The Treasury Department and the Office of Management and Budget (OMB) have reached an agreement under which, effective immediately, the OMB’s Office of Information and Regulatory Affairs (OIRA) will review certain significant tax regulations. This represents a departure from prior practice. Under a 1983 agreement between Treasury and the OMB, most Treasury regulations were exempt from the regulatory planning and review process usually applicable to regulatory actions of executive agencies.
Under the new agreement, which was released on Thursday, OIRA will review tax regulations that may “create a serious inconsistency or otherwise interfere with” regulations planned by another agency, “raise novel legal or policy issues,” or “have an annual non-revenue effect on the economy of $100 million or more.”
Treasury regulations subject to review by OIRA will be analyzed under the requirements applicable to “significant” regulations under Executive Order 12866. OIRA will be required to review regulations within 45 days of their submission, except that certain regulations related to P.L. 115-97 (known as the Tax Cuts and Jobs Act) will be eligible for an expedited review of “no more than 10 business days, subject to extensions mutually agreed upon by Treasury and OMB.”
Under the agreement, Treasury will not publish regulations in the Federal Register until OIRA has completed or waived its review.
— Alistair M. Nevius (Alistair.Nevius@aicpa-cima.com) is the JofA’s editor-in-chief, tax.