Free-market groups: IRS rules shouldn't be exempt from White House review

Free-market groups: IRS rules shouldn't be exempt from White House review
© Greg Nash

A coalition of free-market groups is urging President TrumpDonald John TrumpEx-ethics chief calls on Trump to end 'monstrous' migrant policies Laura Bush blasts Trump migrant policy as 'cruel' and 'immoral' US denies report of coalition airstrike on Syria MORE and top administration officials to withdraw an agreement that allows IRS rules to avoid review from the Office of Management and Budget (OMB).

“The IRS must live by the same rules of administrative law and agency oversight as the rest of the executive branch,” the groups wrote in a letter Tuesday.

The letter was sent to Trump, Treasury Secretary Steven MnuchinSteven Terner MnuchinSpotlight falls on Russian threat to undersea cables The Hill's Morning Report — 'Sobering' IG report damages FBI Trump poised to slap tariffs on billion in Chinese imports MORE, OMB Director Mick MulvaneyJohn (Mick) Michael MulvaneyTrump to nominate budget official as next consumer bureau chief Trump close to nominating CFPB chief: report On The Money: Trump imposes B in tariffs on China | China blasts 'fickle' Trump, promises payback | Trump to name consumer bureau director next week MORE and Neomi Rao, administrator of OMB’s Office of Information and Regulatory Affairs.

For decades, the IRS and OMB have had an agreement that generally exempts tax rules from full OMB review. The IRS has argued that the economic effects of its actions come from the laws their rules interpret, rather than from the rules themselves, making OMB review unnecessary.

But the free-market groups said the IRS’s exemption prevents Congress from getting information about major rules that should be reported to the Government Accountability Office while curbing the White House’s ability to supervise the executive branch.

The groups also said the IRS's current practice “impacts the public’s right to learn about and comment on the economic impact of IRS rules that are subject to the Regulatory Flexibility Act.”

Groups that signed the letter include Americans for Prosperity, Americans for Tax Reform, Cause of Action Institute and Citizens Against Government Waste.

Trump signed an executive order last year that directed the Treasury Department and the OMB to review the exemption for tax rules from OMB review. Sens. Ron JohnsonRonald (Ron) Harold JohnsonSenate probes FBI's heavy-handed use of redactions to obstruct congressional investigators Hillicon Valley: DHS gets new cyber chief | White House warns lawmakers not to block ZTE deal | White nationalists find home on Google Plus | Comcast outbids Disney for Fox | Anticipation builds for report on FBI Clinton probe Graham jokes about Corker: GOP would have to be organized to be a cult MORE (R-Wis.) and James LankfordJames Paul LankfordHillicon Valley: Net neutrality ends | What repeal means and what's next | Treasury sanctions Russian firms for aiding cyberattacks | How trolling became diplomacy's new trend | Feds crack down on email scams | Defense bill cyber update This week: Congress faces what could be biggest news week of 2018 Hillicon Valley: Mueller hits Manafort with more charges | DOJ targets NYT reporter in leak probe | Chinese hacker steals sensitive data from Navy contractor | House votes against reviving tech office MORE (R-Okla.) have also urged the Treasury Department and the OMB to revisit its agreement on the exemption.

But some tax lawyers have expressed concerns that subjecting IRS rules to OMB review would slow down the process of issuing guidance needed to implement the new tax law.

When asked about the issue on Monday, House Ways and Means Committee Chairman Kevin BradyKevin Patrick BradyOn The Money: Trump imposes B in tariffs on China | China blasts 'fickle' Trump, promises payback | Trump to name consumer bureau director next week Trump announces tariffs on billion in Chinese goods Congress faces rising pressure to fix tax law MORE (R-Texas) said he encourages the OMB to “maintain their traditional role in rulemaking” but that when it comes to rules implementing the tax law, the bulk of the work will come from the Treasury Department.