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Executive agencies, like the Treasury Department, get their authority to issue regulations from
laws enacted by Congress. Typically, when Congress creates an agency, that agency is given
general authority to regulate certain activity within the confines of that agency’s purpose.
While agencies do not enact or create actual law, they are empowered with creating rules to be
followed in furtherance of a particular enacted legal provision and for the enforcement of the
law. Consequently, although regulations are not technically laws, they carry significant
authority, and generally must be adhered to by the public.
Federal Rulemaking Procedures
The Federal Administrative Procedure Act sets forth the procedures that the IRS and other
federal agencies must follow to propose and establish regulations. Generally, regulations are
first published as proposed regulations in the Federal Register. The public is invited to
participate in the rulemaking process, and the IRS often holds public hearings on regulations it
has proposed. Based on the rulemaking record and public input, a proposed regulation may be
modified or withdrawn, or the agency may proceed with a final rule. Final regulations (and
temporary regulations) are published via Treasury Decisions (TDs) in the Federal Registe
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