January 30, 2017 Executive Order
U.S. President Donald Trump’s January 30, 2017 Executive Order restricts the issuance of new U.S. federal agency regulations.
As a result, the Internal Revenue Service (hereafter the “IRS”) will not propose any new technical tax interpretations, other than the usual notices such as interest rate changes.
Under this new executive order, every time an executive department or agency would like to comment on or enact a new regulation, they must identify at least two prior regulations to be eliminated.
These interpretations represent the opinion of the U.S. Department of the Treasury relating to the Internal Revenue Code (hereafter the “IRC”) and constitute a reference for interpreting the federal income tax legislation. The Treasury’s technical interpretations summarize application of the IRC by providing an official interpretation of the U.S. tax code by the Department of the Treasury. Often these interpretations are presented following requests for private letter rulings or at the Treasury’s initiative to clarify certain aspects of the law (revenue rulings).
According to the White House, the idea of compensating for new regulations by eliminating prior ones has the potential to provide a “regulatory balance” to the flow of new administrative formalities issued by the U.S. Government and help simplify or eliminate obsolete regulations.
Furthermore, according to the White House, the additional costs associated with the new regulations will be offset, to the extent permitted by law, by the elimination of existing costs associated with at least two prior regulations.
The impact of the order
According to President Donald Trump, businesses will find it easier to create and operate a business in the U.S., as they won’t be hampered by tax regulations.
However, opponents of the President, many of whom from the world of business and tax, would argue that this order could be detrimental to the sound administration of the tax system of the world’s leading economy, by creating or maintaining a vague regulatory framework around complex tax rules. Many also consider that these interpretations are needed for the government to function properly and for the sound management of the tax environment that U.S. businesses or companies doing business in the United States rely on.
17 Mar 2017 | Written by :