Executive Order to reduce regulations
Executive Order to reduce regulations
President Trump today signed an Executive Order having a goal of “reducing regulation and controlling regulatory costs.”
- Unless prohibited by law, whenever an executive department or agency publicly proposes for notice or comment or otherwise promulgates a new regulation, it must identify at least two existing regulations to be repealed.
- For the fiscal year that is currently in progress, the heads of all agencies are directed that “the total incremental cost of all new regulations, including repealed regulations, to be finalized this year” shall be no greater than zero ($0), unless otherwise required by law or consistent with advice provided by the Office of Management and Budget (OMB).
- Any incremental costs associated with new regulations will be, to the extent permissible by law, offset by the elimination of costs associated with at least two prior regulations (with eliminating existing costs being done in accordance with the Administrative Procedure Act and other applicable law).
- OMB is to provide agencies with guidance on the implementation of the Executive Order, including guidance for measuring regulatory costs and what qualifies as “new” regulations.
- Unless otherwise required by law, no regulation shall be issued by an agency if it was not included on the most recent or updated version of the published Unified Regulatory Agenda required under Executive Order 12866 (issued in 1993), or any successor order, unless the issuance was approved in advance by OMB.
- During the administration’s budget process, OMB will identify for agencies a total amount of incremental costs that will be allowed for each agency in issuing new regulations and repealing regulations for the fiscal year—and the agency cannot exceed that allowance unless required by law or approved by OMB.
For purposes of these rules, the Executive Order generally defines the term “regulation” or “rule” as “an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or to describe the procedure or practice requirements of an agency,” but provides exceptions for:
- Regulations issued with respect to a military, national security, or foreign affairs function of the United States
- Regulations related to agency organization, management, or personnel
- Any other category of regulations exempted by OMB
The Executive Order, on its face, does not provide exceptions for tax regulations. However, OMB seemingly has broad authority to provide exceptions for categories of regulations. To the extent OMB does not provide exceptions for some or all tax rulemaking, the Executive Order seemingly could potentially affect the issuance of not only proposed and final tax regulations, but also revenue rulings, revenue procedures, and IRS announcements.
© 2024 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
For more detail about the structure of the KPMG global organization please visit https://kpmg.com/governance.
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained 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 3712, 1801 K Street NW, Washington, DC 20006.