This Week (August 3-7)

Congress: The Senate is scheduled to be in session next week, then out for the August recess until September 14. The House is out until August 31.

There is a Senate vote scheduled for Monday, August 3, in relation to a continuing resolution (CR) to fund the government beyond the end of the current fiscal year on September 30 and into December. A highway bill extension may be attached. On another item with a September 30 deadline, Senate Agriculture Committee Chair John Boozman (R-AR) expects to hold a markup of the farm bill next week. Actions in relation to an FY2027 budget resolution with reconciliation instructions are unclear. There were some aspirations for a Senate Judiciary Committee meeting to vote on the nomination of Todd Blanche to be attorney general early in the week, to allow for a floor vote before the August recess, but recriminations between some GOP Senators and the President over the matter hadn't abated by midday Friday.

Hearings: The Senate Finance Committee has scheduled a hearing entitled, "Exploring Process Approaches for Addressing Social Security Solvency" for Wednesday, August 5, at 10 a.m. Witnesses are Marc Goldwein of the Committee for a Responsible Federal Budget, Nancy LeaMond of AARP, and Charles Blahous of George Mason University. Blahous was Executive Director of the Social Security commission that operated under President George W. Bush in 2001 and held other economic roles in that Administration.

The Finance Subcommittee on Health Care has scheduled a hearing, "Building a Resilient Health Care Future with Biotechnology," for Tuesday, August 4 at 10 a.m. Witnesses are Alan Palkowitz of the Indiana Biosciences Research Institute (IBRI), Kevin Outterson of Boston University, Vera Luther of Dartmouth Health, and Michelle Rozo of the National Security Commission on Emerging Biotechnology.

Last Week (July 27-31)

Big picture: A major tax administration bill was approved by the Senate Finance Committee this week even after being entwined with the previously proposed anti-weaponization fund, which the Administration backed away from, and the IRS immunity deal for the President's family and businesses reached by the Justice Department. The Taxpayer Assistance and Service (TAS) Act was unveiled in February, and the scheduling of a Finance markup was delayed by Democratic insistence on an amendment closing off the immunity deal. Then, Republican Senators John Cornyn (R-TX) and Thom Tillis (R-NC) called for the anti-weaponization fund to be more formally put to rest and the scope of the immunity deal clarified in exchange for their votes in favor of the nomination of Todd Blanche as attorney general in the Judiciary Committee. Negotiations with the Justice Department were expected to hold off any Republican votes for the Democratic amendment at the Finance Committee — in addition to Senators Cornyn and Tillis, Committee member Bill Cassidy (R-LA) has had some degree of conflict with the President — and that proved true even as the talks stalled and the Judiciary vote was postponed. The tensions between the Administration and GOP Senators coincided with President Trump's challenging Senate Majority Leader John Thune (R-SD) to provide the votes for the SAVE America Act voter ID and citizenship bill, elements of which are envisioned to be part of a reconciliation bill provided for under the House-passed FY2027 budget resolution. Leader Thune said he doesn't have the requisite votes to pass the budget, though there are efforts toward a Senate version with more expansive reconciliation instructions.

Tax administration: The TAS Act — which was approved 26-1 by the Finance Committee July 30, with Senator Elizabeth Warren (D-MA) as the lone 'no' vote — includes provisions intended to:

• Digitize more tax returns
• Expand online accounts
• Streamline Chief Counsel reviews of offers-in-compromise
• Allow the U.S. Tax Court to hear cases relating to refunds and otherwise clarify the court's authority and jurisdiction
• Establish new tax preparer penalties
• Provide new authorization for the Office of Appeals

Ranking Member Ron Wyden's (D-OR) amendment to the bill banning the IRS from entering into tax audit immunity agreements for a sitting president, their family, or related entities — nullifying the current agreement — and requiring Treasury to report to Congress about any such immunity agreements was defeated on a 13-14 party-line vote. Democrats offered and withdrew other amendments.

A Chairman's modification added in a bill (S. 5133) by Senators Chuck Grassley (R-IA) and Maggie Hassan (D-NH) to require information returns for some categories of income to be filed with the IRS by January 31 of the following calendar year, aligned with the date the statements are provided to recipients, to curb fraudulent returns using stolen identities. The modification also clarified and expanded the definition of electronic filing identification number (EFIN) and provided for establishment of an EFIN validation program, following a July 23 bill (S. 5111) on the issue from Senators Catherine Cortez Masto (D-NV) and Marsha Blackburn (R-TN). Senator Sheldon Whitehouse's (D-RI) Fairness in Foreign Filing Act (S. 5173) to create a standardized pre-assessment process for penalties for failing to file certain forms related to foreign businesses, trusts, and gifts was also reflected.

Outlook: House Ways and Means Committee members have put forward several narrower tax administration bills, and there is some expectation that a compromise package with the Senate could be reached and passed, possibly during the lame-duck session following the elections. The House proposals include:

• H.R. 2347, the Survivor Justice Tax Prevention Act
• H.R. 7971, the Taxpayer Experience Improvement Act
• H.R. 7959, the IRS Whistleblower Program Improvement Act
• H.R. 9496, the End Tax Penalties on American Hostages Act
• H.R. 9500, the Tax Relief for Fraud Victims Act
• H.R. 9498, the Taxpayer Advocate Participation Act
• H.R. 9501, the AI Tax Integrity Act
• H.R. 9499, the Protecting Taxpayers from Ghost Preparers Act
• H.R. 7972, the Taxpayer Workforce Modernization Act
• H.R. 6956, the Barcode Automation for Revenue Collection to Organize Disbursement and Enhance Efficiency Act
• H.R. 6506, the Taxpayer Due Process Enhancement Act
• H.R. 6495, the Taxpayer Notification and Privacy Act
• H.R. 5349, the Tax Court Improvement Act
• H.R. 5346, the Fair and Accountable IRS Reviews Act

Reconciliation: The FY2027 budget resolution approved by the House on July 22 included reconciliation instructions only to the Agriculture, Armed Services, Intelligence, and House Administration committees, for a $95 billion bill focused on defense funding and with some voter ID and farm aid provisions. The resolution wasn't taken up in the Senate this week, as Leader Thune indicated he doesn't have the requisite votes for the resolution — one issue is the voter ID provisions, which Senator Tillis opposes — and there has been some talk of expanding the instructions. "Republicans anticipate giving a number of Senate committees instructions for the bill, setting up a lengthy and politically painful process ahead of adoption despite pushes for urgency from the White House," Politico Inside Congress reported. Still, Leader Thune rebuffed assertions from President Trump and Senator Mike Lee (R-UT) that the chamber should stay in session through the August recess to pass the SAVE Act provisions, saying that without the requisite votes in place, doing so would be futile. "Show me how this ends," Leader Thune said Monday, adding that keeping the chamber "in endless quorum calls" over the recess would be of benefit to no one.

Nominations: The Senate July 30 passed 50-47 a resolution (S. Res. 817) approving nominations en bloc, including for four Treasury positions:

• Francis Brooke to be Deputy Secretary of the Treasury
• Erin Browne to be Under Secretary of the Treasury for International Affairs
• Sriprakash Kothari to be Assistant Secretary of the Treasury for Economic Policy
• George McMaster to be Assistant Secretary of the Treasury for Financial Markets

Bill introductions: On July 28, Finance Committee member Michael Bennet (D-CO) introduced four bills:

• S. 5141, to improve the notice and review procedure with respect to multi-year bans on claiming credits
• S. 5142, to improve the process for providing refunds to taxpayers
• S. 5143, to modify procedural requirements for penalties and disallowance periods
• S. 5144, to eliminate installment agreement fees for certain individuals

On July 30, Senator Dave McCormick (R-PA) introduced a bill (S. 5203) to modify rules relating to certain exempt facility bonds.

IRS: Proposed regulations (REG-115145-25) released July 31 relate to allocating foreign taxes of foreign corporations affected by the repeal of the one-month deferral election and to the disallowance of foreign tax credits on certain distributions of previously taxed earnings and profits.

There is also a new notice requesting comments on IRS Form 990 and other forms used by nonprofit organizations.