The Treasury Department during the Biden administration used its final months to finalize or correct several IRS regs, including guidance implementing clean energy provisions under the Inflation Reduction Act (P.L. 117-169). But should the Republican-controlled Congress and President Trump seek to overturn the previous administration’s rules, there are procedures in place that could have regs issued as early as last August on the chopping block.
Congressional review. The Congressional Review Act (CRA; 5 U.S.C. §§801- 808) is a tool that provides Congress a pathway to potentially overturn actions by federal agencies. Lawmakers can put forth a joint resolution of disapproval to overturn rules legislatively, pursuant to CRA procedures.
Both chambers must approve a joint resolution of disapproval, which then goes to the president’s desk to be signed. Submitted CRA rules are also reviewed by the Government Accountability Office.
As explained by the Congressional Research Service (CRS), the CRA “applies to final rules, including major rules, nonmajor rules, and interim final rules.” Successful CRA joint resolutions overturn rules “immediately.” Rules that already became effective are treated as if they had never taken effect, and rules that had not yet taken effect do not go into effect.
Timing. Once a rule is published in the Federal Register, the CRA “establishes specific time periods during which Congress can introduce and act on a joint resolution that, if enacted, would disapprove the rule,” per the CRS.
The “introduction” period refers to the 60-calendar-day period when joint resolutions of disapproval may be introduced. This excludes days when either chamber has adjourned via concurrent resolution.
The “discharge” period is a 20-calendar-day window for senators to petition committees to no longer consider a disapproval resolution. A petition must include 30 senator signatures.
The “Senate action” period lasts 60 days of a Senate session. During that time, disapproval resolutions may be considered by the Senate under “fast track” procedures where resolutions are voted on with a simple majority threshold.
All three periods occur simultaneously and begin upon a rule’s receipt and publication.
Lookback mechanism. The CRA also provides that for rules submitted to Congress with “either fewer than 60 days of Senate session or fewer than 60 legislative days in the House before Congress adjourns its session sine die, a new period for congressional review of that rule becomes available in the following session of Congress,” according to the CRS.
These so-called lookback rules are treated as if they were submitted and published on the 15th House legislative day or Senate session day of the new congressional session. Under the lookback rule, the 15th day is treated like it is the first time a CRA rule had been received and published. The three time periods start over.
The lookback provision, the CRS said, “is intended to prevent any Administration from waiting until just before Congress adjourns a session to submit rules to the House and Senate, denying them the full period contemplated by the CRA to review those rules.”
Possible Biden CRA rules. The CRS estimated that the 2024 lookback period is August 1, 2024. Checkpoint compiled a list of IRS final regs and correction notices issued after that date.
See here for the complete list, which includes publication dates (sorted oldest to newest), Treasury Decision numbers, and corresponding Federal Register information.
In total, Checkpoint identified 28 final IRS regs that may fall within the lookback period. Below are some highlights:
- Code Sec. 48D Advanced Manufacturing Investment Credit final regs (TD 10009, 10/23/2024)
- Code Sec. 45X Advanced Manufacturing Production Credit final regs (TD 10010, 10/28/2024)
- Note: During the 118th Congress, Senators Tom Cotton (R-AR) and Rick Scott (R-FL) introduced a joint resolution of disapproval (S.J.Res. 119) to overturn this rule.
- Code Sec. 48 Energy Credit final regs (TD 10015, 12/12/2024)
- Digital asset “middleman” final regs for Code Sec. 6045 broker purposes (TD 10021, 12/30/2024)
- Note: On January 21, Representative Mike Carey (R-OH) introduced a joint resolution of disapproval (H.J.Res. 25) to overturn this rule, as did Senator Ted Cruz (R-TX) (S.J.Res. 3).
- Final regs on the Code Sec. 45Y Clean Electricity Production Credit and the Code Sec. 48E Clean Electricity Investment Credit (TD 10024, 1/15/2025)
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