Here is a look at recent tax-related happenings on the Hill, including the House passing a bipartisan bill aiming to strengthen taxpayer protections in disputes with the IRS.
Lately on the Hill
Lawmakers Advance Framework for Digital Asset Taxation
House Ways and Means Committee members Steven Horsford (D-NV) and Max Miller (R-OH) have introduced bipartisan legislation aimed at clarifying the tax treatment of digital assets as Congress continues its focus on regulating the crypto environment.
The proposed Digital Asset Protection, Accountability, Regulation, Innovation, Taxation, and Yields (PARITY) Act establishes rules for stablecoins, charitable contributions, lending transactions, and activity by foreign investors, while also applying wash sale rules and providing a temporary deferral for staking and mining rewards. A central feature of the bill is a deemed-basis rule for certain stablecoins designed to facilitate their use in everyday transactions by reducing the reporting and tax treatment burdens.1
The legislation was developed after months of discussion and a recent bipartisan roundtable, reflecting an effort to create clearer and more consistent tax rules that bring digital assets within traditional financial structures. However, the proposal does not include a de minimis exemption for small transactions; rather, it directs the U.S. Department of the Treasury to study the issue and recommend solutions.
While lawmakers have expressed interest in advancing digital asset legislation and the bipartisan nature of the effort bodes well for eventual enactment, final passage remains uncertain and may depend on broader legislative timing and post-election dynamics.
House Passes Bipartisan Tax Court Reform Bill
The House has passed the bipartisan Taxpayer Due Process Enhancement Act, aimed at bolstering taxpayer protections in disputes with the IRS by modifying procedures for collection due process (CDP) cases in the U.S. Tax Court.
Introduced by House Ways and Means Committee members Nathaniel Moran (R-TX) and Terri Sewell (D-AL), the bill would suspend the statute of limitations for refund claims during CDP proceedings, prevent the IRS from applying overpayments to disputed liabilities, and expand the Tax Court’s jurisdiction to review underlying tax liabilities.2
The legislation passed the House by voice vote with bipartisan support and builds on a broader push for tax administration reforms, but its ultimate enactment remains uncertain as it must advance through the Senate amid competing legislative priorities.
EU Moves to Finalize U.S. Trade Deal Before July 4 Deadline
The European Union (EU) has moved to finalize and begin implementing a delayed trade agreement with the U.S. as President Donald Trump’s Independence Day deadline approaches with the threat of additional tariffs.
The deal, originally made nearly one year ago, would eliminate EU tariffs on U.S. industrial goods while capping U.S. tariffs on most EU exports at 15%; however, disagreements have delayed implementation. Recent negotiations resolved key disputes among EU members, including adjustments to expiration terms and enforcement mechanisms allowing the trade bloc to suspend the agreement if the U.S. fails to meet its commitments. The push to finalize the agreement reflects mounting pressure to avoid a new escalation between the trading partners, particularly as the U.S. has threatened to raise tariffs on European automobiles to 25%.3
From the Courts
IRS Memo Signals Continued Fight Over Billions in COVID-Era Tax Refunds
The IRS recently issued an Action on Decision reaffirming its disagreement with court rulings that interpret COVID-19 era disaster relief as broadly extending tax deadlines, signaling the agency’s intent to continue litigating the issue.
At issue is whether taxpayer disaster relief automatically suspended tax filing and payment deadlines for the full duration of the COVID-19 pandemic, with courts in Abdo4 and Kwong5 adopting that interpretation, potentially putting billions of dollars in penalty and interest refund claims in play. In the memo, the IRS rejected the Tax Court’s reasoning in Abdo while maintaining that any postponement should be limited to a 60-day period, rather than extending through the pandemic period.
For taxpayers, this ongoing dispute creates both opportunity and uncertainty, as those who paid penalties or interest during the pandemic may consider filing refund claims, but ultimate eligibility will depend on how appellate courts resolve the scope of relief.
From Treasury & the IRS
IRS to Home-In on QSBS Maximizing Strategies
Treasury officials have signaled increased scrutiny of “stacking,” a strategy used to expand the qualified small business stock (QSBS) exclusion under Internal Revenue Code (IRC) Section 1202, by spreading ownership across multiple taxpayers, often through trusts, so each can claim a separate gain exclusion. Recent comments from Treasury Assistant Secretary for Tax Policy Kenneth Kies indicate that regulators view certain stacking arrangements as abusive and are considering guidance or regulations to limit the practice, particularly where complex trust structures are used to significantly multiply the available exclusion.6
Released Guidance
Partnership Information Reporting: Final regulations (T.D. 10048) modify reporting requirements for sales or exchanges of partnership interests under IRC §751(a), primarily by removing the requirement for partnerships to furnish certain detailed information formerly required under §1.6050K-1(c)(2). The final rules clarify that partnerships need only to provide certain information included in Form 8308 to transferors and transferees by the applicable deadline. The final regulations adopt the proposed regulations without change and are intended to address practical timing challenges by effectively delaying when certain detailed information must be provided, thereby easing compliance burdens without altering the underlying filing requirements.
Nonbank Trustee: Notice 2026-32 provides that carrying broker-dealers may rely on compliance with SEC rules as an alternative method for satisfying the nonbank trustee requirements under §1.408-2(e). It also outlines procedures for applying and implementing this alternative approach and requests comments on its administration.
Qualified Long-Term Care Distributions: Notice 2026-33 provides guidance on qualified long-term care distributions under IRC §401(a)(39) as permitted under the SECURE 2.0 Act of 2022, including rules for issuers, plan administrators, and individuals, relating to disclosure, reporting, and documentation requirements such as long-term care premium statements.
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“Bipartisan Crypto Tax Bill Introduced After Months of Discussion,” taxnotes.com, May 20, 2026.
- 2“House Advances Bipartisan Tax Court Due Process Reform Bill,” taxnotes.com, May 20, 2026.
- 3“EU Expedites Start of US Trade Deal in Bow to Trump Demand,” news.bloombergtax.com, May 20, 2026.
- 4Abdo v. Commissioner, 162 T.C. No. 7 (2024).
- 5Kwong v. United States, 179 Fed. Cl. 382 (2025).
- 6“Popular Silicon Valley Tax Strategy Gets Warning From Treasury,” news.bloombergtax.com, May 20, 2026.