By Sam Brunson
I previously wrote about the fact that Treasury and the IRS were going to essentially stop issuing guidance in light of the Trump administration’s one-in-two-out rule for regulations.[fn1]
There seems to be some movement on this front. Yesterday, Commissioner Koskinen announced that the IRS was set to begin issuing “subregulatory” guidance again. He didn’t define what he meant by subregulatory, but it probably includes revenue procedures, notices, and revenue rulings, at least. (Interestingly enough, the Tax Notes reporting doesn’t mention revenue rulings,[fn2] while the BNA reporting does. I don’t know if that difference is accidental, or if the two organizations are interpreting differently what Commissioner Koskinen means by subregulatory.)
His proffered reasoning is that this subregulatory guidance is meant for the benefit of taxpayers, that they merely interpret the Code, and that any burden imposed is imposed by the statute, not by the guidance.
Although he didn’t say anything about Treasury beginning to issue regulations again, he also set the groundwork for Treasury to do so without following the executive order’s mandate: since a 1983 agreement with the OMB, he said, Treasury and IRS regulations have been exempt from similar executive orders.[fn3]
So by and large, the tax-regulatory machine may be back in business. This isn’t to say that the IRS’s previous announcement wasn’t honest: it may well have put regulation on hold while it determined whether the executive order applied to its guidance and, if so, how to comply. And it seems to have decided that by and large, it isn’t covered.
Which may be tax exceptionalism. But it’s also a good thing for taxpayers.
[fn1] I also discovered that the flow of regulations and IRS guidance often slows when an administration changes, though it doesn’t halt entirely.
[fn2] Note that the Tax Notes link is probably paywalled; its article is also available on Lexis at 2017 TNT 54-1.
[fn3] Query whether there have been similar executive orders in the past.
The Surly Subgroup 
It’s actually the opposite of tax exceptionalism. He is recognizing that “guidance” and “regulation” are different. Regulations go through notice-and-comment. Guidance doesn’t—it’s just the opinion of the IRS Commissioner, not binding on the courts. So the IRS is fully in compliance with Trump’s executive order, just as the EPA would be if it made a policy announcement.
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