Tax regulations

Treasury proposes to remove nearly 300 tax regulations

The US Department of the Treasury has proposed the repeal of nearly 300 tax regulations that are “unnecessary, redundant or outdated and force taxpayers to navigate unnecessarily complex or confusing rules.” Tax regulations are published by the Internal Revenue Service (IRS) and provide the official interpretation of the Tax Code.

The proposal follows an executive order issued by President Trump on April 21, 2017, directing the Treasury to review certain tax regulations to ensure the tax system is “simple, fair, efficient and pro-growth.” The April ordinance did not attempt to tackle an overhaul of the entire tax regulatory system, but instead targeted all significant tax regulations published on or after January 1, 2016. Under the terms of the l Ordinance, Secretary Steven T. Mnuchin had 150 days to “prepare and report to the President” with his specific recommendations.

Almost a year later, the Treasury proposes to eliminate 298 tax regulations, which Secretary Mnuchin said “are of no use to taxpayers.” These regulations fall into three categories:

  • Regulations interpreting the provisions of the Code which have been repealed;
  • The regulations interpreting the provisions which have been considerably revised and the existing regulations do not take these revisions into account; and
  • Regulations which are no longer applicable.

If that sounds like a lot of regulations after January 1, 2016, it is. The Treasury Department subsequently explained that “As part of the policies set out in Executive Order 13789, Executive Order 13771, and Executive Order 13777, the Treasury and IRS initiated a comprehensive review, coordinated by the Task Force on regulatory reform of the Treasury, all tax regulations. , whatever the date of issue … “

The IRS did not immediately respond to a request for comment. However, according to the Treasury, these cuts will streamline federal tax regulations; reduce the volume of regulations that taxpayers must review; and increase the clarity of tax legislation. In addition, the Treasury maintains that the deletions are “not related to the substance of the rules of the regulation.” The removal of these regulations is “not intended to change the non-regulatory guidelines that cite or rely on these regulations” – you can imagine how considerably this could confuse matters.

79 additional tax regulations referring to regulations targeted for removal will be amended. In total, nearly 400 regulations will be impacted.

I have gone through the list of proposed deletions and changes. That’s a lot of dense material to go through, especially if you are cross-referencing sections of the tax code. And here’s what I found: A number of targeted regulations date back to the 1986 tax reform – some date back to the 1950s – while others only apply to a single tax year. While I’m not sure if this is the best use of the already stretched IRS and Treasury resources right now, overall eliminating the Regs isn’t a bad idea.

By law, the proposal is open to comments from taxpayers. Written or electronic comments and requests for a public hearing must be received by May 14, 2018. To send written comments, send mail to: CC: PA: LPD: PR (REG-132197-17), Room 5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station, Washington, DC 20044. If you prefer to hand deliver your comments, you can do so between 8:00 a.m. and 4:00 p.m. at CC: PA: LPD: PR (REG-132197-17) , Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC.

You can submit electronic comments through the Federal eRulemaking portal at www.regulations.gov (REG-132197-17).

You can read the Treasury notice (67 pages to download in pdf) here.