On February 18 and 19, 2025, the White House issued two executive orders (E.O.s) aimed at agency regulatory actions, titled Ensuring Accountability for All Agencies (February 18 E.O.) and Ensuring Lawful Governance and Implementing the President's "Department of Government Efficiency" Deregulatory Initiative (February 19 E.O.). Previously, on January 31, 2025, the White House issued an E.O. titled Unleashing Prosperity Through Deregulation (January 31 E.O.), which directly impacts the Department of the Treasury and the Internal Revenue Service (IRS). These E.O.s come as part of the administration's ongoing efforts to reduce government spending and increase oversight over administrative agencies, and are a substantial shift in approach from the prior administration. 

As background, on April 11, 2018, Treasury and the Office of Management and Budget (OMB) entered into a Memorandum of Agreement (MOA), whereby tax regulatory actions were subject to review by the Office of Information and Regulatory Affairs (OIRA) within OMB in certain circumstances. In 2023, the Biden administration rescinded the 2018 MOA. The Trump administration then revitalized the 2018 MOA under section 6(c) of the January 31 E.O., returning to the prior status quo. The February 18 E.O. takes this a step further, requiring OIRA review for all "significant regulatory actions" undertaken by any agency. The February 18 E.O. also provides that no executive agency employee, in their official capacity, can advance an interpretation of law that contravenes that of the president or Attorney General (AG), including regulations, guidance, and litigating positions, unless authorized to do so. For Treasury and the IRS, this mandate is nothing new, as the AG can choose whether to defend an administrative interpretation through the Department of Justice's (DOJ) Tax Division.

The February 19 E.O. follows a similar vein, requiring all agencies, in coordination with the Department of Government Efficiency (DOGE) and OMB, to "initiate a process to review all regulations subject to their sole or joint jurisdiction for consistency with law and Administration policy." In particular, the E.O. outlines a series of "classes of regulations" that agencies should "identify," including, but not limited to: (1) regulations that are unconstitutional or raise serious constitutional difficulties, (2) those based on unlawful delegations of legislative power, and (3) those based on "anything other than the best reading" of the underlying statute. The E.O. emphasizes the third point, providing that "agencies shall preserve their limited enforcement resources by generally de-prioritizing actions to enforce regulations that are based on anything other than the best reading of a statute[.]" This mirrors language from the Supreme Court's decision in Loper Bright Enterprises v. Raimondo, 603 U.S. __ (2024), that states: "In an agency case as in any other, though, even if some judges might (or might not) consider the statute ambiguous, there is a best reading all the same—'the reading the court would have reached' if no agency were involved." 

These E.O.s reflect the administration's ongoing efforts to deregulate and increase administrative oversight, particularly in light of its "10-to-1" policy, whereby agencies must identify 10 rules, regulations, or guidance documents to repeal for every new rule, regulation, or guidance document that is promulgated. See Fact Sheet: President Donald J. Trump Launches Massive 10-1 Deregulation Initiative. Though the effects of these actions have yet to be seen, taxpayers and practitioners may see delays in the promulgation of guidance and regulatory packages and should closely monitor audit activity for changes in IRS personnel and posture on legal issues. 

For more information, please contact:

George A. Hani, ghani@milchev.com, 202-626-5953

Robert J. Kovacev, rkovacev@milchev.com, 202-626-5857

Omar M. Hussein, ohussein@milchev.com, 202-626-1578

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