Reps. Denham and Michaud Introduce “IRS Rulemaking Fairness Act”

Sep 25, 2013 Issues: Economy and Jobs

WASHINGTON – Representatives Jeff Denham (R-CA) and Mike Michaud (D-ME) have introduced a bipartisan bill to provide small businesses a voice when it comes to Internal Revenue Service (IRS) rulemaking. Their bipartisan bill, the IRS Rulemaking Fairness Act (H.R. 3169), would add the IRS to the list of agencies required to certify that a proposed rule will not have a significant impact on small businesses or convene an advocacy review panel and publish a regulatory flexibility analysis. The legislation also includes language to clarify that the IRS’s rule making process must comply with existing regulatory review processes like the RFA.

“As a small business owner I know firsthand that time spent complying with federal regulations is time not spent on growing my business. Small business owners are the engine of progress across the country, and if we’re going to get the Central Valley economy moving again, this kind of legislation will be key. This is one way to help push burdensome federal regulation out of the way so that small business owners can do what they do best—strengthen local economies and create jobs,” said Rep. Denham.

“This bill simply requires the IRS to thoroughly consider those they are impacting. Federal regulations play a critical role in keeping Americans safe and secure. They protect the safety of the food we eat, and they help keep the air we breathe and the water we drink clean. But the least we can do is seek to improve the rulemaking process so that new rules don’t unduly burden the very people they are often designed to help,” said Rep. Michaud.

Small business owners across the country have pointed to the IRS rule making process and regulatory enforcement policies as burdensome. While Congress writes the tax law, the IRS has significant rule making authority. Despite this, the IRS has argued that its rules are not covered by the RFA, which requires federal agencies to assess the impact of their regulations on small entities, and rarely incorporates comments from the Small Business Administration’s Office of Advocacy in the final rule.