Growing scrutiny has put the Treasury Department on the defensive when issuing new tax regulations that can impact major areas of American life—from taxes on asset-shifting multinationals to donor-disclosure rules for nonprofits.
Key court decisions and greater White House oversight have spurred the change, driving Treasury to explain its decisions more fully and prove it has complied with rulemaking requirements, tax professionals and academics said.
The department’s explanations not only give taxpayers and their advisers insight into Treasury’s thinking, but can also strengthen Treasury’s defenses if rules are challenged in court.
In final rules (T.D. 9898) last month, ...