The U.S. House of Representatives yesterday evening, January 11, 2016, approved (with amendments) H.R. 5, the “Regulatory Accountability Act of 2017.” The bill was passed by a vote of 238 to 183. Five Democrats supported the bill.
Title II of H.R. 5 is intended to repeal the so-called “Chevron doctrine.” If enacted, H.R. 5 could have implications for tax regulations. Read text of H.R. 5 [PDF 362 KB]
Rep. Bob Goodlatte (R-VA) introduced H.R. 5, along with several other House Republicans. According to a statement issued by Rep. Goodlatte, H.R. 5 brings together six separate regulatory reform bills as passed by the House in previous Congresses:
The following amendments were approved by the House and incorporated into the bill:
In addition to the change to the current standards proposed by the amendment (noted above) regarding how a court interprets a perceived gap or ambiguity in a relevant statute or regulation, the bill would specifically instruct courts to not defer to certain specific agency action, including determinations made in the adoption of an “interim rule,” and agency “guidance.” The term “guidance” is newly defined in section 102 of the bill to mean “an agency statement of general applicability and future effect, other than a regulatory action, that sets forth a policy on a statutory, regulatory, or technical issue or an interpretation of a statutory or regulatory issue.” The bill would also incorporate other relevant provisions found within the bill into the rules provided by 5 U.S.C. section 706, including the proposed expansions to the Information Quality Act.
If enacted, H.R. 5 could have a significant impact on the analysis of some tax issues in situations in which the language of the Code is unclear. Based on a preliminary analysis of the statutory language of H.R. 5, however, it is not clear whether the bill (if enacted) would have as broad an impact as apparently is intended toward fully repealing the “Chevron doctrine,” and as to what extent it would affect the analysis of Treasury regulations and other Treasury and IRS guidance. For instance, revenue procedures and revenue rulings appear to fall within the proposed definition of “guidance,” yet it is not clear whether temporary regulations promulgated under section 7805 of the Code are considered “interim rules.” Further analysis of the bill’s potential implications on the analysis of tax issues would be needed if the bill were to move forward in the legislative process.
In order for H.R. 5 to become law, the Senate would need to pass identical legislation (or the House and Senate would have to pass the same bill), and the president would need to sign (or not successfully veto) the legislation. The Senate has not scheduled action on H.R. 5, and it is not clear if or when it might consider the bill. If such legislation were considered in the Senate, it is possible that it could be subjected to a filibuster and could require the support of 60 Senators to be approved.
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