Bloomberg Quotes Leila Carney on Regulatory Authority in New Tax Package

Congressional tax writers are taking steps to head off any future legal challenges to their new tax bill, but it’s a delicate balancing act.

The giant bill that got the House Ways and Means Committee’s stamp of approval Wednesday includes numerous provisions that explicitly grant the Treasury Department authority to issue regulations implementing tax-free tips, a higher cap on deducting state and local taxes, and many other changes. The grants of authority indicate that the Treasury secretary “shall prescribe such regulations or other guidance as may be necessary” to implement a particular provision, or otherwise direct Treasury to act.

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Awarding agencies broad, explicit grants of authority to issue regulations will be “a recipe for uncertainty” for taxpayers, given how long it can take to write regulations and the possibility that a new administration with different priorities may ultimately end up doing it, said Leila Carney, a Member at Caplin & Drysdale. “They can expand agency interpretation in the near future to be in line with their goals, but down the line that’s not going to be assured.”

Conservative lawmakers have indicated they’re conscious of Loper Bright, both because it highlights the need for Congress to be clear about delegating authority to agencies and because it emphasizes and preserves Congress’s own power to write laws instead of simply leaving it to agencies to interpret them via regulation.

Loper Bright allows Congress to put “more limits on the abilities for bureaucrats to add cost to families by coming up with rules and regulations Congress never voted on,” House Majority Leader Steve Scalise (R-La.) said Wednesday.

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