Treasury identifies eight regulations subject to modification and potential repeal

The Treasury Department on July 7 issued Notice 2017-38, which identifies eight regulations — including those issued under Section 385 — that could be subject to some reform, including modification, streamlining, or potential repeal.

Executive Order 13789, which was issued on April 21 by President Trump, ordered Treasury to review all “significant tax regulations” issued on or after Jan. 1, 2016, and to submit a report within 60 days that identifies those regulations that either (1) impose an undue burden on U.S. taxpayers, (2) add undue complexity to federal tax laws or (3) exceed the statutory authority of the IRS. The eight regulations identified in the notice meet at least one of the first two criteria, meaning Treasury does not believe that the IRS has exceeded its statutory authority for any of those regulations.

It is not yet clear what actions Treasury will take with regard to each of these regulations, though the notice states Treasury intends to propose reforms to mitigate burdens on taxpayers. Such modifications may include full repeal of the regulation. For now, Treasury is requesting comments, which are due on Aug. 7, on whether these regulations should be rescinded or modified, and if the latter, how the regulations should be modified to reduce burdens and complexity.

For more information, see Tax Flash 2017-04.

Dustin Stamper
Director, Washington National Tax Office
T +1 202 861 4144

Shamik Trivedi
Manager, Washington National Tax Office
T +1 202 521 1511

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