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U.S. Treasury to Review and Re-evaluate Tax Regulations

The Treasury Department plans to undertake a review and re-evaluation of tax regulations issued by the IRS since January 1, 2016. President Trump signed Executive Order 13789 (“Identifying and Reducing Tax Regulatory Burdens”) ordering this action. Following its review and re-evaluation, the Treasury Department will make recommendations.

Tax regulations
The IRS typically issues numerous regulations every year. Some regulations are permanent, others are temporary, and others are proposed. IRS regulations touch every taxpayer, including individuals, businesses, and tax-exempt organizations. When the IRS proposes a regulation, it invites public comments. The federal government maintains a website where individuals can review proposed regulations and make comments. Frequently, the IRS will hold a hearing at which stakeholders and taxpayers can share their concerns about proposed regulations. All regulatory documents are published in the Federal Register.

President’s instructions
Under Executive Order 13789, the Treasury Department’s focus is to identity tax regulations that:

  • impose an undue financial burden on taxpayers;
  • add undue complexity to federal tax laws; or
  • exceed the statutory authority of the IRS.

The Treasury Department plans to make an initial report within 60 days. After that, it will recommend what actions to take, which may include delaying, suspending, or modifying regulations. The second report is due within 150 days. Our firm will keep you posted of developments.

IRS guidance plan
At the same time the President announced his Executive Order, the IRS requested public input on its new Priority Guidance Plan. This plan identifies guidance projects that are high on the agency’s agenda. Generally, these projects cover a wide range of taxpayers and tax administration. In its announcement, the IRS noted that “input is of particular importance because of Executive Order 13771.”

Executive Order 13771 was signed by President Trump in January. The Executive Order generally instructs federal agencies to remove two existing regulations for every new regulation proposed. Since January, the pace of IRS guidance has slowed. Indeed, the IRS has not issued any regulations since January 20, 2017.

The IRS has posted new frequently asked questions (FAQs) and has updated some existing FAQs on its website. The agency also has released several revenue procedures. These are official statements of a particular procedure.

Additionally, the IRS has continued to issue private letter rulings. IRS Chief Counsel has posted advice memoranda. IRS officials also continue to testify at Congressional hearings and speak at trade and industry events. IRS Commissioner John Koskinen has characterized these items as “sub-regulatory” guidance. They appear to be outside the scope of Executive Order 13771. Additionally, a federal agency may determine that a regulation is outside the scope of the Executive Order. The U.S. Department of Health and Human Services (HHS) made this determination for regulations under the Affordable Care Act released in April.

For more information about this article, please contact our tax professionals at or toll free at 844.4WINDES (844.494.6337).
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