The U.S. House of Representatives today passed H.R. 4768, the “Separation of Powers Restoration Act of 2016,” as previously reported by the Judiciary Committee. The vote was a 240-171 mostly along party lines.
Read text of H.R. 4768.
The report [PDF 370 KB] for the bill states that H.R. 4768 amends the Administrative Procedure Act to overturn the so-called “Chevron doctrine” of judicial deference to agency interpretations of statutory and regulatory provisions. It further explains that the bill would authorize courts that review agency actions to decide all relevant questions of law, including the interpretation of constitutional and statutory provisions and rules, without deferring to previous legal determinations by the agency (de novo review).
Overturning the “Chevron doctrine” 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. 4768, however, it is not clear whether the bill (if enacted) would have as broad an impact as apparently was intended and to what extent it would affect the analysis of Treasury regulations. 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.
The Senate has not scheduled action on the bill. In order to become law, identical legislation would need to pass both the House and the Senate and the president would need to sign (or not successfully veto) such legislation.
The White House has issued a Statement of Administration Policy [PDF 213 KB] indicating that the Administration strongly opposes House passage of H.R. 4768 and that, if the president were presented with the bill, his senior advisors would recommend he veto it.
© 2017 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.