CCH Tax Day Report
In what he stated was the first step toward tax reform, President Trump signed an executive order, “Identifying and Reducing Tax Regulatory Burdens,” at the Treasury Department on April 21. The order instructs the Treasury to review all significant tax regulations issued on or after January 1, 2016, in order to identify those that impose an undue financial burden on taxpayers, add undue complexity or exceed the “statutory authority” of the IRS. Trump also announced during the signing of the order that the administration will have “a big announcement on Wednesday [April 26] having to do with tax reform.”
The April 21 executive order requires the Treasury to submit an interim report on its findings to the president within 60 days, followed up by a full report to the president within 150 days of the executive order. The full report will recommend specific actions to mitigate the burdens imposed by the regulations identified in the interim report. The Treasury would then follow up on that report, which will be published in the Federal Register, specifying steps to be taken to delay or suspend effective dates or otherwise modify or rescind those identified regulations as “appropriate and consistent with law.”
At a press briefing immediately before the signing, Treasury Secretary Steven Mnuchin emphasized the focus of the executive order on ending the complexity of tax regulations. He stated that the order underscored that the president is “going to fix the tax code.” Mnuchin also remarked.” I look forward to taking a hard look at the immense regulatory burden of our tax code, which consumes billions of productive hours in compliance costs.”
“This regulatory reduction is the first step toward a tax reform that reduces rates, provides relief to our middle class, and lowers our business tax, which is one of the highest in the world and has stopped us from so much wealth and productivity,” Trump stated upon signing the executive order.
Comment. Together with Trump’s anticipated tax-reform announcement on April 26, this executive order appears to help give the White House some additional momentum in moving forward on the president’s campaign promises for tax simplification before his “first 100 days” ends.
Comment. Initial speculation as what regulations may be targeted for scrutiny includes the so-called inversion regulations that seek to block the tax benefits of a U.S. company merging with a foreign corporation. Nevertheless, given the over 100 final, temporary or proposed regulations released since January 1, 2016, the list that will now be compiled by Treasury in compliance with the executive order could impact a diverse cross-section of stakeholders.
By George Jones, Wolters Kluwer News Staff
Text of Presidential Executive Order on Identifying and Reducing Tax Regulatory Burdens
Remarks by President Trump at Signing of Financial Services Executive Orders
Treasury Department News Release, TDNR SM-0055