Here is a look at recent tax-related happenings on the Hill, including the Senate passing bipartisan housing legislation.
Lately on the Hill
Budget Update
The Congressional Budget Office (CBO) estimates the federal budget deficit totaled $1 trillion in the first five months of fiscal year (FY) 2026, which is lower than the deficit recorded during the same period last fiscal year. CBO also notes that changes in tariff rates implemented in 2025 contributed to higher collections of customs duties early in FY 2026, with some collections ending late February 2026.
Congress’ FY 2026 Appropriations Status Table summarizes the status of FY 2026 funding measures, including the consolidated appropriations measure shown as enacted on February 3, 2026.
Senate Passes Bipartisan Housing Legislation
The Senate passed bipartisan housing legislation, H.R. 6644, the 21st Century ROAD to Housing Act, led by Senate Banking Committee Chairman Tim Scott (R-SC) and Sen. Elizabeth Warren (D-MA), in a vote of 89 to 10 on March 12, 2026. This bill includes the Community Investment and Prosperity Act, which raises the cap on how much banks can invest in community development projects, and the Housing Supply Expansion Act, which would update the federal definition of “manufactured housing” to include modular and prefabricated homes that are not built on a permanent steel frame. The bill aims to address housing affordability by reducing regulations to build homes and encouraging private investment in housing projects.1
Because the Senate passed H.R. 6644 with a substitute amendment, the bill’s next step is House consideration of the Senate-amended text. The House previously passed H.R. 6644 by a vote of 390 to 9, suggesting bipartisan interest, but the House will need to decide whether to advance the Senate’s revised package as is or otherwise resolve differences. The White House Office of Management and Budget issued a Statement of Administration Policy indicating the administration strongly supports the Senate amendment and that, if presented in its current form, the president’s advisors would recommend signing it into law. However, recent reporting indicates the president has also stated he would not sign other legislation until the SAVE America Act advances, which may factor into timing and floor strategy as House leaders consider next steps.2
Senator Questions USPS Postmarking Changes Ahead of Filing Deadlines
Senate Finance Committee Ranking Member Ron Wyden (D-OR) sent a letter to the U.S. Postal Service (USPS) seeking details on how the USPS’ recent postmarking rule changes and mail-network updates may affect time-sensitive mail, including tax returns. Wyden highlighted that federal tax law under Internal Revenue Code Section 7502 relies upon USPS postmarks to determine whether a return of payment is timely filed, and raised concerns that the Regional Transportation Optimization (RTO) under the Delivering for America (DFA) plan could delay when items are processed and postmarked, potentially increasing late-filing risk for taxpayers who mail documents close to a deadline. He asked USPS to clarify implementation status, public outreach efforts, and whether USPS consulted with the U.S. Department of the Treasury or the IRS regarding tax season impacts.
Section 301 Investigation Launched as Administration Leans on Alternative Tariff Authorities
U.S. Trade Representative (USTR) Jamieson Greer issued a notice initiating investigations under §301 of the Trade Act of 1974 targeting global “excess capacity” (USTR press release). Section 301 allows investigations into whether certain economies’ industrial practices contribute to “production capacity untethered from the incentives of domestic and global demand.”3 The USTR lists the economies subject to these investigations as: China, the European Union, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan, and India.
The USTR presents the issue as capacity released from demand, which could lead to overproduction, persistent trade surpluses, and underutilized capacity that can undercut U.S. production and investment across sectors. An illustrative list of potentially affected sectors includes steel, aluminum, automobiles, batteries, semiconductors, machinery, chemicals, and more. The notice itself does not impose tariffs or other related measures immediately; however, it starts the process of action with an investigative pathway that can result in tariffs or other appropriate measures after comment and consultation from the public. A public comment docket opens March 17, with comments and hearing requests due April 15 (11:59 p.m. ET); hearings begin May 5.
From the Courts
Costco Customer Lawsuit Seeks Share of Potential Tariff Refunds
A Costco Wholesale Corp. member filed a lawsuit alleging the retailer should reimburse customers who paid higher prices on products attributed to tariffs and require the company to return any related tariff refunds it may receive.4 The complaint is framed against the backdrop of the U.S. Supreme Court’s February decision concluding that the International Emergency Economic Powers Act (IEEPA) does not authorize the president to impose tariffs, which has contributed to a wave of tariff refund litigation and related disputes. More broadly, the suit highlights an issue that companies are evaluating across industries: whether tariff‑related refunds, if recovered, could create customer refund or credit claims under contractual terms, customary business practices, or implied promises.
IEEPA Tariff Refunds: CBP Provides Status Update on Planned Refund Process
In Atmus Filtration, Inc. v. United States, the U.S. Court of International Trade (CIT) directed U.S. Customs and Border Protection (CBP) to liquidate unliquidated entries without regard to IEEPA duties and to reliquidate liquidated entries for which liquidation is not final. The CBP subsequently submitted a status report describing a planned Automated Commercial Environment (ACE) capability, named Consolidated Administration and Processing of Entries (CAPE), intended to support refund processing.5 The CBP described CAPE as a four‑part workflow: (1) a web‑based claim portal for importers/brokers to upload entry lists, (2) mass processing to remove applicable IEEPA Chapter 99 HTS numbers and rerun duty calculations, (3) review and liquidation/reliquidation to update entries and calculate interest, and (4) a refund component to consolidate and issue electronic refunds.6 The CBP also noted CAPE is expected to be implemented in phases and that initial functionality may exclude certain entry types and entries with specific liquidation statuses. For more information, see our article, “Update on Supreme Court IEEPA Tariff Refund Process.”
Arguments Begin in First Appellate Test of H1-B Visa Fee
The U.S. Court of Appeals for the D.C. Circuit heard arguments from the U.S. Chamber of Commerce7 on whether the $100,000 H1-B visa charged on hiring petitions of specialty occupation workers from outside the U.S. is considered a tax, or falls under the presidential authority to limit outside entry into the United States.8 Arguments from the Chamber and other groups challenging the fee imposition were drawn from the recent U.S. Supreme Court decision ruling related to tariffs in Learning Resources, Inc. v. Trump in that the power to raise revenue is a power solely invested in Congress.9 The case is the first in which an appellate will evaluate the lawfulness of the imposed fee above the costs of administering the visa program on high-skilled immigration.
Challenge to Low-Value Import Tax Change Returns to Court
The CIT revived a challenge to President Donald Trump’s executive order to suspend the “de minimis” tariff exemption for low‑value imports (shipments valued at $800 or less).10 The order cites IEEPA, as well as the National Emergencies Act and section 604 of the Trade Act of 1974, among other authorities. The case had been stayed while the U.S. Supreme Court considered broader tariff authority questions; the CIT lifted the stay on March 5 and set a briefing schedule into April. The plaintiff, auto-parts distributor Detroit Axle, argues the executive branch lacks authority to nullify the de minimis exemption and says the change has materially increased tariffs on its imports.11
The reopened dispute could potentially pose significant financial stakes for online retailers, small businesses, and consumers who purchase goods from overseas. The dispute has broad implications for importers that rely on high‑volume, low‑value shipments (including online retail fulfillment models), because the court’s decision could affect whether these shipments remain subject to duties while the House and Senate consider other trade and tariff measures.
From Treasury & the IRS
Treasury Signals OB3 Implementation Priority as Green Book May Not Be Issued This Year
Assistant Treasury Secretary for Tax Policy Kenneth Kies indicated Treasury is unlikely to release a green book this year, noting the department’s focus remains on implementing the One Big Beautiful Bill Act (OB3) enacted last year.12 The green book is Treasury’s General Explanations of the Administration’s Revenue Proposals, which Treasury typically publishes alongside the president’s budget to provide technical explanations of the administration’s revenue proposals for the fiscal year.
Remittance Excise Tax Regulations Advance Through Office of Information & Regulatory Affairs Review
Proposed rules related to the excise tax on remittance transfers have passed the Office of Information and Regulatory Affairs (OIRA) review and are on track to being released by the IRS. If issued, the rules are expected to provide additional details on administration and compliance mechanics for remittance transfers subject to the excise tax.13
IRS Clarifies Commissioner Vacancy Following Expired Acting Tenure
The IRS issued a news release stating Treasury Secretary Scott Bessent’s service as acting IRS commissioner under the Federal Vacancies Reform Act has expired and that he has not served in that capacity since that time. The release further noted that the secretary of the Treasury continues to oversee Treasury offices and bureaus, and that the IRS continues to operate without interruption, with Chief Executive Officer Frank J. Bisignano leading day-to-day operations and reporting directly to the secretary.
Following earlier scrutiny over the acting tenure, Wyden, Senate Democratic Leader Chuck Schumer (D‑NY), and Warren issued a release regarding a letter they sent to Bessent and Dan Scavino, deputy chief of staff and director of the Office of Presidential Personnel.14 The senators raised oversight concerns regarding reliance on acting leadership in Senate-confirmed roles and the length of vacancies in key tax administration positions.
The IRS to Maintain Focus on Partnerships
Assistant Treasury Secretary for Tax Policy Kenneth Kies said the IRS will continue to investigate abusive partnership transactions, even as the administration moves to repeal certain reporting rules that were intended to increase visibility into related-party basis adjustment transactions.15 Kies said rollback of reporting rules does not mean the IRS will stop pursuing transactions that fail the economic substance doctrine, and that the agency will continue to focus on abusive partnership structures. Transactions involving related-party basis adjustments may cause concern if they are designed to create tax advantages without any real economic impact.
Released Guidance
Tax‑Exempt Refunding Bonds (proposed regulations): The IRS issued proposed regulations (REG-117298-21) updating arbitrage rules and definitions applicable to tax‑exempt and other tax‑advantaged bonds. The proposal would clarify the time and manner for requesting refunds of overpayment of rebate to the U.S. and revise related procedural rules, including the IRS address for filing defeasance notices.
From the States
Washington: Legislature Advances “Millionaire” Income Tax With Legal Challenge Likely
Washington lawmakers advanced legislation to establish a 9.9% tax on household income of at least $1 million, which would be first collected in 2029 on earnings from the prior year.16 The measure has been delivered to Gov. Bob Ferguson, who has said he will sign the revised version.17 The proposal is expected to draw legal scrutiny given longstanding Washington precedent treating a graduated income tax as inconsistent with the state constitution’s uniformity requirements for property taxes.
This newsletter features developing content that is subject to change at any time. It does not constitute legal or tax advice. Consult your professional advisors prior to acting on the information set forth herein.
- 1“U.S. Senate Passes Housing Affordability; House Consideration Next,” checkpoint.riag.com, March 13, 2026.
- 2“Trump’s on the ROAD to nowhere,” punchbowl.news, March 12, 2026.
- 3“New Investigation Advances Trump Tariff Replacement Campaign,” taxnotes.com, March 13, 2026.
- 4“Costco Member’s Lawsuit Says All Clients Are Owed Tariff Refunds,” news.bloombergtax.com, March 11, 2026.
- 5Atmus Filtration, Inc. v. United States, CIT, No. 26‑01259.
- 6“New details emerge on Trump tariff refunds,” thehill.com, March 12, 2026.
- 7Chamber of Commerce v. DHS, US Court of Appeals, D.C. Circuit, No. 25-05473.
- 8“DC Circuit Questions If Trump’s $100,000 H-1B Fee Is a Tax,” bloomberglaw.com, March 9, 2026.
- 9Learning Resources, Inc. v. Trump, US Supreme Court, No. 24-128.
- 10“Legal Fight Reopens Over Trump’s Push to Tax Low-Value Imports,” news.bloombergtax.com, March 9, 2026.
- 11Axle of Dearborn, Inc. v. Department of Commerce, CIT, No. 25-00091.
- 12“Odds of New Green Book Slim as Treasury Focuses on OBBBA,” taxnotes.com, March 11, 2026.
- 13“Rules on Cross-Border Remittances Clear White House Review,” bloomberglaw.com, March 10, 2026.
- 14“Senate Dems Call for Answers on IRS Commissioner Vacancy,” taxnotes.com, March 9, 2026.
- 15“Partnerships Still IRS Target Despite Trump Rollbacks, Kies Says,” bloomberglaw.com, March 10, 2026.
- 16“Washington Data Center, Estate Tax Bills Head to Governor (1),” news.bloomberglaw.com, March 13, 2026.
- 17“Millionaire Tax Advances in Washington State as Legal Duel Looms,” news.bloombergtax.com, March 11, 2026.