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Author: Service2Client
IR-2026-44: IRS: Act now to file, pay, or request an extension
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Facilitating Access to Housing and In-State Tuition, Sanctioning Iran and the Battle Over DHS Funding
4 min read
21st Century ROAD to Housing Act (HR 6644) – As many local governments face the problem of rising affordability and severe housing shortages, this bipartisan bill would update existing housing programs to increase the housing supply, as well as streamline federal regulations that slow construction. Among its provisions, the legislation would authorize a pilot program designed to convert vacant or underused buildings into residential housing, issue grants for infrastructure improvements for utilities and transportation, and include construction of new housing units for low- and moderate-income residents. The legislation was introduced on Dec. 11, 2025, by Rep. French Hill (R-AR). It originally passed in the House on Feb. 9, but the Senate made changes before passing it on March 12. It has returned to the House for a final vote.
Territorial Student Access to Higher Education Act (HR 6472) – This act would amend the Higher Education Act of 1965 to provide for in-state tuition rates for certain residents of Guam, the Commonwealth of the Northern Mariana Islands, American Samoa, and the United States Virgin Islands. The bill would help offset the high cost of attending college on the U.S. mainland, which prohibitively adds thousands of dollars to airfare, housing, and basic living expenses incurred by citizens of U.S. territories. The legislation was introduced by Rep. James Moylan (R-Guam) on Dec. 4, 2025. It passed the House on March 7 and is currently under consideration in the Senate.
Enhanced Iran Sanctions Act of 2025 (HR 1422) – On Feb. 8, 2025, Rep. Michael Lawler (R-NY) introduced this bill to strengthen secondary sanctions on foreign entities (e.g., banks, insurers, pipeline construction and operation facilities) that help process, export, or sell illicit Iranian oil, including for liquified natural gas. The bill lay dormant in the House until late February, when the U.S. launched its attack on Iran. On March 10, the bill was updated to include an interagency work group to develop more sanctions related to Iran and a multinational effort to enforce sanctions. The latest version of the act was passed in the House on March 16; its fate currently lies in the Senate.
Servicemembers’ Credit Monitoring Enhancement Act (S 2074) – The purpose of this bill is to provide free credit monitoring for veterans. Presently, only active duty members can take advantage of this service. The bill was introduced by Sen. Amy Klobuchar (D-MN) on June 12, 2025. It passed unanimously in the Senate on March 5 and is currently under consideration in the House.
Department of Homeland Security Appropriations Act, 2026 (HR 7744) – This is the bill that is currently holding up appropriations for the Department of Homeland Security (DHS) for the fiscal year ending Sept. 30. The bill was introduced by Rep. Tom Cole (R-OK) on March 2 and passed in the House on March 5. However, it has triggered a partial government shutdown and is under heated debate in the Senate. Republicans insist on passing the complete bill with increased funding for national security and border protection. The legislation also includes provisions prohibiting funds for Diversity, Equity and Inclusion and Critical Race Theory programs, as well as abortions and gender-affirming care for ICE detainees. Senate Democrats are seeking to include guardrails that would prohibit ICE agents from wearing masks or entering homes, schools, hospitals, etc., without a judicial warrant.
PAY TSA Act of 2026 – Rep. Nick Langworthy (R-NY) introduced a carve-out bill for DHS on March 16, authorizing specific fees already collected to fund the Transportation Security Administration (TSA) during shutdowns. The bill would direct the Aviation Passenger Security Fee (initiated after the 9/11 terror attacks) to be used to pay TSA agents during any period that TSA appropriations lapse. Airlines currently charge this passenger fee ($5.60 for a one-way trip and up to $11.20 for a round-trip) for flights that originate in the United States. The bill is not expected to pass due to Republican opposition to carving out funding from the general DHS appropriations bill.
End Special Treatment for Congress at Airports Act of 2026 (S 4123) – Sen. John Cornyn (R-TX) introduced this bill on March 17 as a companion bill reflecting stalled appropriations for DHS – and for TSA workers specifically. The bill calls for a ban on Congressional lawmakers’ current preferential status that enables them to sidestep security checkpoint lines at U.S. airports. The ban would require members of Congress to wait in TSA lines along with other passengers. The bill passed in the Senate on March 19, and its fate now lies with the House.
Version 2
The Governance Wall and AI Regulation
4 min read
The era of artificial intelligence as a competitive advantage has hit a structural barrier – the Governance Wall. Some time back in 2024 and 2025, organizations raced to adopt AI tools to automate decisions, improve efficiency and cut costs. Now, as we move through 2026, the conversation is shifting from “How powerful is your AI?” to “Can you explain its decisions to a regulator, customer or even a judge?”
As global regulations move from abstract guidelines to strict enforcement, businesses must move from pure automation to strategies defined by traceable, human-centred oversight.
The Shift From Innovation to Accountability
In the early days of AI adoption, the priority was speed and results. Algorithms made decisions behind the scenes with little transparency. As AI improved, it was used in high-stakes scenarios like screening job applications, approving loans, detecting fraud and influencing health decisions. When these systems make mistakes, there are consequences that could include lost opportunities, discrimination claims or legal exposure.
As a result, regulators and even consumers are demanding answers. This shift has seen businesses move from AI innovation to AI accountability, where every automated decision must be justified, traceable, and explainable.
The Governance Wall and Regulatory Landscape
The governance wall refers to the growing layers of regulation, policies, and legal expectations that AI systems must pass before deployment.
AI laws such as the EU AI Act, which will take full effect in August, have set a global gold standard for transparency. One of the articles in this law is the Right to Explanation, which requires any company using AI for high-risk decisions to explain the logic behind the output.
Across the United States, some states have already introduced stricter AI-related rules. Notable examples include California’s AB 2013 and Colorado’s SB 24-205 state laws requiring businesses to disclose when AI is used in consequential life decisions, such as hiring, insurance premiums, or credit lending.
The Real Business Impact
For many businesses, this shift is more than a compliance issue as it introduces a complete operational change.
- Explainability is no longer optional
AI systems must be designed in a way that allows you to explain outcomes clearly. For instance, if a system rejects a loan application or filters out a job candidate, you must be able to justify why. Hence, a system must have transparent algorithms, clear logic pathways, and documented decision criteria. - Audit trails are becoming mandatory
Businesses are now expected to maintain audit trails. These are detailed records showing what the AI did, when it did it, and why it made a specific decision. If regulators or legal teams ask questions, you must provide evidence and not assumptions. - Pre-use notices and opt-out options
Before an AI agent processes a customer’s data, a business may be required to notify the customer that AI is being used, explain how it impacts them, and offer a way to opt out. - Board-level oversight
AI is no longer just an IT concern. Executives and directors are increasingly responsible for managing AI-related risks, ensuring compliance with regulations, and protecting the company from legal exposure. In other words, the AI strategy must align with the legal and risk management strategy.
The SEC and the AI Washing Crackdown
While local regulators focus on consumers, the U.S. Securities and Exchange Commission (SEC) is focusing on investors. As AI becomes a buzzword, many companies are tempted to exaggerate their capabilities. This practice, known as AI washing, involves claiming to use advanced AI when the technology used is minimal or non-existent. Companies do this to attract investors, boost valuation, and appear innovative in a competitive market.
The SEC has made it clear that any AI claims that are misleading will be treated as securities fraud. This is not just a problem for tech giants, as even small and medium businesses seeking funding are having their tech stacks audited. Firms found in violation face serious consequences – as happened to Delphia and Global Predictions, which had to pay $400,000 in penalties.
Strategic Solutions
For a business to scale without being paralyzed by regulations, it must:
- Implement Human-in-the-Loop (HITL) systems by positioning human staff as quality assurance to sign off on high-stakes outputs. This will provide the human judgment layer that regulators demand.
- Adopt small language models as they are smaller, domain-specific, and easier to interpret and audit. They also offer explainable AI (XAI) capabilities, making it easy to show your work.
- Unified governance to facilitate compliance. This will require leadership, including legal (interpret laws), IT (build audit trails), and HR or operations (manage the human oversight) to work together.
Filing Your 2026 Tax Return? The Stakes Just Got Higher
4 min read
Picture two things happening at the same time. The agency responsible for reviewing your tax return is understaffed and buried under a backlog, and the software that the agency uses to catch filing errors just keeps getting better.
That combination should give any taxpayer pause this season. Not because an audit is necessarily coming, but because if something does go wrong, the window for getting it resolved quickly has shrunk considerably.
The IRS Is Running Lean, But It’s Technology Isn’t
The agency lost more than a quarter of its workforce in 2025. The National Taxpayer Advocate’s most recent annual report to Congress documented the drop: from roughly 102,000 employees to about 74,000. Those departures, through a mix of voluntary exits and layoffs, spread across nearly every division.
Funding took a hit at the same time. Congress reversed a significant portion of the IRS budget boost approved through the Inflation Reduction Act, pulling back billions earmarked for enforcement and technology investment. A government shutdown that stretched across October and November of last year piled further delays onto an already strained system. The Treasury Inspector General for Tax Administration confirmed in a January report what tax practitioners were already seeing firsthand: a serious backlog in the processing of amended returns and taxpayer correspondence.
Here’s the part that catches people off guard. None of that has slowed the IRS’s ability to spot problems on your return. The agency’s systems cross-reference what you report against data received independently from employers, brokers, and financial institutions. Artificial intelligence and expanded automation have made error detection faster and more precise, staffing levels notwithstanding.
Fewer people are available to handle problems once they surface. But the technology responsible for finding those problems is running better than ever.
What This Looks Like in Practice
Tax professionals working with real clients are the best window into what this means day to day. Advisors report receiving IRS notices today that are resolving matters dating back to 2023, showing a multi-year lag on what should be routine correspondence. The practical response among preparers has been to tighten processes and leave less to chance.
Some advisors have added specific safeguards, such as obtaining power of attorney to monitor clients’ IRS online accounts directly rather than waiting for slow paper notices. Others describe the current environment plainly: the cost of needing to amend a return has gone up, not necessarily in dollars, but in time and uncertainty.
A poll of tax and financial advisors conducted during a recent industry webinar found that every respondent is maintaining at least the same level of care they applied when IRS staffing was at full strength. Nearly half said they are actively raising the bar this season.
What You Should Do Differently
Here are a few practical steps worth taking seriously this year:
- Give your preparer complete and accurate information. Incomplete or inconsistent reporting is where most errors begin, and those errors are exactly what the IRS’ matching systems are built to catch.
- If you are claiming something new on your return, ask your preparer to walk you through the basis for it. Understanding what you are filing and why is reasonable.
- Set up an IRS online account at IRS.gov if you haven’t already. You can monitor your filing status, review transcripts, and spot potential issues before they become formal notices.
- And if something does go sideways, respond early. Letting a notice sit without a response doesn’t slow the IRS down. It just costs you time you don’t have.
Conclusion
The agency may be a smaller operation than it was a few years ago. But the part of it designed to find mistakes on your return is still very much running.