Here is a look at recent tax-related happenings on the Hill, including draft bills introduced on digital asset taxation.
Lately on the Hill
Secure America Act (Reconciliation 2.0) Signed Into Law
On June 10, 2026, President Donald Trump signed the Secure America Act, which provides approximately $70 billion in funding for Immigration and Customs Enforcement, Customs and Border Protection, and the Department of Homeland Security. The act is primarily focused on border security and immigration enforcement funding through fiscal year 2029.
Multiple Crypto Draft Bills Introduced in Legislative Hearing
The House Ways and Means Committee held a legislative hearing on June 9, 2026 to discuss digital asset taxation. According to the Joint Committee on Taxation, the hearing discussed six draft bills and one discussion draft all on digital asset taxation. The draft legislation is aimed at reducing paperwork and promoting tax compliance for the use of digital assets in everyday commerce, clarifying the rules for common digital asset transactions, and applying long-standing tax policies to digital assets. Led by Chair Jason Smith (R-MO), the push to enact bipartisan cryptocurrency seems to be top of mind.1 However, a top Democrat on the House tax writing panel, Richard Neal (D-MA), said, “I don’t see us doing a bipartisan bill before the election.”
In addition, Neal warned in his opening statement that “it appears there are some provisions that deviate substantially from general tax principles, providing a distinct advantage to digital assets above and beyond other investments.”2 Smith stated “digital asset taxation does not have to turn into a partisan fight”3 and emphasized that “America needs clear tax rules of the road to remain the crypto capital of the world.”4 The six bills and one discussion draft that were released have noted differences from the bipartisan bill (H.R. 8899) that was introduced on May 19, 2026 by Ways and Means Committee members Max Miller (R-OH) and Steven Horsford (D-NV).5 Differences include providing a de minimis reporting relief and also including an option for a voluntary disclosure program for prior reporting failures.
US, Mexico, Canada Might Not Renew Trade Deal
The United States-Mexico-Canada Agreement (USMCA) July 1 renewal deadline is approaching quickly.6 The three countries may not agree to extend the agreement for another 16 years. If no agreement is reached by July 1, the existing agreement will expire in 2036, with rolling annual reviews, unless one of the countries exits from the agreement. Sources familiar with the matter believe the U.S. will not formally renew the agreement, which will trigger negotiations. The U.S. has started separate bilateral talks with Canada and Mexico over trade; however, a formal renewal of the USMCA seems unlikely for this year.
The U.S. Trade Representative Jamieson Greer has commented, “I don’t think we’re going to renew it outright, but we’ll engage in the separate negotiations.” Despite being two of the largest U.S. trading partners and top buyers, Canada and Mexico have been hit with new tariffs on products such as auto and steel. The tariffs are a means to accomplish Trump’s goal of bringing automotive assembly and manufacturing jobs into the United States.
From the Courts
Federal Appeals Court Allows Enforcement of Section 122 Tariffs Pending Litigation
The Federal Circuit Court of Appeals, in State of Oregon v. Trump,7 granted the U.S. federal government’s motion to stay the decision of the U.S. Court of International Trade’s May ruling that the §122 tariffs were invalid. Thus, §122 tariffs can continue to be collected. The fact that the stay is granted indicated the Court of Appeals found sufficient evidence that the federal government would win on the merits of the case, i.e., that §122 tariffs are valid.
Capital Gains Tax Attributable to Partnership Item
The Court of Federal Claims in Seed v. United States8 granted a summary judgment against an individual taxpayer who sought a refund of capital gains tax, claiming it should have been excluded under Internal Revenue Code (IRC) §1202 as qualified small business stock.9 The court determined that the capital gain at issue was considered a partnership item under the Tax Equity and Fiscal Responsibility Act of 1982. For the 2016 tax year, IRC §7422(h) provided that “[n]o action may be brought for a refund attributable to partnership items”; with exceptions are not relevant in this case.10
Decision on 5% Safe Harbor for Wind & Solar Energy Credits
In Oregon Environmental Council v. IRS,11 the U.S. District Court for the District of Columbia issued a memorandum opinion vacating the IRS Notice 2025-42, which eliminated the 5% safe harbor method that established the beginning of construction (BOC) for wind and solar energy projects for eligibility in claiming IRC §45Y and §48E tax credits. The District Court determined that the notice did not satisfy the “hard look” review that was set by the U.S. Supreme Court in Motor Vehicle Manufacturers Association of US v. State Farm Mutual Automobile Insurance,12 which requires the court to look at whether the agency considered all relevant factors, explained its decision-making process, and avoided arbitrary or capricious outcomes in changing rules. Accordingly, the 5% safe harbor has been restored as a BOC method; however, the IRS is likely to appeal the decision. Read more about this decision and its effects in our FORsights™ article, “Clean Energy: Beginning of Construction Notice Vacated.”
Transfer of Assets in Newly Formed Family Limited Partnership Did Not Meet Bona Fide Sale Exception
On June 8, 2026, the U.S. Court of Appeals for the Fifth Circuit affirmed the Tax Court’s opinion in Estate of Fields v. Commissioner13 that ruled an estate failed to show that a transfer of assets to a limited partnership prior to the death of the taxpayer was for a nontax purpose, so the bona fide sale exception in IRC §2036(a) did not apply.
The issue before the court was whether the transfer of assets to the family limited partnership qualified for the bona fide sale exception under IRC §2036(a). The Tax Court determined these reasons were not supported by the objective evidence that showed, among other things, the timeline of events, the lack of discussion with the taxpayer prior to her health declining, and no significant changes to the assets prior to the transfers that would support a nontax reason.
H-1B Visa Application Fee Ruled Unlawful
A federal judge has ruled in State of California v. Mullin14 that the $100,000 H-1B visa application fee for employers that are sponsoring foreign workers ordered by Trump is an unlawful tax.15 The court agreed with the 20 states that sued to block the fee, challenging the administration’s legal authority to implement the fee. The fee was introduced in September 2025 to restrict reliance on foreign workers and increase the hiring of U.S. workers. The White House has indicated that it will appeal the decision.
From Treasury & the IRS
IRS to Create New Office for Tax Professionals
The IRS announced it will create a new office for tax professionals, merging together the Return Preparer Office and the Office of Professional Responsibility.16 The new office will be called the Tax Professional Management Office, will launch on June 28, 2026 and will be headed by Chris Pleffner, who is the current director of the Return Preparer Office. Opposition to the integration cites conflicts of interest between the two groups; however, the IRS said the offices will operate independently.
Treasury Previews Guidance for the Education Freedom Tax Credit
On June 10, 2026, the U.S. Department of the Treasury issued a press release previewing guidance for the implementation of the new federal scholarship tax credit under IRC §25F. The expected guidance will assist states, scholarship-granting organizations, taxpayers, and other stakeholders with launching the education freedom tax credit in January 2027 and provide clear rules for implementation, compliance, reporting, and program integrity. Treasury anticipates the release of the proposed regulations by the end of September.
Released Guidance
Guidance on Qualifying for Energy Community Bonus Credit
Treasury and the IRS released Notice 2026-39, which provides taxpayers with updated annual data for determining eligibility under the statistical area category or the coal closure category, described in §§3.03 and 3.04 of Notice 2023-39 for purposes of qualifying for energy community bonus credit amounts or rates under §§45, 45Y, 48, and 48E of the IRC. The notice does not provide information addressing the Brownfield Category and it does not apply for qualifying for the advanced energy project credit determined under IRC §48C.
State Tax Updates
Hawaii Budget Bill
Hawaii enacted H.B. 2329 on May 26, 2026, which updates the state’s fixed conformity date to the IRC in effect as of December 31, 2025. The legislation allows for decoupling from certain One Big Beautiful Bill provisions, including the full research and experimental expense in IRC §174A and the bonus depreciation for qualified production property in IRC §168(n).
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“Crypto Tax Bills Get First Look Before House Panel: BGOV Tax,” news.bloombergtax.com, June 9, 2026.
- 2“Neal Urges Caution on Digital Asset Bills,” taxnotes.com, June 9, 2026.
- 3“Top Democratic Tax Writer Skeptical of Pre-Midterm Crypto Action,” news.bloombergtax.com, June 9, 2026.
- 4“Digital Asset Bills Would Create Tax Framework, W&M Chair Says,” taxnotes.com, June 9, 2026.
- 5“Crypto Tax Proposals Prompt Questions From House Taxwriters,” taxnotes.com, June 10, 2026.
- 6“US, Mexico, Canada to Miss July USMCA Date, Ramping Up Tension,” news.bloombergtax.com, June 5, 2026.
- 7State of Oregon v. Trump, No. 26-1928 (Fed. Cir. June 11, 2026) (order granting stay pending appeal).
- 8Seed v. United States, No. 1:23-cv-01947 (Fed. Cl. 2026).
- 9“Refund Suit Over Capital Gain Barred by Partnership Item Rule,” taxnotes.com, June 11, 2026.
- 10Seed v. United States, No. 1:23-cv-01947 (Fed. Cl. 2026).
- 11Oregon Environmental Council v. IRS, No. CV-25-4400 (D.D.C. June 6, 2026).
- 12Motor Vehicle Manufacturers Association of the United States, Inc. v. State Farm Mutual Automobile Insurance Co., 463 U.S. 29 (1983).
- 13Estate of Fields v. Commissioner, No. 25-60403 (5th Cir. 2026).
- 14State of California v. Mullin, No. 25-13829-LTS, slip op. (D. Mass. June 8, 2026).
- 15“Trump’s $100,000 H-1B Visa Application Fee Rejected by Judge (1),” news.bloombergtax.com, June 8, 2026.
- 16“IRS to Create New Office for Tax Professionals Starting June 28,” news.bloombergtax.com, June 8, 2026.