This Week (June 29-July 3)

Congress: Only the House is scheduled to be in session. The Senate is out currently and not due to return until July 13.

The House Ways and Means Committee has scheduled a hearing for Tuesday, June 30 (10 a.m.) on tax policy in the sports industry.

The staff of the Joint Committee on Taxation has prepared a pamphlet describing "Present Law Relating to Selected Sports Industry Tax Issues."

Last Week (June 22-26)

Big picture: The week ended with some uncertainty in Congress after President Trump on June 24 canceled a signing ceremony at the Capitol for the 21st Century ROAD to Housing Act, saying he won't sign the bill until Congress passes the SAVE America Act voter ID bill. "Today's Housing News Conference and Signing is hereby cancelled until such time as we pass the desperately needed SAVE AMERICA ACT, which I consider to be a National Emergency," the President posted. The development took lawmakers and some White House staff by surprise. The President did not threaten to veto the housing bill, which passed with wide bipartisan margins in both chambers, and it will become law 10 days after it is sent to him by Congress whether he signs it or not. House leaders subsequently shelved plans to consider spending bills on the floor this week, which included a vote on the Energy and Water Development appropriations bill, as conservatives led by Rep. Anna Paulina Luna (R-FL) refused to vote for procedural rules allowing floor consideration of bills, saying the House should address the President's demand (even though the House has already passed the SAVE America Act and sent it to the Senate). This dynamic could also affect next week's House agenda.

Reconciliation: The President's ultimatum also focused additional attention on the reconciliation process, which House Speaker Mike Johnson (R-LA) said is "the only path, I think, to get that done," referring to the voter ID measure. President Trump in May advocated for attaching the voter ID bill to the housing measure, and subsequently, on June 10, called for the voter ID bill to be addressed in a third budget reconciliation package focused on defense funding. Bloomberg June 25 reported House Budget Committee Chairman Jodey Arrington (R-TX) as saying a new budget resolution to unlock the reconciliation process could be considered next week. The story cited Arrington as saying Republicans have been wrestling with offsets to pay for the defense-focused package, which could also include incentives for states to implement voter identification requirements, "all paid for by measures he said were aimed at combating fraud." In a June 23 Fox Business News interview, House Ways and Means Committee Chairman Jason Smith (R-MO) said, "I definitely support a third reconciliation bill. I've supported all the reconciliation bills. But I stand by the fact that we only have 30 legislative days between now and the election, 30 … So, it's going to make it more difficult." He also cited other business before Congress, including funding the government by the September 30 deadline.

Some House Republicans have been wary of voting on integrity provisions for federal programs that are envisioned as offsets for a 3.0 bill. Conservatives made clear they will insist that a third reconciliation bill is fully paid for. A June 24 Politico story, "House Republicans no closer to a deal on 'Reconciliation 3.0'," said of a Wednesday reconciliation meeting planned before the president's announcement, "Rep. Chip Roy of Texas, a key Budget Committee Republican, told reporters as he left the meeting that he would vote against any budget blueprint that is not fully paid for in current savings 'dollar for dollar' and 'year for year.' "

There is a noted enthusiasm gap between the House and Senate, where Republicans have been cool to plans for another bill and may want to avoid a pre-election "vote-a-rama" that could be wide-ranging for a broad bill. In a June 26 Punchbowl News report, "Thune: Reconciliation is last-ditch option," Senate Majority Leader John Thune (R-SD) said a 3.0 bill is a "last resort," the challenge is how to pay for it, "And that's mostly going to be under the Finance Committee's jurisdiction, which gets really sticky and thorny."

Cryptocurrency: In remarks to the Economic Club of New York June 23, Treasury Secretary Scott Bessent said the US should champion a financial system that rewards innovation and protects intellectual property, citing as an example the "new frontiers" in financial technologies. "Digital assets, stablecoins, tokenization, and new payment systems will help to shape the future of money," he said. "The United States should not consign itself to the sidelines while that future is built elsewhere." This point is often made about crypto legislation. Sec. Bessent spoke about cryptocurrency in relation to US competitiveness at the Senate Finance Committee earlier in June. Senator Steve Daines (R-MT) was cited by the Daily Tax Report June 23 as saying senators have "a framework put together" that he hopes could be marked up this year.

The Ways and Means Committee on June 9 held a hearing on cryptocurrency tax issues such as deferral of mining and staking rewards, i.e. whether rewards are taxed upon receipt under the argument that miners and stakers are getting paid for updating a ledger, or whether new digital assets are akin to self-created property like growing crops and should be taxed upon disposition. Rep. Mike Thompson (D-CA) said there may be an impasse between those who view rewards as income for a service and those who view them as self-created property. The Tax Clarity for Mining and Staking Act (H.R. 9175) by Rep. Mike Carey (R-OH) allows unlimited deferral, while Rep. Steven Horsford (D-NV) proposed to limit deferral to five years.

A June 23 Tax Notes story, "Sticking Points Emerge for House Crypto Tax Legislation," focused partly on this issue: "Some tax professionals view the inclusion of some kind of tax deferral in both versions of the legislation as a signal that it's close to certain. 'In itself, that's massive because it's reversing existing guidance,' Thomas M. Shea of EY said." The story noted, "the details of the staking and mining rewards provision could present a big hurdle to finding consensus."

Nominations: President Trump on June 23 sent to the Senate the nomination of James Gadwood, a tax controversy lawyer, to be Chief Counsel for the Internal Revenue Service. Treasury Assistant Secretary for Tax Policy Ken Kies had been Acting IRS Chief Counsel until last week, which was the maximum duration allowed under the Vacancies Reform Act following the withdrawal of the nomination of Donald Korb last year.

Punchbowl News reported, "Even if Gadwood isn't confirmed, his nomination does allow acting Chief Counsel Ken Kies to keep serving in the role." Of course, the proposed anti-weaponization fund, which the Administration has said it has backed away from, and the IRS immunity deal for the President's family and businesses reached by the Justice Department are creating friction between the parties and could be raised by Democrats during a confirmation process.

As Tax Notes reported, "The most recently confirmed IRS chief counsel was Marjorie Rollinson, who was confirmed in … 2024 after a three-year period of interim leaders of the office and who retired at the beginning of Trump's second administration. Since Rollinson's departure, the role cycled through a few acting appointments … "

DSTs: President Trump posted on social media June 26, "Numerous European Countries have been discussing the imminent implementation of a Digital Services Tax on American Companies. Some of these Countries are close to actually doing this. Please let this statement serve to represent that any Country that imposes such a Tax will immediately be met with a 100% TARIFF on any and all Goods sent to the United States of America. This TARIFF will supersede Trade Deals made with the Country, whether implemented, signed, or not. Additionally, the 100% TARIFF will be immediately imposed, if they proceed."

The Administration has been critical of DSTs generally, though the impetus for the President's post isn't entirely clear. The European Commission did release some preliminary views regarding Digital Markets Act (DMA) issues on June 25. U.S. Trade Representative (USTR) Jamieson Greer told the House Ways and Means Committee in April that Section 301 investigations in relation to DSTs are readied in draft form, but USTR wants to see outcomes rather than simply imposing tariffs.

Global tax: US and OECD officials, at a Washington, DC conference this week, offered various insights regarding digital taxation as well as Pillar Two. Rebecca Burch, US Treasury deputy assistant secretary for international tax affairs, repeated earlier statements that any discussion on taxing the digital economy must first consider underlying assumptions and basic principles. On the question of artificial intelligence (AI) in the digital taxation sphere, Burch was quoted as saying that, although it might be tempting to include AI in the policy discussion, it would be a mistake to do so at this time because it would bog down the dialogue on current issues.

Bill introductions: On June 24, Senator Ashley Moody (R-FL) introduced a bill (S. 4907) to increase the excise tax on investment income of private colleges and universities and provide greater funding to career and technical education.