TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Saturday, February 18, 2017

IRS Suspends Guidance Due To Trump Executive Order

Sam Brunson (Loyola-Chicago), The (Near) Future of Treasury Regulations:

Today’s Tax Notes reports [No Substantive IRS Guidance Coming for a While, Official Says] that the IRS has announced that it will not release pretty much any new formal guidance (including revenue rulings and revenue procedures) for the foreseeable future. [Fn: It will continue to release routine guidance, like updated interest rates and updated mileage allowances.]

Why not? A confluence of an Executive Order and a January 20 memorandum. The EO, Reducing Regulation and Controlling Regulatory Cost, requires that, for every new regulation issued, two existing regulations be eliminated.

The January 20 memorandum further prohibits agencies from sending regulations to the Federal Register until they’ve been reviewed by an agency or department head appointed by Trump.

Whatever one thinks of the regulatory state, this lack of potential tax regulations and guidance is bad for taxpayers. Taxpayers have to comply with tax rules, even where Congress hasn’t drafted them clearly, or didn’t anticipate a particular set of events. ...

([I]t’s worth pointing out that the IRS will continue to issue private letter rulings, meaning taxpayers who have enough money will still be able to get comfort on ambiguous tax positions.)

IRS News, Tax | Permalink


Does it matter? In my limited dealings with the IRS, there's always the provision that the advice they give is not binding on them. Even if they tell you something is OK, they can later turn around and say it isn't.

In such a context, what the IRS has actually done in the past as precedent matters more than any guidance it might offer or not offer following this Trump order.

I also suspect that this is the IRS applying the Washington Monument ploy. Whenever there is a situation that government officials don't like, they respond in the way that imposes the most burden on the public. It's one of the best evidences that "public servant" is a misnomer.

Posted by: Michael W. Perry | Feb 18, 2017 5:21:33 PM

Honest question: Is the Service claiming that revenue rulings and revenue procedures are the same as regulations?

Posted by: Mike Petrik | Feb 19, 2017 2:09:50 PM

Michael is spot on. The beast refuses to believe it lost.

Posted by: Dale Spradling | Feb 20, 2017 7:17:43 AM

Honest Answer: The Executive Order defines "regulation" as any " agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or to describe the procedure or practice requirements of an agency," It then exempts regulations issued with respect to a military, national security, or foreign affairs function of the United States and regulations related to agency organization, management, or personnel and regulations specifically exempted by the person responsible for enforcing the EO.

So, yes, Revenue Rulings and Procedures are covered by the EO. IRM provisions, however, are probably not covered.

Posted by: Bryan Camp | Feb 20, 2017 2:23:18 PM