman Mike Crapo (R-ID) and Ranking Member Ron Wyden (D-OR), with provisions to digitize more tax returns, upgrade "where's my refund" functions and IRS online accounts, strengthen standards for paid tax preparers, and allow the U.S. Tax Court to hear cases relating to refunds. Press reports have suggested that the markup is likely to be scheduled for mid-June.

With Congress scheduled to be out of session this week, This Week in Tax Policy won't be published, though other WCEY Alerts will be issued as events warrant.

Last week (May 18-22)

Big picture: The Senate postponed until after the one-week Memorial Day recess the "vote-a-rama" process of limitless amendment votes and a final vote on the Immigration and Customs Enforcement (ICE) and Customs and Border Protection (CBP) Reconciliation 2.0 bill, over internal Republican disagreements on issues including security enhancements for President Trump's proposed White House ballroom and the newly announced $1.8 billion "anti-weaponization" fund. While President Trump and some congressional Republicans last week called for a suspension of the Federal gas tax, with GOP bills introduced to provide a 90-day holiday from the 18.4 cents-per-gallon gasoline and 24.4 cents-per-gallon diesel fuel taxes as affordability concerns persist ahead of the midterm elections, there has been little movement toward acting on the proposal in Congress. Senate Democratic leaders this week weighed in with their proposal to address high gas prices: increasing the excise tax on stock buybacks of large oil and gas companies.

Cryptocurrency: Following last week's closed-door Ways and Means Committee roundtable on digital assets tax issues with academics and private-sector tax experts on May 14, Reps. Max Miller (R-OH) and Rep. Steven Horsford (D-NV) released an updated version of their Digital Asset PARITY Act (H.R. 8899) on cryptocurrency tax issues. The bill would apply wash-sale and constructive-sale rules to digital assets, allow mark-to-market elections for digital asset traders and dealers, and provide a de minimis rule for stablecoin transactions. Ways and Means Chairman Jason Smith (R-MO) is preparing a cryptocurrency tax proposal but said he is holding out for Democratic support. Punchbowl News reported May 22, "The biggest hurdle is a lack of knowledge on both sides of the aisle about digital assets and how they fit into tax policy, according to interviews with more than half a dozen members." When asked what inning he thought crypto tax was in, Rep. Brad Schneider (D-Ill.) said, "We aren't even at the game yet," according to the story.

Tax administration: The House May 19 approved by voice vote Rep. Nathaniel Moran's (R-TX) Taxpayer Due Process Enhancement Act (H.R. 6506), addressing collection due process (CDP) proceedings. "This legislation advances fairness and accountability in our tax system — guaranteeing no one loses their day in court over arbitrary deadlines or IRS overreach," Rep. Moran said. "By protecting taxpayer rights, extending filing windows, and strengthening Tax Court jurisdiction, we are delivering real, lasting safeguards for every American." The bill would suspend the period of limitations for filing a claim for credit or refund during a CDP proceeding to give taxpayers more time to receive their refunds, block the IRS from applying a taxpayer's overpayment to any tax they are currently disputing, and expand the Tax Court's CDP jurisdiction.

Ways and Means hearing: During the Wednesday, May 20 Ways and Means Tax Subcommittee hearing, "Your Paycheck, Returned: How the Working Families Tax Cuts Delivered for Americans," Republicans celebrated the benefits of the "One Big Beautiful Bill Act" (OBBBA/OB3), while Democrats criticized the new law for its healthcare spending cuts and tax benefits that, they said, are skewed toward the wealthy. In an opening statement, Chairman Mike Kelly (R-PA) said, "Families across the country are seeing the Working Families Tax Cuts where it matters most — in their paychecks and refunds. The latest filing season data proves these policies are reaching tens of millions of families and workers as intended."

Ranking Member Mike Thompson (D-CA) said, "Families are paying more for groceries, more for rent, more for healthcare, more for childcare, and more for basic necessities. At the same time Republicans cut $1 trillion in healthcare funding that will force rural hospitals to close, put seniors out of nursing homes, and kick working families off their healthcare." Other Democrats were similarly critical. "Today's hearing is supposed to be about whether the Republicans' big ugly bill actually delivered for American families," said Rep. Suzan DelBene (D-WA). "And the evidence makes one thing unmistakably clear. The bill was never designed to help working families, it was meant to help the wealthy and the well-connected."

Bill introductions: On May 20, Senate Finance Committee Ranking Member Ron Wyden (D-OR), Democratic Leader Chuck Schumer (D-NY), and Senator Michael Bennet (D-CO) introduced The Taxing Buybacks from Big Oil Windfalls Act (S. 4588), to increase the excise tax on stock buybacks of large oil and gas companies from 1% to 25%.

Also on May 20, Senator Bill Cassidy (R-LA) introduced (S. 4584) to expand the new markets tax credit, which was made permanent in the OBBBA.

On May 21, Ways and Means Committee members Linda Sánchez (D-CA), Claudia Tenney (R-NY), Jimmy Panetta (D-CA), and Darin LaHood (R-IL) introduced the Rental Housing Investment Act (H.R. 8996), to allow builders to immediately deduct up to $150,000 per unit in construction costs, rather than depreciating the costs over 27.5 years, and provide an enhanced deduction of up to $250,000 per unit for projects that include income-restricted units reserved for working families. The Senate version of the bill (S. 4080) was introduced by Senator Lisa Blunt Rochester (D-DE) in March.

Global tax: On May 18, the OECD published a document that addresses practical compliance and coordination challenges arising in connection with the first filings under the Global Minimum Tax under Pillar Two, as well as updates to the Pillar Two Administrative Guidance. See EY's Tax Alert here.