Republicans in the House of Representatives and the Senate have introduced bills to derail the Proposed Regulations under Section 2704 of the Internal Revenue Code ("Proposed Regulations"), including bills to (1) nullify the Proposed Regulations and prevent future regulations, and (2) cut federal funding associated with the enforcement of such Proposed Regulations.
The first bill, introduced by Jim Sensenbrenner, R-Wis., in the House of Representatives, would invalidate the Proposed Regulations. It is a short bill and essentially states that the Proposed Regulations and any substantially similar regulations promulgated shall have no force or effect. The second bill, sponsored by Warren Davidson, R-Ohio, in the House of Representatives, is similar to the first bill but adds another element. It too states that the Proposed Regulations shall have no force or effect. It then seeks to block federal funding for the rules: "No Federal funds may be used to finalize, implement, administer, or enforce such proposed regulations or any substantially similar regulations."
Republicans in the Senate are also actively pursuing action against the Proposed Regulations. Marco Rubio, R-Fla., introduced companion legislation to Rep. Davidson's bill, stating that the Proposed Regulations shall have no force or effect, with identical language blocking federal funding. In addition, numerous Republican Senators co-signed a letter sent to the Honorable Jacob Lew, Secretary of the Treasury, asking the Treasury to withdraw the Proposed Regulations.
It remains to be seen whether the congressional actions will gain traction. A public hearing on the Proposed Regulations is scheduled for Dec. 1.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.