Application of proposed rulemaking moratorium to tax regulations.

• Position: Tax Executives Institute

On January 18, 1995, Tax Executives Institute filed the following comments with the Senate Committee on Government Affairs and the House Committee on Government Reform and Oversight on whether any moratorium on federal rulemaking should apply to tax rules issued by the Internal Revenue Service and the Department of the Treasury. The comments took the form of a memorandum from TEI President Linda B. Burke to the members of the two committees.

On behalf of Tax Executives Institute, I am writing to oppose the application to the Internal Revenue Service and the Department of the Treasury of any moratorium on the issuance of rules or regulations. For the reasons set forth below, the Institute believes the extension of any rulemaking freeze to tax regulations would be counterproductive.

Background

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

Discussion

Congress has under consideration proposed legislation that would impose a moratorium on the issuance of federal regulations, including those promulgated on tax matters by the Department of the Treasury and the Internal Revenue Service. Regardless of the general merits of the proposal, TEI believes the country would be illserved by the application of any such moratorium, or regulatory freeze, to tax regulations. Consequently, the Institute urges Congress to exempt tax rules and regulations from the scope of any legislation on this subject.

Let there be no mistake: TEI and its individual members, frequently take issue with particular IRS rules, or with specific provisions in regulations issued by the Treasury Department. We sometimes conclude that the IRS and Treasury have overstepped their bounds and that they promulgate regulations that unnecessarily increase taxpayer burden. And we sometimes even argue that Congress should intervene to overturn the result in a given set of...