Former Treasury Deputy Assistant Secretary for International Tax Affairs Robert Stack discussed IRS resources and tax regulations at the March 3 Federal Bar Association’s 41st Annual Tax Law Conference in Washington, D.C. Stack expressed criticism of the Trump administration’s recent proposals to cut IRS funding and inhibit regulations.
IRS Resources
The IRS’s budget as allocated by Congress has been shrinking or stagnant for years. According to Stack, the Trump administration is proposing to further cut IRS funding by over a billion dollars. “The possibility of such further cuts should set everyone’s hair on fire in this room, IRS and non-IRS,” Stack said.
Stack questioned the notion behind “wrecking the institution” that collects federal revenue. “I beg the tax community to raise the issue of resources for the IRS in every meeting, with every member of Congress, on whatever subject, so we can get back to where we need to be – to be able to raise the revenue and to support the institutions of this great country,” he said.
Stack also noted Treasury Secretary Steven Mnuchin’s support for additional IRS resources. “All of us in the tax community must resolve to find ways to support Secretary Mnuchin and Commissioner John Koskinen… in their constructive efforts to be sure the IRS has the resources it needs,” Stack said.
Regulations
Stack also questioned the Trump administration’s January 30 executive order Reducing Regulation and Controlling Regulatory Costs as applied to tax regulations. This order essentially requires a two-for-one swap, in that with every one new regulation issued, at least two prior regulations must be identified for elimination.
“I feel pretty confident that the executive order will not meaningfully inhibit the tax regulation writing process,” Stack said. He emphasized the important role often given by Congress to regulations during the enactment of certain tax statutes that require further explanation by Treasury. “Our system could not operate without the regulation writers,” Stack said.
Stack proposed a hypothetical scenario where the Treasury Secretary tells Congress the agency cannot write regulations on a Patient Protection and Affordable Care Act (ACA) replacement because it could not identify two other regulations to eliminate. “I would fully expect that the good people of the White House, Office of Management and Budget (OMB) and Treasury will come to the conclusion that, at least with respect to this executive order, tax regulations are different.”