| 2010 Tax Year-In-Review | | | | Updated: December 27, 2010 2010 was a year in which a still-recovering economy generated a great number of major tax developments impacting taxpayers of all types: individuals, businesses, exempt organizations and more. Many of the developments were triggered by the passage of federal tax legislation; others by IRS rules and regulations; still others by important court cases. Some developments provided taxpayers with much-needed relief; others were aimed at helping the government collect needed revenues. CCH's Tax Briefing provides an overview of the key tax law developments of 2010 and their impact on taxpayers. | | |
| Congress Approves Small Business Tax Bill with $12 Billion in Tax Benefits | | | | Updated: September 23, 2010 Congress approved a package of enhanced small business tax incentives, as part of a larger Small Business Jobs Act of 2010, H.R. 5297. The Senate passed the measure on September 16, 2010. The House subsequently passed the legislation on September 23, 2010. The new law extends bonus depreciation, extends and doubles Code Sec. 179 expensing, provides for 100 percent gain exclusion for qualified small business stock, relaxes the S corp built-in gain conversion rules, allows five-year carrybacks of the general business credit for qualified taxpayers, removes cell phones from the listed property rules, enhances the deduction for start-up expenses, provides retroactive Code Sec. 6707A penalty relief, and allows a self-employment income tax deduction for 2010 health care expenses. Revenue raising provisions to help pay for these tax breaks include increased failure-to-file penalties on information returns, a controversial new information reporting rule for rental property expense payments, tightened U.S. sourcing on guaranteed fees, streamlined tax levies on federal contractors, accelerated estimated tax payments by certain large corporations, and more. | | |
| Sunsetting Provisions Create Challenges for Tax Planning | | | | Updated: September 13, 2010 Time is almost up for the historic tax cuts enacted by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). Without any Congressional action, many popular tax cuts automatically disappear ("sunset") after December 31, 2010. They will be replaced by rates, deductions, credits and other provisions based on the far less generous law in place before EGTRRA. Additionally, enhanced capital gains and dividends tax rates in the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) and subsequent legislation will also sunset after December 31, 2010. This CCH Tax Briefing alerts tax practitioners and their clients to what the Tax Code is scheduled to look like after EGTRRA's and JGTRRA's tax benefits sunset after December 31, 2010. | | |
| President Signs Homebuyer Credit Closing Relief With Revenue Offsets | | | | Updated: July 2, 2010 On July 2, 2010, President Obama signed the Homebuyer Assistance and Improvement Act of 2010, Pub. Law 111-198, into law. Frustrated over the progress of general extenders legislation, the House singled out homebuyer credit extension relief and approved it 409-5 in this stand-alone bill (H.R. 5623) on June 29, 2010. The Senate followed suit on June 30, approving H.R. 5623 by unanimous consent. The new law extends the closing date deadline, from June 30, 2010 to September 30, 2010, for homebuyers who signed sales contracts prior to May 1, 2010. To off set the estimated $140 million price tag of this relief, the new law includes three revenue provisions: a delay in the transfer of Travel Promotion Board fees, clarification of the bad check penalty for e-payments, and return disclosure authorization to prevent homebuyer credit fraud among prison inmates. | | |
| Senate Democrats Streamline Extenders Bill; Prune Revenue Raisers | | | | Updated: June 17, 2010 The Senate's Democratic leadership unveiled a streamlined version of the "American Jobs and Closing Tax Loopholes Act" (H.R. 4213) on June 16 hoping to secure bipartisan support. The revised Senate bill modifies two controversial revenue raisers: a change in the taxation of carried interest and the imposition of self-employment tax on S corps. The revised Senate bill keeps a package of tax extenders, many temporary individual, business, energy, charitable and infrastructure tax incentives which expired at the end of 2009. The Senate bill retains a package of pension funding reforms and makes some minor changes to international tax reforms. The revised Senate bill includes Code Sec. 6707A penalty relief and a taxpayer-friendly modification to the first-time homebuyer credit. | | |
| Congress Completes Overhaul Of Health Care Law; Makes Many Tax Changes | | | | Updated: March 30, 2010 Passage of the Health Care and Education Reconciliation Act of 2010 (H.R. 4872) (Reconciliation Act) by Congress, followed by its signing by President Obama on March 30, 2010, completes a massive overhaul of the nation's health insurance and health delivery systems. The Reconciliation Act amends the Patient Protection and Affordable Care Act of 2010 (P.L. 111-148), which President Obama signed on March 23. Combined, the two new laws include more than $400 billion in revenue raisers and new taxes on employers and individuals. | | |
| President Signs HIRE Act; New Law Provides Hiring Incentives, Expensing Extension And More | | | | March 18, 2010 The $18 billion job creation package, the Hiring Incentives to Restore Employment (HIRE) Act (H.R. 2847), is now law. President Obama signed this first major tax bill of 2010 on March 18. The Senate approved the HIRE Act on March 17, 2010, by a bi-partisan 68-29 vote, following House passage on March 4, 2010, by 217 to 201. The new law provides incentives for hiring and retaining workers, along with a one-year extension of enhanced Code Sec. 179 expensing and changes to Build America Bonds. The HIRE Act is partially offset by a package of new foreign account tax compliance rules and a further delay in the worldwide interest allocation rules. Certain corporate estimated tax payments are also accelerated to help offset the cost of the tax incentives. | | |
| Senate Passes Jobs Bill With Hiring Incentives, Expensing Extension | | | | Updated: February 24, 2010 Confronted with stubbornly high unemployment numbers and a slow economic recovery, the Senate on February 24 voted 70 to 28 to approve a $15 billion jobs bill, the Hiring Incentives to Restore Employment (HIRE) Act, H.R.2847. The HIRE Act provides new incentives for hiring and retaining workers, along with a one-year extension of enhanced Code Sec. 179 expensing and changes to Build America Bonds. The HIRE Act is partially offset by a package of new foreign account tax compliance rules. The HIRE Act does not include extenders, COBRA premium assistance or an estate tax extension. | | |
| New Law Allows 2010 Haiti Relief Contribution Deductions On 2009 Returns | | | | Updated: January 25, 2010. Taxpayers making charitable cash contributions in early 2010 to help Haiti after the devastating January 12 earthquake can claim a deduction on their 2009 federal tax returns. The House of Representatives unanimously passed H.R. 4462 on January 20 to allow taxpayers to claim a charitable deduction on their 2009 returns for qualified Haiti disaster relief contributions made after January 11, 2010 and before March 1, 2010. The Senate approved the measure on January 21, and President Obama promptly signed it into law on January 22. | | |
| Senate Passes Health Care Reform Legislation | | | | December 28, 2009. By a vote of 60-39, the Senate approved a massive health care reform bill on December 24, 2009 with over $390 billion in revenue raisers and new taxes on employers and individuals. The Patient Protection and Affordable Care Act (H.R. 3590) is a version of bills passed earlier by the Senate Finance Committee (SFC) and the Senate Health, Education, Labor, and Pensions (HELP) Committee. Although the Senate bill is similar in scope to the House-passed Affordable Health Care for America Act (H.R. 3962) many differences remain, especially over revenue raisers. | | |
| Estate Tax Extension Passes House, Fails In Senate; Carryover Basis To Be Effective January 1, 2010 | | | | December 28, 2009. On December 3, the House approved the Permanent Estate Tax Relief for Families, Farmers and Small Businesses Bill of 2009 (H.R. 4154), which would permanently extend the top federal estate tax rate of 45 percent with a $3.5 million exclusion ($7 million for married couples who fully utilize their exclusions). The House Bill also provides for continuation of the gift and generation-skipping transfer (GST) tax provisions as they exist in 2009. However, after several year-end parliamentary maneuvers, the bill failed to win support in the Senate, as did a temporary stop-gap measure to extend the 2009 estate tax regime through March 2010. | | |
| House Passes Permanent Estate Tax Relief Bill; Fate in Senate Uncertain | | December 4, 2009. The House on December 3, 2009, passed long-awaited legislation, the Permanent Estate Tax Relief for Families, Farmers and Small Businesses Bill of 2009 (H.R. 4154), permanently extending the top federal estate tax rate of 45 percent with a $3.5 million exclusion ($7 million for married couples who fully utilize their exclusions). The 225 to 200 vote reflected the urgency felt by some House lawmakers to provide certainty to estate planning and disagreement over whether to abolish the tax entirely or provide for a lower exclusion. The House Bill also provides for continuation of the gift and generation-skipping transfer (GST) tax provisions as they exist in 2009. The $233 billion cost over 10 years of the House Bill is not offset. Read CCH's Special Tax Briefing PDF For Full Coverage | | |
| House Passes Higher-Income Surtax,New Limits On FSAs, and More To Fund Health Care Reform | | November 9, 2009. Health care reform took a major step forward late on November 7 when the House passed, 220-215,a mammoth 2,000+ page bill overhauling health insurance coverage for Americans.The Affordable Health Care for America Act (H.R. 3962) imposes a new surtax on higher-income individuals expected to raise more than $400 billion over 10 years to help pay for nearly universal coverage. Read CCH's Special Tax Briefing PDF For Full Coverage | | |
| Treasury Releases "Green Book" of Tax Proposals | | May 14, 2009. The Obama administration released much-anticipated details about its proposed tax cuts and revenue raisers on May 11. The Treasury Department's General Explanations of the Administration's Fiscal Year 2010 Revenue Proposals (also known as the "Green Book") describes the administration's tax agenda, including permanent Making Work Pay, American Opportunity and research credits; a package of international tax reforms; reinstatement of the 36 and 39.6 percent individual marginal income tax rates; expanded information reporting; and automatic enrollment in IRAs. According to the Treasury, the proposals would generate $736.5 billion in savings for individuals (largely aimed at middle income taxpayers) and $71 billion in long-term savings for businesses. Revenue raisers would bring in roughly $900 billion. Read CCH's Special Tax Briefing PDF For Full Coverage | | |
| Congress Passes Emergency Pension Tax Relief/Technical Corrections | | December 11, 2008. In response to the continuing drumbeat of bad economic news, Congress passed theWorker, Retiree, and Employer Recovery Act of 2008 (H.R. 7327), suspending required minimum distributions (RMDs) from 401(k) plans, IRAs and similar retirement accounts for 2009, providing pension plan funding relief, and including technical corrections to thePension Protection Act of 2006. A $14 billion automaker rescue package, passed by the House on December 10, appears to be stalled in the Senate at this time. The White House has indicated that President Bush will sign the Worker, Retiree, and Employer Recovery Act as soon as it reaches his desk. Read CCH's Special Tax Briefing PDF For Full Coverage | | |
| President Signs Financial Markets Rescue Plan, AMT Patch, Extenders, Disaster Relief and More | | October 3, 2008. President Bush signed the historic Emergency Economic Stabilization Act of 2008, on October 3, 2008; the same day that the House passed the legislation by a vote of 263 to 171. The House vote came just two days after the Senate passed the measure by a vote of 74 to 25, and four days after the House failed to pass a similarly title bill. The landmark legislation gives the Treasury $250 billion immediately, and requires the president to certify if an additional $100 billion is necessary. An additional $350 billion may be disbursed subject to Congressional approval. The Treasury Department is required to report on the use of the funds and progress made in addressing the crisis. An oversight board and a special inspector general will also be created to watch over the Treasury department Read CCH's Special Tax Briefing PDF For Full Coverage Special Resources from CCH for Tax Legislation For additional CCH tax legislation resources, including white papers on the sub-prime lending crisis and SEC rules on short selling, please visit:http://www.cch.com/rescue/ CCH Books You Can Order Now: | | |
| President Signs the Housing and Economic Recovery Act of 2008 | | Updated: July 30, 2008. Reacting to the continuing slump in housing sales, along with rising unemployment numbers and weakness in the credit markets, Congress passed the Housing and Economic Recovery Act of 2008 (H.R. 3221). Although the tax provisions are only one part of the larger American Housing Rescue and Foreclosure Prevention Act, they make significant changes. The tax title includes $15.1 billion in tax incentives that are fully offset by far-reaching revenue raisers. While the tax incentives are targeted principally to home ownership and affordable housing, the offsets are collected from a variety of sources. New provisions that require credit card purchase information reporting by merchants and close a home sale exclusion loophole for vacation and rental property are among the more prominent offsets that will require a shift in tax strategies. President Bush signed the bill into law on Wednesday, July 30, 2008. Read CCH's Special Tax Briefing PDF For Full Coverage CCH Legislation Books You Can Order Now: Other CCH Books You Can Order Now: | | |
| President signs Economic Stimulus Act of 2008 With Rebates and Business Incentives | | Updated: February 13, 2008. President Bush signed into law the Economic Stimulus Act of 2008 (HR5140). The legislation, estimated to cost $125 billion over a ten-year period, includes a recover rebate credit for 2008. In addition to rebates, the new law includes $44.8 billion in business incentives that include generous expensing and bonus depreciation allowances, as well as additional help for homeowners facing foreclosure because of the mortgage meltdown. Read CCH's Special Tax Briefing PDF For Full Coverage | | | | |
| President Signs Two-Year Extension of Bush-Era Tax Cuts, Payroll Tax Relief, Estate Tax Compromise | | | | Updated: December 21, 2010 President Obama signed a multi-billion dollar tax cut package, the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (2010 Tax Relief Act) (P.L. 111-312), on December 17. The new law follows through on the framework agreed to December 6 by President Obama and GOP leaders in Congress. The 2010 Tax Relief Act extends the Bush-era individual and capital gains/dividend tax cuts for all taxpayers for two years. Th e bill also provides for an AMT "patch," a one-year payroll tax cut, 100 percent bonus depreciation through 2011 and 50 percent bonus depreciation for 2012, a top federal estate tax rate of 35 percent with a $5 million exclusion, and more. | | |
| President Signs Foreign Tax Reforms to Fund Education / Medicaid | | | | Updated: August 11, 2010 Returning briefly from its summer recess, the House on August 10 approved, by a 247 to 161 vote, a critical education and Medicaid funding bill, H.R. 1586, which includes a $9 billion package of international tax reforms. Wasting no time, President Obama signed the bill into law that same afternoon, on August 10, 2010, as Pub. Law 111-226. The Senate had approved the legislation earlier on August 5 by a 61 to 39 margin.
Riding the coattails of a popular measure to fund the jobs of well over 100,000 teachers and first responders, as well as help states fund Medicaid shortfalls, the international tax provisions provide the bulk of the bill's revenue off sets needed under Congressional “pay-go” rules. The bill also adds another $1.1 billion in revenue by eliminating the advance payment option for the earned income credit (EIC). | | |
| President Signs Doc Fix/Pension Funding Relief Bill | | | | Updated: June 25, 2010 On June 25, President Obama signed the Preservation of Access to Care for Medicare Beneficiaries and Pension relief Act of 2010 (H.R. 3962) a package of defined benefit pension funding relief measures and the so-called Medicare "doc-fix." The pension funding measures in the bill were originally part of the American Jobs and Closing Tax Loopholes Act of 2010 (H.R. 4213), a/k/a the tax extenders bill. | | |
| House Passes Small Business Tax Relief Package | | | | June 16, 2010 A package of small business tax incentives was passed by the House on June 15, 2010 by a vote of 247 to 170. The Small Business Jobs Tax Relief Act of 2010 (H.R. 5486) includes a 100 percent gain exclusion for qualified small business stock, retroactive Code Sec. 6707A penalty relief and an enhanced deduction for startup expenses. The House bill is completely off set by new limitations on grantor retained annuity trusts (GRATs) and the cellulosic biofuel producer credit along with a shift in corporate estimated taxes for large corporations in 2015. | | |
| President Signs Health Care Reform; Senate Reconciliation Vote Next | | | | Updated: March 23, 2010 President Obama on March 23 signed the massive health care reform package approved by the House on March 21, 2010. The Patient Protection and Affordable Care Act (the Patient Protection Act), approved by the Senate on December 24, 2009, is now law. It contains over $400 billion in revenue raisers and new taxes on employers and individuals. The House also passed on March 21 H.R. 4872, the Health Care and Education Tax Credits Reconciliation Act of 2010 (the House Reconciliation Act). The House Reconciliation Act serves as a "sidecar" bill, that will allow amendments to the Patient Protection Act to be passed by the Senate with only 51 votes using the budget reconciliation rules. | | |
| 2010 Hiring Incentives to Restore Employment Act | | | | March 10, 2010 The Senate approved a nearly $140 billion "tax extenders" package on March 10 by a vote of 62 to 36. The American Workers, State and Business Relief Act of 2010 (H.R. 4213) extends a host of popular but temporary individual, business, charitable, and energy tax incentives through December 31, 2010. The Senate bill also extends eligibility for COBRA premium assistance through December 31, 2010, provides for pension funding relief, allows workers over age 59-1/2 to convert 401(k) distributions to Roth 401(k) plans, and adds a technical modification to the popular first-time homebuyer tax credit, among its list of changes. The Senate extenders bill is partially paid for by codification of the economic substance doctrine and reform of the cellulosic biofuel producer credit. | | |
| Obama Unveils $3.83 Trillion Budget; Tax Proposals Focus On Job Creation, Revenue | | | | February 5, 2010 President Obama presented Congress with his fiscal year (FY) 2011 federal budget proposals on February 1, and the $3.83 trillion budget emphasizes job creation and deficit reduction. Tax incentives for individuals and businesses total approximately $300 billion with an additional $100 billion allocated to job creation. On the other hand, proposed tax increases would raise $1.4 trillion. Although rate increases for higher-income taxpayers would bring in the lion's share of that revenue, the budget calls for over $450 billion in other revenue raisers. Those increases impact many categories of taxpayers but, perhaps most directly, those with international operations. | | |
| IRS Unveils Comprehensive Preparer Reform Blueprint | | | | January 14, 2010. After six months of internal study, review of hundreds of comments and a series of public meetings, the IRS has announced a sweeping reform of return preparer oversight. All paid signing preparers, regardless of credentials or licenses, will be required to register with the IRS. Unenrolled preparers will be required to complete competency testing and mandatory continuing education. On January 4, the IRS released a blueprint of its new preparer initiative and indicated that regulations necessary to implement the changes would be released in 2010. | | |
| House-Passed Extenders/Jobs Bills Await Senate Action in 2010 | | December 28, 2009. The House of Representatives approved a package of tax extenders on December 9, 2009, by a largely party-line vote of 241 to 181. The $31 billion Tax Extenders Act of 2009 (H.R. 4213) extends more than 50 popular, but temporary, tax incentives through December 31, 2010. Two revenue raisers - a change in the taxation of carried interest and heightened information reporting and disclosure requirements for foreign bank and financial accounts - would pay for the one-year extensions. Read CCH's Special Tax Briefing PDF For Full Coverage | | |
| House Passes Extenders Bill With Carried Interest, Foreign Reporting Revenue Raisers | | December 10, 2009. The House of Representatives approved a package of tax extenders on December 9, 2009, largely along party lines by a vote of 241 to 181. The $31 billion Tax Extenders Act of 2009 (H.R. 4213) extends more than 50 popular but temporary tax incentives through December 31, 2010. Most of the incentives would have expired after December 31, 2009. Two revenue raisers - a change in the taxation of carried interest and heightened information reporting and disclosure requirements for foreign bank and financial accounts - would pay for the one-year extensions. President Obama has indicated he will sign the extenders bill as passed by the House, but the bill's fate is uncertain in a Senate focused almost exclusively on heath care reform. Read CCH's Special Tax Briefing PDF For Full Coverage | | |
| Senate Health Bill Calls For Excise Tax On Insurance Plans, Added Payroll Tax On High-Wage Earners | | November 19, 2009. Health care reform took another major step forward on November 18 when Senate Democratic leaders unveiled the Patient Protection and Affordable Care Act. The bill is a blended version of bills passed earlier by the Senate Finance Committee (SFC) and the Senate Health, Education, Labor, and Pensions (HELP) Committee. The $849 billion package, with $370 billion in revenue raisers, was drafted not only with an eye toward garnering the 60 votes necessary for full Senate approval but also in preparation for conference committee negotiations. Although the Senate bill is similar in scope to the House-passed Affordable Health Care for America Act (H.R. 3962) many differences remain, especially over revenue raisers. Read CCH's Special Tax Briefing PDF For Full Coverage | | |
| Worker, Homeownership, and Business Assistance Act of 2009 | | November 6, 2009. Two popular but temporary tax incentives have been given a new lease on life as part of legislation extending unemployment compensation benefits. The Worker, Homeownership, and Business Assistance Act of 2009 (H.R. 3548), signed into law by President Obama on November 6, 2009, extends those incentives and more. Following several weeks of negotiations, the new law was approved in rapid-fire succession, first by the Senate, 98-0,on November 4 and then by the House,403-12, on November 5. Read CCH's Special Tax Briefing PDF For Full Coverage | | |
| President-Elect Obama Brings Ambitious Tax Policy Agenda to Washington | | December 4, 2008. On January 20, 2009, Barack Obama will take the oath of office as the 44th president of the United States. Federal tax policy is guaranteed to be at the forefront of President Obama's agenda. Democrats in Congress are preparing an economic stimulus package, which they hope to have ready for the new president's signature on January 20. It is likely to include significant individual and business tax incentives. The stimulus package may also include tax incentives for individuals and businesses to "go green" along with a huge infusion of federal funds for state and local infrastructure spending. The president-elect is counting on a stimulus package large enough to jolt the economy out of what some are calling the worse slowdown since the 1930s. One way to jump start the economy in the view of the incoming administration is to get more money into taxpayers' hands, thereby increasing the consumer spending needed to drive the economy. Read CCH's Special Tax Briefing PDF For Full Coverage CCH Books You Can Order Now: | | |
| Presidential Candidates Outline Tax Policies | | September 18, 2008. As the U.S. prepares to elect its 44th president, tax and accounting professionals and their clients are looking for details about the tax policies of the candidates of the two major parties. This special CCH Briefing describes the tax policies of John McCain, the Republican Party candidate for president, and Barack Obama, the Democratic Party candidate, with analysis of the potential impact of their tax policies. Whoever is elected on November 4 will likely unveil his tax policies soon after taking office so Congress can begin holding hearings and drafting legislation. Once Congress begins its work, practitioners and taxpayers can expect to see more details about changes in federal tax policy. The track record for newly-elected presidents to get a large tax bill passed during their first year in office is good. That makes 2008 year-end tax planning especially challenging and urgent since the door may close after this year on many current tax breaks. Read CCH's Special Tax Briefing PDF For Full Coverage CCH Resources Now Available: | | |
| Congress Enacts Farm Bill Overriding Bush Veto And Passes Military Tax Relief | | May 22, 2008. The Food, Conservation, and Energy Act of 2008 (H.R. 2419), also known as the Farm Bill, has finally been enacted into law. The Senate on May 22 successfully overrode President Bush's May 21 veto of the bill by a convincing 82-13 vote. The House overrode the veto the day earlier immediately after the president's veto by a lopsided margin of 316-108. Due to an enrollment error, however, the legislation contained only 14 of the 15 titles when the House and Senate adopted the conference report on the bill on May 14 and 15, respectively. Nevertheless, the tax title was included in the legislation sent to the President and in the override votes by Congress. It is not clear at press time if the procedural mix-up will result in litigation challenging the legislation. Read CCH's Special Tax Briefing PDF For Full Coverage CCH Legislation Books You Can Order Now: Other CCH Books You Can Order Now: | | | |
CCH Community
Facebook
LinkedIn
Twitter
YouTube