Application of Small Business Regulatory Enforcement Fairness Act to tax regulations.

On March 5, 1996, Tax Executives Institute submitted the following comments to Senator Christopher Bond, Chairman of the Senate Small Business Committee, on S. 943, the Small Business Regulatory Enforcement Fairness Act to Tax Regulations. The Institute's comments, which took the form of a letter from TEI President Jack R. Skinner, were prepared under the aegis of the Institute's IRS Administrative Affairs Committee, whose chair is Robert L. Ashby of Northern Telecom Inc. The comments complement testimony filed with Congress in 1995 regarding certain regulatory reform provisions of the so-called Contract with America. Those prior submissions were reprinted in the July-August 1995 and September-October 1995 issues of The Tax Executive.

On behalf of Tax Executives Institute, I am writing to urge that the Internal Revenue Service be exempted from the provisions of S. 942, the Small Business Regulatory Enforcement Fairness Act. For the reasons set forth below, the Institute believes that including the IRS within the scope of any small business regulatory reform act would make government less responsive to the needs of the taxpaying public and hence be counterproductive.

Background

Tax Executives Institute is a volunteer association of nearly 5,000 professionals who are responsible for managing the tax affairs of their companies. TEI represents more than 2,700 companies - a cross-section of the business community. Our members must contend daily with business tax laws, from both tax planning and tax compliance perspectives. The Institute is firmly committed to maintaining a tax system that works - both for taxpayers and the IRS. We believe the diversity and training of our members enable us to bring a uniquely balanced and practical perspective to your attention.

Discussion

The Senate Committee on Small Business is considering legislation that would implement certain recommendations of the White House Conference on Small Business affecting the development and enforcement of government regulations. An amendment in the nature of a substitute offered by Representative Hyde would require agencies - such as the Internal Revenue Service - that publish a "notice of interpretive rulemaking of general applicability' to comply with the Regulatory Flexibility Act by preparing an...