IRS proposes to remove 298 regulations

By Sally P. Schreiber, J.D.

The IRS proposed to remove 298 regulations that it says have no current or future application to the Internal Revenue Code and therefore no longer provide useful guidance. REG-132197-17, proposing to remove these rules, was issued Tuesday in response to President Donald Trump’s Executive Orders 13777, Enforcing the Regulatory Reform Agenda (82 Fed. Reg. 12285), and 13789, Order on Identifying and Reducing Tax Regulatory Burdens (82 Fed. Reg. 19317).

Executive Order 13789 directed the IRS to review all regulations issued on or after Jan. 1, 2016. After completing this review, the IRS issued a proposal in 2017 to revise or remove eight regulations and also announced a plan to review all regulations regardless of when they were issued and determine whether any of those rules needed to be removed.

The IRS explained in the preamble to the proposed regulations that the 298 regulations fall into three categories: (1) regulations interpreting Code provisions that have been repealed; (2) regulations interpreting Code sections that have been substantially revised and that have not been amended to reflect these revisions (the statutory changes must have rendered the entire regulation inapplicable); and (3) regulations that are inapplicable because of their terms (e.g., temporary regulations that expire after three years or regulations for a Code provision that applied to returns filed before Jan. 1, 1996).

The proposed rules also would amend 79 other regulations to remove references to the revoked regulations.

The regulations the IRS is proposing to remove cover a broad range of subject matter, from a version of the alternative minimum tax that was repealed by the 1986 Tax Reform Act, P.L. 99-514, to the nonexemption of Communist-controlled organizations under the Code. They also span many years, including some issued in the 1950s.

Comments on the regulations and requests for a public hearing must be received by May 14. The IRS noted that removing these regulations is not intended to alter any nonregulatory guidance that cites to or relies upon them.

Sally P. Schreiber (Sally.Schreiber@aicpa-cima.com) is a JofA senior editor.

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