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.
- Bill Number
- H.J.Res. 65
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2025-02-27: Referred to the House Committee on Ways and Means.
- Last Updated
- 2025-05-06T14:03:32Z
AI-Generated Summary
Purpose
This joint resolution (H.J. Res. 65) aims to disapprove a specific rule issued by the Internal Revenue Service (IRS), preventing it from taking effect. The rule in question, titled "Rules for Supervisory Approval of Penalties," was published in the Federal Register on December 23, 2024. The resolution uses the Congressional Review Act (a law allowing Congress to review and potentially overturn certain federal agency rules) to nullify the IRS's changes to how penalties are approved within the agency.
Key Provisions
- Disapproval of the Rule: Congress explicitly disapproves the IRS rule (89 Fed. Reg. 104419), stating that it "shall have no force or effect."
- Scope: The resolution targets only this specific IRS rule, which updates procedures for supervisory (managerial) approval before imposing certain tax penalties on individuals or businesses.
- Legislative Process: Introduced in the House of Representatives on February 27, 2025, by Representatives Grothman, McClintock, and Steube, and referred to the House Committee on Ways and Means for review.
Significant Changes to Existing Law
- Override of Agency Rulemaking: If passed, this resolution would block the IRS from implementing the new rule, effectively maintaining the prior system for approving penalties without the updated supervisory requirements.
- No Broader Amendments: The resolution does not alter underlying tax laws or IRS authority; it solely targets this one administrative rule under the Congressional Review Act (chapter 8 of title 5, U.S. Code), which allows Congress to veto rules issued by agencies like the IRS within a set timeframe after publication.
Potential Impacts
- On Government Agencies: The IRS would be unable to enforce the new penalty approval procedures, potentially reverting to older, less formalized processes. This could increase administrative burdens on IRS supervisors and delay penalty decisions.
- On Citizens: Taxpayers facing IRS audits or penalties might experience less standardized oversight in penalty assessments, possibly leading to more variability in how penalties are applied. It could benefit those challenging penalties by keeping the status quo, but might not directly affect most routine tax filings.
- On International Relations: No direct impacts, as this is a domestic tax administration matter.
Main Stakeholders Affected
- IRS Employees and Leadership: Directly impacted, as the rule aimed to standardize managerial reviews to ensure fair and consistent penalty applications.
- Taxpayers and Businesses: Those subject to IRS penalties (e.g., for underreporting income or late filings) could see unchanged or continued practices, affecting compliance costs and dispute processes.
- Congress: Strengthens congressional oversight of executive branch agencies, particularly on tax enforcement.
- Tax Professionals and Advocacy Groups: May influence how they advise clients on IRS interactions, with groups favoring or opposing stricter IRS rules potentially mobilizing around this issue.
Notable Legal, Constitutional, or Political Implications
- Legal: Invokes the Congressional Review Act, a tool created in 1996 to check agency power; successful passage would demonstrate its ongoing utility in reversing recent rules without needing new legislation.
- Constitutional: Reinforces the separation of powers by allowing Congress to reclaim authority over executive agency actions, aligning with Article I's grant of legislative power.
- Political: As an early action in the 119th Congress, it highlights partisan divides on IRS operations—introduced by Republican representatives, it could signal efforts to limit perceived overreach in tax enforcement, potentially sparking debates on agency independence versus congressional control. If enacted, it requires presidential approval or a veto override, adding a layer of executive-legislative tension.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (8)
Rep. McClintock, Tom [R-CA-5], Rep. Steube, W. Gregory [R-FL-17], Rep. Kelly, Mike [R-PA-16], Rep. Smith, Adrian [R-NE-3], Rep. Rouzer, David [R-NC-7], Rep. Schweikert, David [R-AZ-1], Rep. Smucker, Lloyd [R-PA-11], Rep. Murphy, Gregory F. [R-NC-3]
Recent Actions
- 2025-02-27: Referred to the House Committee on Ways and Means.
- 2025-02-27: Introduced in House
- 2025-02-27: Introduced in House
Bill Versions
- 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. — issued 2025-02-27 — PDF (1 pages)