Tax regulations no longer need OIRA review


Treasury and the Office of Management and Budget (OMB) signed a memorandum of agreement (MOA) on June 9 that ends the review of tax regulations by OMB’s Office of Information and Regulatory Affairs (OIRA). The decision could speed up the regulatory process but removes an extra venue for taxpayers to lobby on guidance. 


The new agreement effectively reverses a Trump administration policy that had subjected tax regulations to review for the first time in decades. Executive Order 12866 issued by President Clinton in 1993 generally requires federal agencies to submit major regulations to OIRA for review. But under a series of long-standing MOAs, tax regulations were generally exempt from these requirements. President Trump ended that in 2018 with an MOA that required tax regulations to undergo OIRA review if the regulations raised novel legal or policy issues, interfered with action by another agency, or had a non-revenue economic impact of $100 million or more.


In practice, nearly all meaningful regulations were submitted to OIRA for review over the past five years. The impact of review could be publicly gauged, as disclosure rules allowed for taxpayers to view any changes made to guidance after the OIRA review. Many taxpayers lobbying on regulatory issues had hoped to find a more receptive audience at OIRA than at Treasury, but substantive changes during the OIRA review process were relatively rare. OIRA did often prompt Treasury to further explain their reasoning in preambles. Treasury appears likely to retain the practice of expansive preambles to combat an increasing trend to challenge tax regulations on procedural grounds.



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