The House Ways and Means Committee approved seven tax bills on July 1, deepening a divide between House and Senate taxwriters on the best approach to tax administration reform.
Two of the bills were approved largely along party lines:
- The Tax Exempt Hospital Transparency Act (H.R. 9504) would significantly expand the Form 990 reporting requirements for tax-exempt hospitals.
- The Taxpayer Workforce Modernization Act (H.R. 7972) would create a data scientist fellowship program at the IRS.
H.R. 9504 emerges out of heightened scrutiny tax-exempt hospitals have faced in recent years regarding whether they provide sufficient community benefits to justify tax-exempt status.
Democratic opposition could make enactment of those bills difficult. With few legislative vehicles expected to carry tax provisions, bipartisan proposals have a much better chance to survive the Senate.
The Ways and Means Committee passed five other bills with unanimous bipartisan support:
- The Protecting Taxpayers from Ghost Preparers Act (H.R. 9499) would expand the definition of a return for purposes of the Section 6226 preparer penalties to include administrative adjustment requests.
- The Tax Relief for Fraud Victims Act (H.R. 9500) would expand the ability of taxpayers to claim casualty deductions for losses involving fraud, deceit, or misrepresentation.
- The End Tax Penalties on American Hostages Act (H.R. 9496) would postpone tax deadlines for taxpayers held hostage or unlawfully detained abroad.
- The AI Tax Integrity Act of 2026 (H.R. 9501) would create an IRS pilot program to use AI to detect fraud.
- The Taxpayer Advocate Participation Act (H.R. 9498) would allow the National Taxpayer Advocate to file amicus briefs on specific types of issues in tax cases.
The legislation represents the latest in a string of bipartisan tax administration bills that have advanced in the House this year. The Ways and Means Committee previously approved 13 other tax bills that have since passed the House and await action in the Senate (see our related Alert: House Passes 8 Tax Administration Bills).
The overwhelming bipartisan support for many of the bills gives them a chance in the Senate, but Senate taxwriters are pushing an alternative approach. Senate Finance Chair Mike Crapo, R-Idaho, and Ranking Minority Member Ron Wyden, D-Ore., have released an updated version of their sweeping bipartisan tax administration bill, which shares provisions with some of the House bills. Crapo and Wyden would prefer to pass a comprehensive bill rather than use a piecemeal approach to passing individual bills in the Senate using unanimous consent.
Crapo recently scrapped plans to hold a markup on the Crapo-Wyden bill over fears that Democrats would offer amendments on the audit agreement reached with President Donald Trump.
BDO Insight
The bills passed by the Ways and Means Committee are generally taxpayer-favorable and could make it easier for taxpayers to address issues in some narrow circumstances. But the outlook for enactment is complicated by the tight legislative calendar, partisan atmosphere, and dueling approaches from the House and Senate. Taxpayers should be aware that there are many existing mechanisms to respond to IRS issues under current law. Businesses and investors can consider working with tax advisors to understand their options.
Please visit BDO’s Tax Risk Services page for more information on how BDO can help.