How Tax Administration Reforms Could Pass Congress This Year

Lawmakers in both chambers of Congress are taking a closer look at a range of bipartisan IRS administration changes.

House tax writers have advanced several pieces of legislation that would fix problems identified by taxpayer advocates and tax professionals. Some have become law.

Senate Finance Committee lawmakers, meanwhile, recently introduced a large package that includes dozens of provisions, such as those to digitize more paper returns, provide more online information about refunds, and enhance standards for tax return preparers.

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The interest in tax administration suggests there’s a willingness among tax writers to try to take action—the key question is how. The two chambers’ different approaches show an emerging disagreement over strategy.

On this episode of Talking Tax, host David Schultz talks to Bloomberg Tax reporter Chris Cioffi about how a tax administration legislation has been taking shape, as well as the path forward in Congress.

Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

This transcript was produced by Bloomberg Law Automation.

David Schultz:

From Washington, I’m David Schultz, and this is Talking Tax.

So we’re in the homestretch of this year’s tax filing season, but today we’re going to be talking about legislation moving on Capitol Hill that could change the way next year’s season plays out. Lawmakers up there are considering a bunch of measures that wouldn’t change how much you pay in taxes, but could change how you interact with the IRS—not jut during filing season but beyond[DS1.1]. Some of them are relatively minor, and some of them are not so minor. But the big question is what method Congress will use to get these through the two chambers and to the president’s desk.

Today we’re going to get into that with Bloomberg tax reporter Chris Cioffi. In a bit, he’ll talk about why it matters whether Congress passes these tax administration measures as they’re known, one at a time or all at once. But first he tells us exactly what types of changes Congress is considering.

Chris Cioffi:

Over the past couple of years, tax professionals and taxpayer advocates have highlighted issues with tax administration. And what I mean by that is making sure that people have the resources that they need to get their tax filings across the finish line. Last year, we saw Senate Finance Committee Chair Mike Crapo and ranking member Ron Wyden put out a discussion draft and summary that has dozens of fixes to long running tax administration issues, which include everything from strengthening the IRS whistleblower program to clarifying and expanding the US tax court’s jurisdiction. But also things like reining in some unscrupulous tax preparers by giving the IRS authority to set minimum standards for those paid preparers. And it’s something that the IRS had been doing in 2014. Courts ruled the agency doesn’t have the authority to do it. And so members of Congress have been trying to think of ways to give the IRS the ability to oversee minimum standards for paid preparers, but do it in a way that is not seen as problematic by some who have concerns over giving the IRS more power.

David Schultz:

So it sounds like it’s basically, you know, when we talk about tax administration, we’re not talking about how much you pay. We’re talking about how you file. Right.

Chris Cioffi:

Not only how you file, but improving the taxpayer experience and making other changes to simplify filing that have been long recommended by the Taxpayer Advocate Service.

David Schultz:

Yeah. So tell me about this legislation. You know, it sounds like it’s still in very early stages in the Senate, but it’s progressing, which is notable in 2026, whenever anything progresses in Congress these days. So where are we at and what would this legislative package do?

Chris Cioffi:

Right. And this is a good time to sort of talk about the disagreement over strategy between the House and the Senate on how to enact these bipartisan IRS administration fixes[DS2.1]. Finance Committee Chair Mike Crapo and Ranking Member Ron Wyden, they had this discussion draft from 2025 in January. Recently we saw them put out a draft bill. So we’ve gone from the discussion draft, got feedback, now they put out a bill. And it’s this big package. But the House, on the other hand, has taken a more one-off approach where they’ll pick up a few bills here and there that are in the package in some cases. And through my reporting, one of the things I found was that part of this premise behind the package is that there’s many things for everyone to like and a few things that people will have to swallow.

David Schultz:

Okay. Well, let’s talk about one of those things that some members will have to swallow if this does become law, which is standards for tax preparers. It seems like this is one of the more controversial things in the package. Tell me about what this is and why it’s controversial.

Chris Cioffi:

Yeah. So whenever you give IRS more authority to enforce pieces of tax law, there are some who are going to have concerns over giving IRS that authority. And in the case of this package, one of those pieces is this minimum standards for paid tax return preparers. Many are in support of it. I’ve talked to people at the American Institute for Certified Public Accountants, people who represent the National Association of Tax Professionals, who basically say, hey, you’re giving someone your most confidential information, Social Security number, date of birth, address. There should be some minimum professional standards around that job.

However, there are some who are concerned over giving the IRS the ability to regulate that saying, you know, this could hurt the mom and pop business who may not have the resources to do these continuing education pieces. One of the minimum standards that the bill prescribes is some number of continuing ed classes.

David Schultz:

So it sounds like the concern is that this could put some smaller tax preparers out of business.

Chris Cioffi:

Yes, certainly that’s one of the concerns. However, again, I think that many tax community members would say you have to adhere to some rules when you’re in many professional jobs. This is simply doing that for tax preparers.

David Schultz:

Yeah, and the stakes are high. I mean, you know, if your taxes get messed up, you could owe a lot of money.

Chris Cioffi:

To that end, the Center for Taxpayer Rights just conducted a mystery shopping test in six regions and found a wide range of prices for preparing returns and inconsistent calculations between sites and even inconsistencies on what kinds of identification documents were requested from taxpayers.

So Wyden, in a statement, said Congress has been waiting around for too long while, in his words, crooked and incompetent tax preparers have been screwing up people’s taxes or outright stealing their money. And obviously that’s some flowery language, but it does suggest that there is something that should be addressed here.

And so the Senate’s approach is, hey, let’s do this in a big package. The House has been kind of taking these things piecemeal. But I think many advocates would say, if you don’t do it in a package, you might end up losing some of these things like the tax preparers. And obviously that takes up a lot of the conversation because it is sort of one of the more controversial pieces.

There are a lot of things in this package that do have broad support, and then the House is kind of putting these one-off bills up. However, they have had some success. We’ve seen a couple of these little bills get marked up in the House. They got unanimous consent in the Senate. Trump signed them into law. But now that the Crapo and Wyden package has come out and it is no longer just a discussion draft but a piece of draft legislation, I think it’s going to be a tougher path for those one-off pieces that come out of the House to get that sign off on the Senate side now that they have a bill and they can say, hey, let’s just do this as opposed to doing these little pieces.

David Schultz:

In that sense, do you think that actually the Senate’s approach might slow things down? Because as you just mentioned, the House is sort of waiting for the Senate to act on its package. The Senate, meanwhile, sounds like it needs to resolve a few disagreements, particularly over what we just talked about, the tax preparer issue. Do you think that we could see a slowdown in these types of provisions moving through Congress, or do you think that there is a good possibility that we could see a lot more tax administration legislation make it to the president?

Chris Cioffi:

I think there’s two sides of the coin. Certainly these one-off pieces can kind of move a little quicker, but the fact that both the House and the Senate are actively looking at some of these tax administration pieces suggests that there’s an appetite and an interest in getting something done. And so when you have that momentum, that can translate into moving legislation across the finish line.

One person I talked to, Sean Clerget, who is a former chief tax counsel for the Ways and Means Committee Republicans, said this could be a big moment where both the House and Senate could really dig in. He was saying that this all shows interest and a willingness among tax writers to take action in the space, potentially before the end of the year.

David Schultz:

Well, here’s my last question I wanted to ask you, and maybe this is a little bit unrealistic, but April 15th is coming up. That’s a pretty important day for folks in our world. Do you think that we could see something happen on that day or before then, or is that way too soon for anything, any real meaningful legislation to move in either chamber?

Chris Cioffi:

Well, Trump put down a marker that said, hey, pass this legislation that is now known as the One Big Beautiful Bill Act by July 4th, and that did happen. So perhaps if he got on Truth Social and put out a post that said, hey, this tax administration bill, I need it done by tax day, perhaps, but perhaps not.

I think it’s more likely that we would see this getting added to a large package of other things, perhaps a funding bill at the end of the fiscal year or something like that, and it’s parlance to say they’re waiting for a vehicle, a legislative vehicle to get this thing across the finish line.

David Schultz:

You and I have talked about that innumerable times on this podcast before, that that’s how things work on Capitol Hill now. You need vehicles.

Chris Cioffi:

Yes, that’s right. You need a vehicle, and I don’t know if there’s a bus leaving the station before then. However, there are some that have to go through Congress by the end of the year if we want to avoid another shutdown and things like that. And so it’s possible that there are places that these tax administration provisions can catch a ride. And so the more things that the House advances suggests that they’re on the same page and some of the things in the Senate bill, and then, hey, you get it into a big package and things move rather quickly when that happens.

David Schultz:

All right. Well, if and when that happens, we’ll have you back on to talk about it. Chris Cioffi talking about what’s going on in the Hill. Chris, thank you so much.

Chris Cioffi: Thank you.

David Schultz: And that’s it for today’s podcast. You can find up-to-the-minute news and the latest tax and accounting developments on our website, news.bloombergtax.com. That website, once again, is news.bloombergtax.com.

Today’s episode is produced by myself, David Schultz, and our editor was Kay Steiger. From Washington, I’m David Schultz. Thanks for listening.