HJRES 65119th CongressIn Committee

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.

Introduced: Feb 27, 2025

Standard Summary

Comprehensive overview in 1-2 paragraphs

H. J. Res. 65, introduced in the 119th Congress, provides for congressional disapproval under the Congressional Review Act (chapter 8 of title 5, U.S.C.) of the Internal Revenue Service’s rule titled “Rules for Supervisory Approval of Penalties” (published December 23, 2024 as 89 Fed. Reg. 104419). If enacted, the joint resolution would block the rule from taking effect and prevent the IRS from enforcing it, effectively returning to prior penalty procedures unless Congress later changes them through statute. The bill is currently in the House, referred to the Ways and Means Committee, with sponsors Mr. Grothman, Mr. McClintock, and Mr. Steube.

Key Points

1This is a joint resolution using the Congressional Review Act to disapprove a specific final IRS rule.
2The targeted rule is the IRS rule titled “Rules for Supervisory Approval of Penalties,” published December 23, 2024 (89 Fed. Reg. 104419).
3If enacted, the rule would have no force or effect; the IRS would not implement it and would continue under prior penalty procedures.
4The bill’s path: introduced February 27, 2025, referred to the Committee on Ways and Means in the House; requires passage by both chambers and presidential signature to become law.
5Context: The Congressional Review Act gives Congress a window (typically 60 legislative days after a rule’s publication) to disapprove new federal regulations; a disapproval resolution blocks the rule and generally prevents the agency from issuing a substantially similar rule in the near term.

Impact Areas

Primary group/area affected- Taxpayers (individuals and businesses) who may be subject to IRS penalties, and tax practitioners who advise them; and IRS enforcement personnel who apply penalty rules.Secondary group/area affected- IRS administrative and compliance processes, including how penalties are reviewed and approved within the agency; sectors with penalties tied to compliance risk (e.g., financial services, small businesses).Additional impacts- The resolution represents an example of congressional oversight over agency rulemaking under the CRA and could influence how the IRS designs future penalty-related procedures.- If the rule is blocked, the IRS might need to reconsider its penalty approval framework in subsequent rulemaking or revert to prior practices, affecting penalty administration timelines and decisions.

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