H.J.Res.65 - Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Internal Revenue Service relating to Rules for Supervisory Approval of Penalties. (119th Congress)
Summary
H.J.Res.65 is a joint resolution introduced in the House of Representatives aiming to disapprove a rule submitted by the Internal Revenue Service (IRS) concerning supervisory approval of penalties. The resolution specifically targets the rule published in the Federal Register (89 Fed. Reg. 104419) on December 23, 2024. If passed, the resolution would nullify the IRS rule, preventing it from having any legal effect.
The resolution utilizes the Congressional Review Act (CRA), codified in chapter 8 of title 5, United States Code, which allows Congress to review and potentially disapprove new regulations issued by federal agencies. This mechanism provides a check on the executive branch's regulatory authority.
The bill was introduced by Mr. Grothman, along with Mr. McClintock and Mr. Steube, and was referred to the Committee on Ways and Means, which has jurisdiction over tax policy.
Expected Effects
If enacted, H.J.Res.65 would prevent the IRS from implementing the "Rules for Supervisory Approval of Penalties" as published in the Federal Register. This means the existing procedures for supervisory approval of penalties within the IRS would remain in place, and the changes proposed by the rule would not take effect.
The practical effect would depend on the nature of the changes proposed by the disapproved rule. It could result in either maintaining a status quo that some find preferable or preventing improvements to penalty approval processes that the IRS sought to implement.
Ultimately, the impact hinges on the specific content of the disapproved rule and its intended effects on taxpayers and IRS operations.
Potential Benefits
- Prevents potential overreach by the IRS in penalty assessments, safeguarding taxpayers from unfair or excessive penalties.
- Maintains existing procedures for supervisory approval, providing stability and predictability for taxpayers and the IRS.
- Reinforces congressional oversight of executive branch agencies, ensuring accountability and preventing regulatory overreach.
- Could lead to a re-evaluation of the penalty approval process, potentially resulting in a more balanced and transparent system.
- Addresses concerns about the specific rule, potentially leading to a more tailored and less burdensome approach to penalty supervision.
Potential Disadvantages
- May prevent the IRS from implementing improvements to the penalty approval process, potentially leading to inefficiencies or inconsistencies.
- Could hinder efforts to ensure fairness and accuracy in penalty assessments, potentially disadvantaging some taxpayers.
- Creates uncertainty for taxpayers and the IRS regarding the applicable rules for supervisory approval of penalties.
- May be viewed as an attempt to weaken the IRS's ability to enforce tax laws, potentially undermining tax compliance.
- Could lead to increased litigation and disputes over penalty assessments, adding to the burden on taxpayers and the courts.
Constitutional Alignment
The resolution aligns with the principle of separation of powers, as it allows Congress to check the regulatory authority of the executive branch (specifically, the IRS). Article I, Section 1 of the Constitution vests all legislative powers in Congress, which includes the power to oversee and disapprove agency regulations.
The Congressional Review Act, which H.J.Res.65 utilizes, is a mechanism established by Congress to exercise this oversight function. By disapproving the IRS rule, Congress is asserting its authority to shape tax policy and ensure that agency regulations are consistent with congressional intent.
Furthermore, the resolution could be seen as indirectly related to the due process clause of the Fifth Amendment, as it seeks to ensure fairness and transparency in the imposition of penalties by the IRS. However, the direct constitutional connection is primarily through Article I and the principle of separation of powers.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).