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Tax Administration: Process Used to Revise the Federal Employment Tax Deposit Regulations

GGD-95-8 Published: Dec 29, 1994. Publicly Released: Dec 29, 1994.
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Highlights

Pursuant to a congressional request, GAO reviewed the revised federal employment tax deposit regulations issued by the Department of the Treasury and the Internal Revenue Service (IRS) on September 24, 1992, focusing on: (1) whether the Treasury and IRS developed the regulations by applying principles from the IRS Compliance 2000 initiative; (2) how the revision process could be improved; and (3) how Treasury and IRS officials know when their efforts to develop and revise regulations result in regulations that are sufficiently simple and easy to follow.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of the Treasury To help forestall stakeholder confusion and frustration regarding the applicability of statutory and executive guidance to tax-related regulations, the Secretary of the Treasury should direct that when such guidance is not applicable the text accompanying the publication of proposed and final regulations should contain a complete explanation why this is so.
Closed – Not Implemented
IRS is considering revisions to the preamble of its regulations that would more explicitly state its assessment of the applicability of statutory and executive guidance to those regulations.
Department of the Treasury The Secretary of the Treasury should require that regulation drafters document internally, when time constraints permit, their consideration of the factors provided in such statutory and executive guidance to better ensure that tax regulations reflect stakeholders' needs.
Closed – Not Implemented
IRS is considering changes to its internal procedures to require that regulation drafters document their consideration of the factors specified in statutory or executive guidance on regulation development.
Department of the Treasury To maximize the value of informal communications with stakeholders, the Secretary of the Treasury should encourage regulation drafters to meet with selected stakeholders to work through implementation issues associated with draft tax regulations before publishing the regulations for notice and comment.
Closed – Not Implemented
Although IRS sees clear benefits to being better informed about the business realities and technical concerns of particular groups, it is also concerned that contacts with such groups should not create a perception that certain taxpayers or practitioners have unfair access to IRS personnel. IRS believes that its procedures properly balance its needs for information with safeguards to prevent unfair access.
Department of the Treasury To better ensure that a well-informed basis exists for Treasury and IRS officials to make judgments concerning whether simple, yet effective, regulations have been designed, the Secretary of the Treasury should require regulation drafters to develop key measures of simplicity for tax regulations. Officials should use these measures to help judge whether existing regulations are too complex and whether regulations under development are sufficiently simple.
Closed – Not Implemented
IRS officials are reviewing their attempts to measure simplicity when promulgating regulations.

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Topics

Deposit fundsFederal regulationsFederal taxesIncome taxesReporting requirementsTax administrationTax lawTax violationsTaxpayersFederal employment