Summary
- Senate Finance Committee schedules Thursday vote on nominations, including IRS Chief Counsel and Tax Court Judge, after holding hearing last week.
- House passes Lindsey O. Graham Sanctioning Russia and Iran Act.
- Second Circuit affirms Tax Court in Soroban Capital Partners.
- House Ways & Means Committee votes to approve Digital Asset Tax Certainty Act and EFIN Verification Act.
- Senate Finance Committee reports TAS Act.
Senate Finance Committee Schedules Vote on IRS Chief Counsel and Tax Court Judge
On September 15, the Senate Finance Committee held a hearing on several nominations, including Jim Gadwood to be Chief Counsel of the IRS, and Andrew De Mello to a Judge of the Tax Court. The Committee has scheduled a meeting to vote on the nominees for September 24, but a vote by the full Senate is not expected before the Senate returns in November.
House Passes Lindsey O. Graham Sanctioning Russia and Iran Act
On September 16, the House passed the Lindsey O. Graham Sanctioning Russia and Iran Act (H.R. 5334) by a vote of 262-159. The bill had been introduced by Rep. Panetta (D-CA) as the Supporting Early-Childhood Educators’ Deductions (SEED) Act of 2026. The sanctions portion of the bill includes revenue provisions and thus would have been blue-slipped in the House had the Senate passed its own bill originating in the Senate containing revenue measures in violation of the Constitution’s origination clause. To avoid the blue-slip issue, the Senate took up the SEED Act and added the sanctions provisions to the House-passed bill. The tax provision would amend section 62 of the Internal Revenue Code to expand the definition of educators eligible for the above-the-line tax deduction for classroom expenses of up to $350 to include early childhood teachers and aides. The SEED Act originally passed the House by voice vote April 27. The Senate passed the bill on August 7 by a vote of 86-11.
Second Circuit Affirms Tax Court in Soroban Capital Partners
On September 17, the Second Circuit unanimously affirmed the Tax Court decision in Soroban Capital Partners LP v. Commissioner. The three-judge panel held that the limited partner exception to self-employment tax in section 1402(a)(13) of the Internal Revenue Code applies only to a partner that does not run, manage, or control the partnership’s business. Applying that standard, the panel affirmed the Tax Court’s holding that Soroban’s principals were not “limited partners” under section 1402(a)(13) and thus their income from the partnership was subject to self-employment tax. Please see more in this S&C Tax Policy Memo.
House Ways & Means Committee Votes to Approve Digital Asset Tax Certainty Act and EFIN Verification Act
On September 16, the House Ways & Means Committee held a mark-up of seven bills, including two tax bills: H.R. 10357, the Digital Asset Tax Certainty Act, and H.R. 10334, the EFIN Verification Act of 2026 (both bills were described in S&C’s September 16 Tax Policy Memo). The Committee voted to favorably report H.R. 10357, as amended by Chairman Smith’s Amendment in the Nature of a Substitute, by a vote of 38-5, with Reps. Doggett (D-TX), Chu (D-CA), Moore (D-WI), Beyer (D-VA), and Evans (D-PA) opposing the bill. The Committee voted to favorably report H.R. 10334, as amended by Chairman Smith’s Amendment in the Nature of a Substitute, by a vote of 40-0.
Senate Finance Committee Reports TAS Act
On September 17, the Senate Finance Committee reported S. 5441, the Taxpayer Assistance Act, which the Committee voted to favorably report on July 30, by a vote of 26-1 (as previously described in this S&C Tax Policy Memo).