Spending talks stall in the Senate. Senate Republicans and Democrats are warning that another government shutdown could be possible this fall after bipartisan spending talks broke down. Senate Appropriations Committee Chair Susan Collins (R-ME) canceled a planned markup of four appropriations bills Thursday after negotiations with Sen. Patty Murray (D-WA), the panel’s top Democrat, stalled and Republicans could not count on enough Democratic votes to advance the bills. Collins said she would still prefer to move individual spending bills but acknowledged that a continuing resolution may be needed for part of the government.
President Trump nominates IRS chief counsel. Trump nominated James Gadwood of Miller & Chevalier to serve as IRS chief counsel, more than six months after his prior nominee was withdrawn. Gadwood is vice chair of the firm’s tax department and has represented large companies in industries including aerospace, energy, hospitality, technology, and public utilities. Miller & Chevalier represents Trump’s holding company DJT Holdings, in tax matters, reports The New York Times.
National Taxpayer Advocate finds strong filing season, uneven service. National Taxpayer Advocate Erin Collins says the IRS had a largely successful 2026 filing season, processing nearly 139 million individual income tax returns and issuing more than 90 million refunds. But the report warns that taxpayers who needed help often struggled to get it. More than 14 million individual returns were suspended during processing, and more than 1 million taxpayers did not receive refunds within the IRS’s normal processing time. Taxpayers also had more difficulty reaching the IRS by phone than last year, and identity theft victims continued to face delays of about 20 months. Collins argues that a digital-first IRS strategy can improve service but should not become a digital-only strategy.
New York City revenue outlook improves. New York City’s latest budget plan could have about $2 billion more in tax revenue for fiscal years 2026 and 2027 than previously projected by the mayor’s budget office, reports Tax Notes (paywall). The City Council’s forecast incorporates expected revenue from a new pied-à-terre tax on high-value nonprimary residences and a proposed reduction in the unincorporated business tax (UBT) credit. The pied-à-terre tax, still requiring city adoption, is expected to raise about $500 million annually. The proposed UBT credit reduction, from 23 percent to 15 percent for taxpayers with income above $142,000, is still under negotiation and is expected to raise $68 million in 2027 and $69 million in 2028.
Washington gas tax rises as transportation revenue falls. Washington state’s gas tax will increase July 1, even as the state’s transportation revenue forecast weakens. The per-gallon gas tax will rise 1.1 cents to 56.5 cents, while the diesel tax will rise to 59.5 cents. Other vehicle-related charges also will increase, including truck weight fees and the fee for title and registration of vehicles previously registered out of state. The latest forecast shows transportation revenues will be $36 million lower than expected in the current budget and $130 million lower in the 2027-2029 budget.
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