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Presidential Executive Order 13789 (Donald Trump, 2017)
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Executive Order 13789: Identifying and Reducing Tax Regulatory Burdens is a presidential executive order issued by President Donald Trump (R) in April 2017 that established a policy calling for tax regulations to provide taxpayers with clarity and guidance. The order also required the U.S. Department of the Treasury to conduct a regulatory review of all tax regulations issued since January 1, 2016, and to develop recommendations aimed at streamlining regulations and reducing the regulatory burden for taxpayers. The Treasury Department, in consultation with the U.S. Office of Management and Budget (OMB), was also required to review and reconsider existing exemptions for certain tax regulations from the regulatory review process.[1]
Background
- See also: Regulatory review
In 2016, then-presidential candidate Donald Trump's (R) campaign platform included a pledge to rein in what he considered to be burdensome federal regulations that slowed down economic growth.[2] Tax regulations, including new debt/equity rules for companies issued in 2016, were considered by the Trump administration to "have effectively increased tax burdens, impeded economic growth, and saddled American businesses with onerous fines, complicated forms, and frustration," according to the text of E.O. 13789. Moreover, an exemption had allowed certain tax regulations to go into effect without being subjected to the regulatory review process under President Clinton's (D) E.O. 12866, which requires the review of any significant regulations by the Office of Information and Regulatory Affairs (OIRA).[3][4][5]
President Trump issued E.O. 13789, titled "Identifying and Reducing Tax Regulatory Burdens," on April 21, 2017, in order to establish a policy calling for tax regulations to provide clarity and useful guidance to taxpayers. The order directed the U.S. Department of the Treasury to review all federal tax regulations issued since January 1, 2016, with the goal of streamlining regulations and minimizing regulatory impacts. The order also called on the Treasury Department, in consultation with the U.S. Office of Management and Budget (OMB), to review and reconsider any regulatory review exemptions for tax regulations.[1]
Impact
Treasury Secretary Steve Mnuchin issued the first interim report pursuant to the order on June 22, 2017. The report identified 105 proposed, final, and temporary regulations that had been issued by the Treasury Department or the Internal Revenue Service (IRS) between January 1, 2016, and April 21, 2017. Only one of these regulations was originally deemed significant under E.O. 12866. However, the Treasury Department determined that fifty-two of the 105 regulations were potentially significant since the definition of a significant regulatory action under E.O. 12866 was not controlling, according to the order. The Treasury Department ultimately identified eight regulations that satisfied the criteria of the order. Click here to review the full criteria.[6][7]
Secretary Mnuchin issued the second report required by the order on October 16, 2017. The second report contained recommendations aimed at mitigating the burdens associated with the eight regulations identified in the first report. The report recommended withdrawing two rules completely, partially revoking three rules, and substantially revising three rules. The report also announced that the IRS would complete a comprehensive review of all regulations, regardless of the date issued, in order to streamline regulations, decrease regulatory burdens, and provide clarity to taxpayers.[3] In February 2018, the IRS proposed the additional removal of 298 outdated or inapplicable regulations from the tax code.[8]
The Treasury Department entered into a Memorandum of Agreement (MOA) with OIRA on April 11, 2018, that removed the regulatory review exemption for significant tax regulations established under E.O. 12866 and a previous MOA. Under the new MOA, all significant tax regulations are subject to review by OIRA.[9][10]
Provisions
Purpose
The order established the following policy for tax regulations:[1]
| “ | The Federal tax system should be simple, fair, efficient, and pro-growth. The purposes of tax regulations should be to bring clarity to the already complex Internal Revenue Code (title 26, United States Code) and to provide useful guidance to taxpayers.[1][11] | ” |
Regulatory review
- See also: Regulatory review
The order required the secretary of the U.S. Department of the Treasury to review all existing significant tax regulations issued on or after January 1, 2016. Following the review, the secretary was required to issue an interim report, in consultation with the OIRA administrator, within 60 days identifying the regulations that satisfied the following criteria:[1]
| “ |
(i) impose an undue financial burden on United States taxpayers;
|
” |
The order instructed that, for the purposes of the review, the definition of a "significant" regulation under E.O. 12866 was not controlling.[1]
Within 150 days of order, the Treasury secretary was required to issue a second report to recommend actions to mitigate the impact of the regulations identified in the previous report. The order directed the Treasury secretary to take steps to delay, suspend, modify, or rescind the identified regulations.[1]
Lastly, the order required the Treasury secretary, in consultation with the director of the OMB, to review and reconsider exemptions for certain tax regulations from the regulatory review process under E.O. 12866 or any successive orders.[1]
See also
- Regulatory review
- U.S. Office of Information and Regulatory Affairs
- U.S. Office of Management and Budget
- Significant regulatory action
External links
- Executive Order 13789: Identifying and Reducing Tax Regulatory Burdens (2017)
- RegInfo.gov
- Regulations.gov
- Search Google News for this topic
Footnotes
- ↑ 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 WhiteHouse.gov, "Presidential Executive Order on Identifying and Reducing Tax Regulatory Burdens," accessed April 27, 2018
- ↑ The Washington Post, "Bannon vows a daily fight for ‘deconstruction of the administrative state,'" February 23, 2017
- ↑ 3.0 3.1 Federal Register, "Executive Order 13789-Second Report to the President on Identifying and Reducing Tax Regulatory Burdens," October 16, 2017
- ↑ Lexology, "How Regulatory Reforms Will Affect Taxes — And Taxpayers," June 8, 2017
- ↑ Lexology, "SALT Implications of Final Section 385 Debt-Equity Regulations," December 21, 2016
- ↑ Accounting Today, "Treasury suggests 8 tax regulations to revoke," July 7, 2017
- ↑ IRS.gov, "Implementation of Executive Order 13789 (Identifying and Reducing Tax Regulatory Burdens)—Notice 2017-38," accessed April 30, 2018
- ↑ Journal of Accountancy, "IRS proposes to remove 298 regulations," February 13, 2018
- ↑ JDSupra, "In Major Change, Regulatory Reform Comes to Tax Regulation," April 17, 2018
- ↑ Treasury.gov, "Memorandum of Agreement," April 11, 2018
- ↑ 11.0 11.1 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
