Reg flex, IRS funding draw TEI's attention.

• Position: Tax Executives Institute; Regulatory Flexibility Act

In separate letters to Speaker of the House Dennis Hastert, TEI President Charles W. Shewbridge, III recently urged Congress both to reject a proposal to include the Internal Revenue Service within the provisions of the Regulatory Flexibility Act and to provide adequate funding for the agency.

TEI renewed its opposition to the application of "Reg Flex" to the IRS in a June 15 letter. Under legislation making its way through Congress, the IRS and other agencies that publish a notice of interpretative rulemaking of "general applicability" would have to delay release of the rules until it had prepared an analysis that the final rule reduced significant economic effect on "small entities" to the maximum extent possible. H.R. 1882 would also permit adversely affected small entities to seek judicial review of the agency's action.

"Including the IRS within the scope of H.R. 1882's proposed amendments," Mr. Shewbridge stated, "would make government not more but less responsive to the needs of the taxpaying public and hence be counterproductive." Enactment of the legislation could significantly delay the issuance of important guidance, thereby making it more difficult for all taxpayers -- small businesses -- included to meet their tax responsibilities, the TEI president stated. He urged Congress to reject both H.R. 1882 and its Senate counterpart, S. 1156.

TEI's second letter to the Speaker of the House, sent on July...