Republicans continue to develop a strategy as to the timing and contents of a reconciliation bill to address Department of Homeland Security (DHS) funding, supplemental defense funding, voting eligibility legislation, and other non-tax priorities. It is unclear at this point whether tax will play a role in any reconciliation exercise, but we may have an answer to that soon, as the underlying budget resolution will need to specifically provide instructions to the taxwriting committees for a tax title to be included. While we await that decision, speculation runs rampant as to a tax wish list if a tax title is included.

Deficit concerns will likely limit the scope of any potential tax relief, but Republicans have a wide variety of proposals to consider, including proposals that were ultimately not included in the One Big Beautiful Bill Act (OBBBA) (such as increasing the section 199A pass-through deduction rate to 23 percent and further expansion of health savings accounts (HSAs)), reversing the OBBBA limitation on the deduction of gambling losses, and a host of bipartisan proposals (tax extenders, tax administration proposals, digital asset taxation legislation, U.S.-Taiwan treaty-type relief, and retirement savings legislation).

However, a tax title provides greater risk of tax increases than opportunities for tax relief, given the likely need to fund the non-tax components of a potential reconciliation bill. Securing support for tax increases will be challenging in an election year, but Republicans could look at a number of proposals considered for the OBBBA as potential sources of revenue, including an increase to the stock buyback excise tax, a limitation on the deductibility of business state and local taxes, and a new excise tax on third party litigation financing. In addition, Republicans will probably look to address potential "fraud, waste, and abuse," which may include reforms to the earned income tax credit, the low-income housing tax credit, and other means-tested credits in the tax code.

President Trump's demand for a reconciliation bill by June 1, combined with narrow Republican margins in the House and Senate and the vagaries of the reconciliation process, may prevent the inclusion of a tax title as Republicans put forth a narrow bill focused on DHS funding and other non-tax priorities, particularly if there is not an effort to pay for the bill. This seems to be the preferred path in the Senate, whereas House Committee on Ways and Means Chairman Jason Smith (R-MO) has been insisting that a tax title be included in any reconciliation bill. If a tax title does in fact emerge, the wish list for tax relief items will only grow, which may increase the risk of tax increases. #TaxTake

Upcoming Speaking Engagements 

Rocco will speak at the 26th Annual U.S. and Europe Tax Practice Trends conference on April 16. 

Layla, Rocco, George Hani, Lisandra Ortiz, and Jeff Tebbs will speak at the American Petroleum Institute (API) Federal Tax Forum on April 21-22.

Marc will speak at the American Staffing Association (ASA) Staffing Law and Compliance conference on May 8.

Mike, Jim Gadwood, Sam Lapin, Katherine Chace, and Tyler Jackson will speak at the American Bar Association's (ABA) 2026 May Tax Meeting on May 7-9.

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