The Treasury Department and the IRS released their 2017-2018 Priority Guidance Plan, which prioritizes various tax issues that should be addressed through regulations, revenue rulings, revenue procedures, notices, and other published administrative guidance. The new plan takes into account various Executive Orders issued this year directed at administrative regulations.
Since taking office, the President has issued several Executive Orders directed at regulations, including tax regulations. Executive Order 13771 requires federal agencies to withdraw two existing regulations for every new regulation. Executive Order 13777 created regulatory review task forces at federal agencies. Executive Order 13789 instructed the Treasury Department to review the tax regulations issued in 2016.
In July, the Treasury Department identified two regulations to be withdrawn and six regulations to be revoked, modified or otherwise changed. The two regulations withdrawn by the IRS are the estate tax valuation proposed regulations and the political subdivision proposed regulations.
“Treasury is taking a serious look back at its own regulations that are already on the books” said Treasury Secretary Steven Mnuchin in October. According to Mnuchin, the IRS has identified “hundreds of rules and regulations that are outdated.”
Priority Guidance Plan
The 2017-2018 Priority Guidance Plan is divided into four parts. Part 1 focuses on the eight regulations identified for withdrawal, revocation, modification, or other action. Part 2 describes certain projects that the Treasury Department and the IRS have identified as burden reducing. Part 3 describes various projects to implement the new centralized partnership audit regime. Part 4 describes specific projects by subject area that will be the focus of the balance of the efforts of this plan year.
Items identified for near-term burden reduction include:
- Guidance under Section 170(e)(3) regarding charitable contributions of inventory.
- Guidance on refunds under the Combat-Injured Veterans Tax Fairness Act.
- Guidance under Section 954(c) regarding foreign currency gains.
- Guidance under Section 3405 regarding distributions made to payees, including military and diplomatic payees, with an address outside the United States.
Additional guidance projects include:
- Guidance under Section 707 on disguised sales of partnership interests.
- Guidance on the physical presence of certain individuals in Puerto Rico or the United States Virgin Islands under Section 937(a) following Hurricane Irma or Hurricane Maria.
- Update to the whistleblower regulations.
- Additional guidance on issues relating to lifetime income from retirement plans and IRAs.
- Regulations updating the rules applicable to Employee Stock Ownership Plans.
- Guidance under Section 401(a)(9) on the use of lump sum payments to replace lifetime income being received by retirees under defined benefit pension plans.
- Regulations under Regulation Section 1.1502-36 and related provisions regarding losses on subsidiary stock.