Payroll tax deferral plan subject to challenge under Congressional Review Act, GAO confirms

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On September 15, the Government Accountability Office (GAO) sent a letter to U.S. Senate Minority Leader Chuck Schumer (D-N.Y.) and Senator Ron Wyden (D-Ore.) clarifying that a recent IRS guidance document was subject to challenge through the Congressional Review Act (CRA).

The IRS guidance related to a presidential memorandum issued by President Donald Trump on August 8 that directed the Secretary of the Treasury to defer payroll tax collection for workers who make less than $4000 per paycheck between September and December 2020.

On September 4, U.S. Representative John Larson (D-Conn.) introduced a resolution of disapproval under the CRA in an attempt to block the IRS guidance from going into effect. As of September 18, the resolution had 28 cosponsors, all members of the Democratic Party.

Larson argued in a press release that Trump’s deferral policy “is the first step towards a long-time conservative dream to end Social Security as we know it. This is a direct attack on our country’s most popular program that must be stopped.” The administration argued that the deferral would “put money directly in the pockets of American workers and generate additional incentives for work and employment.”

The CRA gives Congress a chance to review and reject any new regulatory rules created by federal administrative agencies. Since the law’s creation in 1996, 17 out of the over 90,767 rules published in the _Federal Register_ during that time have been repealed using the CRA. To block the IRS guidance, both houses of Congress would have to pass a CRA resolution of disapproval and get President Trump to sign it into law.

To learn more about the Congressional Review Act or guidance documents, see here:
Congressional Review Act
Guidance (administrative state)

Additional reading:
Presidential memorandum
Administrative state
Federal government responses to the coronavirus (COVID-19) pandemic, 2020
U.S. Government Accountability Office
Internal Revenue Service