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3/19/2020

Prepared Statement of General Counsel Brent J. McIntosh Before the U.S. Senate Homeland Security and Governmental Affairs Subco…

Prepared Statement of General Counsel Brent J. McIntosh Before
the U.S. Senate Homeland Security and Governmental Affairs
Subcommittee on Regulatory Affairs and Federal Management
April 12, 2018

Chairman Lankford, Ranking Member Heitkamp, and Members of the Committee, thank you for
the opportunity to discuss the Treasury Department’s role in advancing one of the
Administration’s chief policy priorities—regulatory reform.
Under Secretary Mnuchin’s leadership, Treasury’s regulatory reform e orts have significantly
advanced the President’s priorities. As you know, the President issued Executive Order 13771—
entitled “Reducing Regulation and Controlling Regulatory Costs”—just days a er Inauguration.
As the O ice of Management and Budget has explained, this Executive Order requires two
regulations to be eliminated for every one new regulation deemed significant under Executive
Order 12866. Executive Order 13771 also requires that an agency’s regulatory actions during
Fiscal Year 2017 impose zero incremental cost.
Treasury has taken several deregulatory actions under Executive Order 13771. Additionally,
pursuant to the policies stated in Executive Orders 13777 and 13789, Treasury issued one Notice
of Proposed Rulemaking to eliminate 298 “deadwood” regulations that are ine ective,
unnecessary, or out of date. Treasury has taken zero new regulatory actions within the meaning
of Executive Order 13771. And Treasury reduced the total number of regulations that appeared
on its Fall 2017 Regulatory Agenda by approximately 100 regulations, on net, from its Fall 2016
Regulatory Agenda.
The President has also advanced his regulatory reform agenda through Executive Orders
specifically directed to Treasury. On February 3, 2017, the President issued Executive Order
13772, instructing the Secretary to report on the extent to which existing financial regulations
promote the Administration’s “Core Principles” of financial regulation, which include
empowering Americans to make independent financial decisions, save for retirement, and build
wealth; prevent taxpayer-funded bailouts; promote American competitiveness at home and
abroad; and make regulation e icient, e ective, and appropriately tailored. In response to the
President’s Executive Order, Treasury has issued a series of reports setting forth more than 250
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Prepared Statement of General Counsel Brent J. McIntosh Before the U.S. Senate Homeland Security and Governmental Affairs Subco…

specific recommendations for reducing regulatory burdens and advancing the Core Principles.
Those recommendations have addressed issues ranging from alleviating the burdens on
community financial institutions, simplifying the extraordinarily complex Volcker Rule, bringing
accountability to the Consumer Financial Protection Bureau, and ensuring competitive U.S.
engagement in international standard setting bodies. And we have been pleased to see concrete
progress on many fronts already.
On April 21, 2017, the President issued Executive Order 13789—“Identifying and Reducing Tax
Regulatory Burdens.” This Executive Order mandated a retrospective review of all significant tax
regulations Treasury had issued since January 1, 2016 through its O ice of Tax Policy or the IRS.
It ordered Treasury to identify any such regulations that impose an undue financial burden on
taxpayers; add undue complexity to the Federal tax laws; or exceed the statutory authority of
the Internal Revenue Service. In a report to the President on October 2, Treasury identified eight
such regulations for modification or revocation. One such regulation under Section 2704 of the
Internal Revenue Code would have hurt family-owned and operated businesses by making it
more costly to transfer a business to the next generation. Another proposed regulation under
Section 103 would have imposed new requirements on municipalities that issue tax-exempt
municipal bonds. Treasury withdrew both of these proposed regulations in October.
Executive Order 13789 also directed the Secretary and the Director of the O ice of Management
and Budget to review and, if appropriate, reconsider the exemption of certain tax regulations
from the OMB review process under a Reagan-era agreement entered into in 1983. Treasury has
actively engaged in that review with OMB. Throughout the process, Treasury and OMB have
prioritized two of the President’s chief policy objectives—ensuring appropriately-tailored
regulation and successfully implementing the once-in-a-generation tax reform bill to deliver all
the benefits the new law promises the American economy.
In addition to these e orts in support of the President’s regulatory reform agenda, Treasury has
of course played a leading role in advancing tax reform. The Tax Cuts and Jobs Act contains
hundreds of provisions designed to provide relief to American families and make American
businesses more competitive. Swi and successful implementation of tax reform through
guidance is critical to unlocking the full economic benefits of the law and carrying out the will of
Congress. As one major business coalition recently observed, “the growth impacts of the
[President’s tax reform] legislation will not be fully realized if businesses are uncertain about
how the [legislation] will be implemented. Thus, delay in issuing guidance will impose a cost on
taxpayers and the American economy.”
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Prepared Statement of General Counsel Brent J. McIntosh Before the U.S. Senate Homeland Security and Governmental Affairs Subco…

That is why implementing the new law in a timely fashion is one of the Department’s highest
priorities. Taxpayers and their advisors rely on timely guidance from Treasury for certainty and
clarity in managing their family budgets and business a airs. The U.S. Taxpayer Advocate—our
nation’s statutory voice for taxpayers—has said that prompt publication of regulatory guidance
is “very taxpayer-friendly, reflecting the IRS’s e ort to o er advance guidance on a complex law,
well before many provisions even take e ect. Simply put, advance guidance enables taxpayers
and businesses to plan.”
We at Treasury agree. As just one example, Treasury and IRS had to begin issuing guidance
about taxation of unrepatriated earnings and profits only seven days a er the law was passed in
order to provide companies and individuals with certainty for purposes of their year-end
financial statements. In addition, in early January the IRS released new withholding tables to
reflect the changes made by the tax reform legislation so that individual taxpayers could begin
to see the impacts of the new law in their paychecks. The new withholding tables were designed
to work with the Forms W-4 that people had already filed with their employers to claim
withholding allowances. This was done to minimize burden on taxpayers and employers. Since
then Treasury and IRS have continued to produce a steady stream of guidance to assist
taxpayers in understanding the new tax law and the benefits available thereunder. This work
will continue.
Consistent with the President’s regulatory reform agenda, Treasury’s goal in implementing tax
reform is to provide timely and necessary clarity that alleviates the burden of uncertainty for
taxpayers, without imposing needless regulatory costs and delays. Thank you for the
opportunity to testify today, and I look forward to the Subcommittee’s questions.
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