CCH Tax Day Report
President Trump on January 30 issued an executive order, Reducing Regulations and Controlling Regulatory Costs. This order essentially requires a two-for-one swap: “…for every one new regulation issued, at least two prior regulations be identified for elimination, and that the cost of planned regulations be prudently managed and controlled through a budgeting process,” the executive order states. Upon signing the executive order, Trump emphasized that, in particular, the order was targeted to help small businesses, although large businesses, would also benefit.
This latest directive on regulations comes after the Trump administration issued a regulatory freeze on January 20 (TAXDAY, 2017/01/24, W.1).
Comment. The relevance of either the January 20 or January 30 directive to regulations and other guidance related to federal tax law remains unclear. Beyond Treasury and IRS regulations, the extension of the administration orders to IRS revenue rulings, procedures and notices also remain to be tested. Unlike regulations dealing with, for example, health and safety that may create additional compliance costs for certain businesses, the majority of federal tax regulations and other IRS guidance tend to explain provisions enacted by Congress in need of further explanation or direction for their implementation.
“If tax reform happens, we expect Treasury will have their hands full interpreting all the new provisions in the Code,” Joshua Wu, partner at Greaves Wu LLP, told Wolters Kluwer. According to Wu, there could potentially be an exemption for the Treasury regarding certain regulations. “It will be interesting to see if Treasury receives an exemption from this executive order, not only for tax reform but also to interpret other statutory provisions that are coming into effect soon, like the IRS partnership audit rules,” Wu said.
By Jessica Jeane and George Jones, Wolters Kluwer News Staff
Presidential Executive Order on Reducing Regulation and Controlling Regulatory Costs