As midterms approach, the timeline for tax legislation in this Congress becomes more compressed. This week brought bad news for two of the most plausible tax packages currently in play—and lower odds of major substantive tax action in 2026.
The striking point is that distinct pressures are stalling legislative action on both a partisan and bipartisan basis. Reconciliation 3.0 faces a dearth of enthusiasm among Senate Republicans, while the Taxpayer Assistance and Service Act, introduced by Senate Finance Chair Mike Crapo and Ranking Member Ron Wyden, also appears stuck. Reportage and commentary, below the fold.
For Reconciliation 3.0, Politico reports tensions over pay-fors to increase military spending. These pay-fors might take the form of healthcare cuts, a sensitive issue before midterms. By contrast, the bipartisan Taxpayer Assistance and Service Act has been delayed by controversy over President Trump’s IRS audit-immunity settlement.
While Congress’s tax agenda slows, the Executive Branch continues to reshape tax law through executive action and staffing decisions, as well as the long tail of One Big Beautiful Bill Act implementation. If both a third reconciliation bill and the bipartisan tax-administration package remain stalled, Congress may effectively cede more control over the tax system to the Executive Branch.
Jordain Carney & Katherine Tully-McManus, Senate Republicans in No Hurry to Deliver Trump’s Next Reconciliation Bill, Politico (June 17, 2026):
Sen. John Cornyn (R-Texas) [who recently lost his primary to Trump-endorsed Ken Paxton] said a third [reconciliation] bill “doesn’t look to me like it’s got a lot of life in it,” while Sen. John Kennedy (R-La.) separately warned that if his party was going to pass a third reconciliation bill, Republicans need to “saddle up and ride hard, because we’re running out of time.”
Bernie Becker, Settlement Controversy Ensnares Tax Administration Legislation, Politico Weekly Tax (June 15, 2026):
Here’s what happened: Democrats on the Finance Committee pushed for a vote during the markup of the tax administration legislation [the Taxpayer Assistance and Service Act] that would have blocked the personal tax immunity that Trump and his associates received after the president dropped his lawsuit against the IRS, according to Senate aides familiar with the matter.
The committee’s Republicans decided instead to hold off on the markup . . . .
Chris Cioffi, Trump Audit Immunity Delays Action on Tax Administration Fixes, Bloomberg Tax (June 16, 2026):
Wyden, who has also been critical of the settlement’s terms, declined comment on whether a delayed markup would imperil the [bipartisan tax administration] legislation. He indicated, however, that he was still bullish on getting it over the finish line.
Related TaxProf Blog coverage:
- NY Times: Inside The Deal To Drop Trump’s $10 Billion Suit Against The I.R.S. (June 3, 2026)
- Reports: Trump To Drop Anti-Weaponization Fund Plans (June 2, 2026)
- Additional “Trump Fund” Developments (June 1, 2026)
- Bloomberg: Democrats’ 100% Tax Plan On Fund Payouts Zeroes In On GOP Angst (May 25, 2026)
- WSJ: Trump’s Deal With His Administration Also Ends His Tax Audits (May 22, 2026)
- Trump v. IRS Dismissed (May 20, 2026)
- NY Times: Justice Dept. Officials Consider Settling Trump Suit Against I.R.S. (May 13, 2026)
- Amici Appointed In Trump v. IRS (May 6, 2026)
- Reconciliation 2.0, Meet The Smaller IRS (Apr. 18, 2026)
- NY Times: Justice Dept. Struggles To Respond To Trump’s Suit Against I.R.S. (Apr. 1, 2026)
- Trump IRS Lawsuit Puts Him On Both Sides Of The Case (Feb. 3, 2026)
