TEMPORARY POLICY IN THE INTERNAL REVENUE CODE

SUBCOMMITTEE ON SELECT REVENUE MEASURES, TEMPORARY POLICY IN THE INTERNAL REVENUE CODE, Tuesday, March 12, 2019, 2:00 PM

Chairman Thompson and Ranking Member Smith, thank you for the opportunity to submit our comments on this topic. The hearing advisory is ambiguous as to whether it concerns expiring tax provisions, in which case we refer the committee to our comments of March 14, 2018, which we resubmit as an attachment, or, to quote Tax Policy Center’s Daily Deductions for March 7, 2019:

The recent announcement that Treasury and IRS say they will rely less on sub-regulatory guidance such as revenue rulings, revenue procedures, notices, and announcements, as well as temporary regulations.  The department said that because these interpretations do not go through the formal notice-and-comment process, they don’t have the full force of law.  

We are not surprised that this would immediately trigger a hearing. We said as much in our comments on the TPC website. Our answer is the same as any good tax attorney would say. It depends. Internal procedures, notices and announcements should be published in the Federal Register as information.

Revenue rulings that are precedential must be published somewhere, probably also in the Register and on the Treasury and IRS web pages. Those that constitute permanent changes that will require rule making, notice and comment on the same basis as Code changes required by the Tax Court, which are part of the common law and must retain the mandated effect. We are confident you already know this, but the rookies in the Trump Administration may not, in which case all of this may be a temporary problem.