On Oct. 2, 2017 the U.S. Department of the Treasury released the “Second Report to the President on Identifying and Reducing Tax Regulatory Burdens.” This report articulates the Treasury and Service’s position on eight proposed, temporary, and final regulations. Overall, two of the proposed regulations will be withdrawn entirely, while the remaining six temporary and final regulations will be revoked in part or substantially revised. But, what does this mean for taxpayers?
First and foremost, taxpayers engaging in the activities covered by these eight regulations will need to know what is exactly changing in each. These regulations span across a wide spectrum of activities, from estate taxes to outside attorneys assisting the Service in audits, and many things in between. It is important for taxpayers to be familiar with the regulations mentioned in this report so that they can be prepared for the upcoming changes.
It is also important to note that the door is still open for further changes or regulation on these topics down the road. Although the overarching goal of this report is to reduce the regulatory burden on taxpayers, the Treasury has also noted some areas where they need to continue to do research. The proposed regulation defining political subdivisions that was withdrawn as part of this report is an excellent illustration of this concept. The report notes that the regulation went too far in what was required for defining a political subdivision, but went on to note that the Treasury and Service will continue to look into the issue and may propose new regulations in the future.
Lastly, taxpayers should continue to be on alert for upcoming regulatory changes. Recently, Executive Orders 13771, 13777, and 13789 were issued. All three of these orders focus on revamping and revising the regulatory process. They highlight the Executive Branch’s newfound emphasis on regulatory reform, and may serve as a harbinger for more possible changes on the horizon. These orders have the potential to have a profound impact on Treasury regulations, therefore, taxpayers and their advocates should continue to be vigilant when reviewing their regulatory burden.
All in all it is important for taxpayers and their advocates to stay up to date with the government’s ongoing initiative for regulatory reform. Treasury Regulations have a wide range of influence and any major amendments can have significant taxpayer impact. If you have questions regarding recent amendments to Treasury Regulations or other complex tax issues, please contact John Dies, Managing Director of Tax Controversy, at John.Dies@alliantgroup.com.