Here is a look at recent tax-related happenings on the Hill, including the U.S. Department of Justice (DOJ) creating a new National Fraud Enforcement Division.
Lately on the Hill
Tax Priorities Re-Emerge in Second Reconciliation Talks
Republicans considering a second reconciliation bill focused on funding the U.S. Department of Homeland Security, U.S. Customs and Border Protection, and U.S. Immigration and Customs Enforcement are also facing pressure from tax writers who seek the opportunity to address additional tax policy.1 Although skepticism remains about whether any tax-related provisions will be included, that uncertainty has not stopped Republican tax writers from positioning themselves to pursue additional tax priorities if the bill’s scope expands. Some of the ideas under discussion range from partisan items that did not make it into last year’s law to bipartisan priorities that could resurface later in an extenders package or broader tax discussion.
Department of Justice Restructures Criminal Tax Enforcement
The DOJ is reshaping tax enforcement once again by creating a new National Fraud Enforcement Division, which will move the criminal tax section from the Tax Division disbanded last year into the new division.2 The change follows a year of broader restructuring in federal tax prosecutions, including the breakup of the Justice Department’s Tax Division and the reassignment of tax functions between criminal and civil components. On April 7, Acting Attorney General Todd Blanche released a memo describing the new division as focused on fraud involving taxpayer dollars and taxpayer-funded programs, raising questions about whether the DOJ will preserve the breadth of prior tax enforcement efforts or narrow its focus to more traditional fraud cases.
Senate Finance Sets Hearing on IRS Funding & Filing Season
Senate Finance Committee Chair Mike Crapo (R-ID) announced that the committee will hold a hearing on April 15 titled, “IRS 2026 Filing Season and IRS Operations.” Frank J. Bisignano, chief executive officer of the IRS, is scheduled to testify, prompting another congressional review of IRS funding and filing-season performance.
Congress Signals No Immediate Expansion of SALT Cap
Rep. Nicole Malliotakis (R-NY) said efforts to further expand the state and local tax (SALT) deduction likely will not move forward before the current enhanced cap expires.3 Malliotakis was among the lawmakers who helped secure the current $40,000 cap for five years in the 2025 law, and some New York lawmakers are now trying to preserve that higher threshold before it reverts to $10,000. Malliotakis indicated that any future SALT discussions would be more likely to be considered alongside a broader group of provisions scheduled to sunset in four to five years, rather than as part of the next narrowly focused reconciliation package. Despite renewed interest from some lawmakers in high-tax states, Congress may defer additional SALT changes unless and until a longer round of expiring tax provisions is back on the table.
Tariff Refund Tool Set to Launch April 20
U.S. Customs and Border Protection said it will launch the first phase of its Consolidated Administration and Processing of Entries (CAPE) tool on April 20, 2026, through the Automated Commercial Environment Secure Data Portal (ACE Portal). The agency said CAPE is intended to simplify International Emergency Economic Powers Act (IEEPA) duty refund claims by providing an electronic pathway to submit valid claims and by consolidating refunds, including interest, rather than processing entry by entry. Phase 1 requests will be submitted through the ACE Portal by uploading a CAPE Declaration, and only the importer of record (IOR) for the listed entries or the authorized customs broker that filed the entries on behalf of the IOR may submit the declaration. The agency also noted that filers cannot use the Automated Broker Interface (ABI) for these claims. Phase 1 generally covers most entries that are unliquidated or up to 80 days past liquidation, as well as entries with liquidation status of suspended, extended, or under review, plus warehouse and warehouse withdrawal entries.
Lead IEEPA Refund Case Shifts After Atmus Dismissal (Atmus Filtration, Inc. v. United States)
After Atmus Filtration, Inc. v. United States4 was dismissed, the U.S. Court of International Trade lifted the stay in Euro-Notions Florida, Inc. v. U.S. Customs and Border Protection5 and effectively made it the new lead case for IEEPA tariff refund litigation. Subsequent court orders in Euro-Notions Florida mirrored the operative relief that had been in place in Atmus, allowing the refund process to continue the same basic terms while shifting the operative docket. The change also appears to extend the government’s deadline to appeal, which now runs to June 8, 2026, based on the April 7 order in the new lead case.
From the Courts
High Court Leaves Oklahoma Tribal Tax Ruling in Place (Stroble v. Oklahoma Tax Commission)
The U.S. Supreme Court declined to hear Stroble v. Oklahoma Tax Commission,6 leaving in place the Oklahoma Supreme Court’s ruling that denied an income tax exemption to a Muscogee Creek Nation citizen who lived and worked within the reservation. The petition asked whether Oklahoma may tax the income of a tribal citizen who lives and works within a reservation recognized as Indian country under McGirt v. Oklahoma,7 after the Oklahoma Supreme Court held that McGirt was limited to criminal jurisdiction under the Major Crimes Act and did not extend to the state’s taxing jurisdiction.
Varian Decision Narrows DRD & Related Credit Benefits (Varian Medical Systems Inc. v. Commissioner)
In Varian Medical Systems Inc. v. Commissioner, the U.S. Tax Court sided with the IRS on computational issues tied to a 2024 opinion involving Varian’s claimed Section 245A dividends received deduction and related foreign tax credit consequences.8 The court ruled that some of Varian’s claimed dividend deductions had to be disallowed because the company did not directly hold shares of the controlled foreign corporations generating the dividends, underscoring how indirect ownership structures can limit access to the full deduction and related tax benefits.9
From Treasury & the IRS
IRS Expands Business Tax Account Access
The IRS announced that it is expanding its Business Tax Account online self-service platform to partnerships; federal, state, and local governments; Indian tribal governments; and tax-exempt organizations. The platform allows eligible users and designated officials to view tax balances, make payments, access payment history, download select notices, view eligible transcripts, request a tax compliance check, and verify the business name and address on file with the IRS. Previously, access to the platform was only available to sole proprietors, S corporations, and C corporations. The expansion continues the IRS’ broader push to move more routine taxpayer functions online.
IRS Taxpayer Assistance Center Saturday Hours Updated
The IRS announced special Saturday hours at Taxpayer Assistance Centers nationwide on April 11 and April 25 from 9 a.m. to 4 p.m. The IRS also said more than 200 centers continue to offer extended weekday hours through April 30.
Released Guidance
No Tax on Tips final regulations: Final regulations (TD 10044) were issued identifying occupations that customarily and regularly receive tips and clarifying what constitutes “qualified tips” for purposes of the One Big Beautiful Bill Act (OB3) deduction. The IRS release says the final rules cover more than 70 occupations, clarify that qualified tips must generally be paid in cash or a cash equivalent and be voluntary, and add visual artists, floral designers, and gas pump attendants to the list. The final regulations also confirm that qualifying tips may include checks, gift cards, casino chips, and foreign currency, while digital assets and other noncash items do not qualify.
Remittance transfer tax proposed regulations: Proposed regulations (REG-114499-25) outline rules and definitions for the new 1% excise tax on certain remittance transfers established under the OB3. The proposal clarifies the amount subject to tax, the scope of physical instruments that trigger the tax, and examples illustrating how the rules apply. The IRS release states that the tax applies beginning January 1, 2026 and that remittance transfer providers will report the tax on Form 720, Quarterly Federal Excise Tax Return, with comments on the proposed regulations due by June 12, 2026.
Foreign housing exclusion amounts for 2026: Notice 2026-25 updates the section 911 limitation on housing expenses for specified foreign locations for 2026, reflecting geographic differences in housing costs relative to the United States. The Notice also allows qualified individuals in some locations to apply the 2026 adjusted housing limitations to the 2025 taxable year if the 2026 amount is higher than the 2025 limitation for that location.
QOZ nomination guidance: Revenue Procedure 2026-14 outlines the process for states, territories, and the District of Columbia to nominate eligible census tracts as qualified opportunity zones (QOZ) effective January 1, 2027 under the OB3. The guidance also identifies eligible low-income community census tracts, including those comprised entirely of a rural area, and the IRS release states that the nomination period begins July 1, 2026, runs for 90 days subject to a single 30-day extension, and will be supported by an electronic nomination tool and related online resources. The IRS also said the guidance identifies 25,332 eligible low-income community census tracts, including 8,334 rural tracts, and that states generally may designate no more than 25% of their eligible tracts as QOZs.
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“Taxwriters Eye Wish List for Possible Reconciliation 2.0,” taxnotes.com, April 9, 2026.
- 2“Justice Department Makes More Tax Enforcement Changes,” taxnotes.com, April 9, 2026.
- 3“SALT Expansion Talks to Wait Until Expiration, Malliotakis Says,” news.bloombergtax.com, April 9, 2026.
- 4Atmus Filtration, Inc. v. United States, Ct. No. 26‑01259.
- 5Euro‑Notions Florida, Inc. v. U.S. Customs and Border Protection, et al., Ct. No. 25‑00595.
- 6Stroble v. Oklahoma Tax Commission, 2025 OK 48, No. 120,806 (Okla. July 1, 2025), cert. denied, No. 25-382 (U.S. Apr. 6, 2026).
- 7McGirt v. Oklahoma, 591 U.S. 894 (2020).
- 8“Tax Court Backs IRS on Varian DRD and Tax Credit Computations,” taxnotes.com, April 9, 2026.
- 9“Varian’s Indirect Ownership Sinks Full Dividend Deduction,” news.bloombergtax.com, April 8, 2026.