"...regulations will still be in place..."
Are you arguing that the FairTax will not effectively repeal the Internal Revenue Code? If the Statute is repealed, why do you believe the supporting regulations will have any import?
While I could make a point a good portion of the IRS code is left in place (the Fairtax bill repeals selected sections not the whole code), that was not my point. When you say compliance costs AND regulations costs, I assumed he was talking about regulations outside of the IRS code like OSHA or something. Otherwise he is just being redundant with his terms.