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.
For more information, contact a member of KPMG’s Washington National Tax (WNT) Federal Legislative and Regulatory Services group:
John Gimigliano | +1 (202) 533-4022 | email@example.com
Carol Kulish | +1 (202) 533-5829 | firstname.lastname@example.org
Tom Stout | +1 (202) 533-4148 | email@example.com
Jennifer Bonar Gray | +1 (202) 533-3489 | firstname.lastname@example.org
© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.