This bill nullifies the IRS rule concerning supervisory approval processes for penalties. This action disapproves of the rule published in the Federal Register, effectively preventing its enforcement.
Glenn Grothman
Representative
WI-6
This bill nullifies the Internal Revenue Service's rule concerning supervisory approval processes for penalties. By disapproving the rule as published in the Federal Register, the bill prevents the implementation of the IRS's updated penalty approval procedures.
Congress Moves to Block New IRS Rule on Penalty Approvals: Rule Published in Federal Register Deemed Invalid
The House just took a swipe at the IRS, voting to throw out a recent rule about how supervisors approve penalties. Published in the Federal Register (89 Fed. Reg. 104419), this rule is now on the chopping block, meaning it could soon be completely invalid if this bill becomes law.
What's the Deal with Penalties?
This bill is all about procedure, specifically how the IRS handles penalties. The now-disapproved rule, detailed in the Federal Register, laid out the steps supervisors need to take when signing off on penalties assessed to taxpayers. By voting to disapprove, Congress is essentially saying they don't agree with the IRS's approach. The bill directly targets and invalidates this specific published rule.
Real-World Rollout
If this bill becomes law, it could shake things up for anyone dealing with the IRS. For example, imagine a small business owner who accidentally miscalculated their quarterly taxes. Under the now-disapproved rule, there was a specific process for a supervisor to review and approve any penalties. With that rule gone, the process could change, potentially leading to more or less scrutiny, depending on how the IRS adjusts. The exact impact on taxpayers is uncertain, as it depends on how the IRS will adapt its procedures. What is certain is that the previous process (89 Fed. Reg. 104419) is no longer valid.
Checks and Balances
This move is a classic example of Congress using its oversight power. They're not just tweaking the tax code here; they're directly challenging how the IRS operates. It reinforces the principle of checks and balances – Congress can step in when they think an agency like the IRS has overstepped or made a bad call. This is a direct use of congressional authority under chapter 8 of title 5 of the United States Code.
Potential Challenges
While the bill aims for more oversight, there are some open questions. Getting rid of this rule could create uncertainty. Will there be a clearer, better process, or will it just lead to confusion? Will it tie the IRS's hands, making it harder to enforce tax laws fairly? These are practical considerations that will play out if the bill becomes law.