Beyond Notice-and-Comment: The Making of the § 199A Regulations

72 Pages Posted: 9 Nov 2018 Last revised: 4 Dec 2018

See all articles by Shu-Yi Oei

Shu-Yi Oei

Boston College Law School

Leigh Osofsky

University of North Carolina (UNC) at Chapel Hill

Date Written: November 2, 2018


Congress passes a highly transformative but hastily drafted legal reform. Who comments in the regulatory process, when, and what are the implications? In this Article, we study these questions by examining how the regulatory process has unfolded in the case of § 199A, one of the central provisions from the monumental 2017 tax reform.

We document the comments that went into making the § 199A regulations from the time of legislative enactment through the hearing on the proposed regulations. We show that many comments were made before the proposed regulations were issued and the official administrative law notice-and-comment period had even opened. We examine how Treasury explicitly considered these comments in the proposed regulations. And we explore how these comments and other engagements—which were not wholly transparent to the public—shaped the proposed regulations and the subsequent conversation in the actual notice-and-comment period. We also investigate the role of indirect public dialogue and comments received after the official close of the notice-and-comment period.

Our study reveals that different commenters had different levels of access and opportunities to influence regulatory outcomes. Beyond notice-and-comment, there is both an inside and an outside track. The inside track offers advantages to parties who engaged directly with Treasury outside of notice-and-comment. The outside track consists of public dialogue that may offer an important, countervailing perspective, but is least entitled to agency consideration. This multi-track system is understandable in light of agency resource constraints and the need for timely real-world input, but it is also potentially problematic because it provides different participants different opportunities to obtain desired regulatory outcomes, and because it does not ensure the transparency necessary to protect the principles underlying open governance. We discuss ways to resolve this tension in administrative practice and further implications of our findings for the legislative and regulatory process and tax law development.

Keywords: 199A, tax policy, taxation, legislation, regulations, administrative law, notice-and-comment, partnership taxation, agencies, tax reform

JEL Classification: K23, K34, H20, H25, H26

Suggested Citation

Oei, Shu-Yi and Osofsky, Leigh, Beyond Notice-and-Comment: The Making of the § 199A Regulations (November 2, 2018). Boston College Law School Legal Studies Research Paper No. 493. Available at SSRN: or

Shu-Yi Oei (Contact Author)

Boston College Law School ( email )

885 Centre Street
Newton, MA 02459-1163
United States

Leigh Osofsky

University of North Carolina (UNC) at Chapel Hill ( email )

102 Ridge Road
Chapel Hill, NC NC 27514
United States

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