Politics

White House Budget Office Takes On Bigger Role In Writing Tax Regulations

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Will Racke Immigration and Foreign Policy Reporter

The White House Office of Management and Budget (OMB) will have more responsibility for shaping tax regulations under an agreement with the Treasury Department, Trump administration officials announced Thursday.

The deal between the two agencies settles a turf war over who should have more control to write regulations that will implement the GOP’s reform bill.

In a joint statement, OMB and Treasury said they had reached an agreement to allow OMB to review tax rules written by Treasury. Since 1983, IRS rules had been exempt from oversight by OMB’s Office of Information and Regulatory Affairs (OIRA), which reviews the regulations of most other government agencies.

“Under today’s agreement, Treasury will continue to swiftly and successfully implement historic tax reform while still avoiding needless regulatory costs and delays,” Treasury Secretary Steven Mnuchin said in a statement, according to the Washington Examiner.

Some GOP lawmakers and conservative groups had been calling for OMB to exercise more oversight of tax rules and subject the regulations to a cost-benefit analysis. They argued that more OMB control would improve the tax rules by putting them through the same kind of review that other agencies face.

Some tax experts, however, worry that more OMB oversight of IRS rules will slow down rule making and leave businesses and individual taxpayers facing uncertainty about their obligations under the tax overhaul.

The new agreement could have major implications for a wide range of tax policies that have yet to be settled by the GOP’s tax reform law. One of the most important is how to treat so-called “pass through” businesses, which aren’t C corporations but instead file taxes as individuals.

Those businesses received a highly complex deduction in the tax bill, but regulations will determine which get the break and which don’t.

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