2014 Post-Filing Season Update

Updated: April 17, 2014

With all the focus on compliance during the return filing season, practitioners and their clients may have only skimmed some of the impor- tant federal tax developments that have oc- curred since the start of 2014. This Briefing is designed to bring you up to speed on fed- eral tax developments in January, February, March and early April 2014, with pointers on how these developments may unfold, and how they may affect taxpayers and the next filing season. So far this year, the IRS, other federal agencies and the courts have issued guidance on individual and business taxa- tion, retirement savings, foreign accounts, the Affordable Care Act, and much more.


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Fiscal Year 2015 Federal Budget Proposals

Updated: March 7, 2014

President Obama renewed his call for expanding child, family and education tax credits in his fiscal year (FY) 2015 budget proposals as well as for curbing some tax preferences for higher income individuals and businesses. The President unveiled his $3.9 trillion FY 2015 budget proposals on March 4. Many of the proposals are familiar from past budgets, but for FY 2015 the White House is placing special emphasis on passing tax reform for families and lower income individuals.


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CCH Special Report: Comprehensive Analysis of Final Repair/Capitalization Reg and Proposed MACRS Disposition Regs

Updated: February 17, 2014

Our CCH Special Report provides a comprehensive review of the IRS’s final repair regulations and the related rules for changes to permitted or required accounting methods. recently released guidance that explains how to change to accounting methods required or permitted by the). Taxpayers must comply with the regs beginning in 2014, but may apply them retroactively. This Special Report brings all the important issues together in one place.


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2013 Tax Year-In-Review

Updated: January 3, 2014

2013 was an eventful year for federal tax developments, notable from its onset by passage of the American Taxpayer Relief Act of 2012 (ATRA), which permanently extended the Bush-era tax cuts for all but higher-income taxpayers as well as numerous other important, but previously temporary, provisions. The year also saw an ample release of important guidance relating to the Affordable Care Act, the new Net Investment Income tax and Additional Medicare Tax, capitalization and repairs, the tax treatment of married same-sex couples and much more. In international taxation, the IRS won several important victories in the federal courts relating to international financial transactions used as tax shelters. The IRS also stepped up investigations of U.S. persons who may be hiding funds in undisclosed offshore accounts and continued to implement the Foreign Account Tax Compliance Act (FATCA) by releasing rules and regulations, draft forms and signing intergovernmental agreements.


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IRS Releases Final Regulations on Net Investment Income and Additional Medicare Taxes

Updated: December 3, 2013

Recently released final regulations aim to clarify the Code Sec. 1411 3.8 percent Net Investment Income (NII) tax and Code Sec. 3101(b)(2) 0.9 percent Additional Medicare Tax. The much anticipated NII final regulations come nearly one year after the IRS issued proposed reliance regulations.

Clarifications in the final NII regulations cover income, estimated taxes, real estate rental activities, regrouping under Code Sec. 469, trusts and estates, and much more. The IRS will generally allow taxpayers to rely on either the NII proposed regulations or the final regulations for tax years beginning before January 1, 2014. The final Additional Medicare Tax regulations generally track the proposed regulations with some clarifications for employers. Additionally, the IRS released proposed regulations on the calculation of NII regarding certain types of property, as well as taking a different approach to a much-criticized deemed sale rule for dispositions of active interests in partnerships and S corporations.


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Analysis of Comprehensive Repair/Capitalization Final Regulations

Updated: September 20, 2013

The IRS has released much-anticipated final “repair” regulations (T.D. 9636) governing when taxpayers must capitalize and when they can deduct their expenses for acquiring, maintaining, repairing and replacing tangible property. The final regulations make significant taxpayer-friendly changes to the 2011 temporary regulations. Compliance with the labyrinth of rules in the final regs, however, will challenge virtually every business, especially in light of an approaching January 1, 2014 effective date.


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IRS Guidance on Same-Sex Marriage

Updated: September 03, 2013

All legally married same-sex couples will be treated as married for federal tax purposes whether or not the couple lives in a jurisdiction that recognizes same-sex marriage, the IRS announced on August 29. The ruling, issued two months after the U.S. Supreme Court struck down Section 3 of the Defense of Marriage Act (DOMA) in E.S. Windsor (2013-2 ustc ¶50,400, June 26, 2013), affects all federal taxes, including income taxes, estate and gift taxes, payroll taxes associated with employee spousal benefits, and more.


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Supreme Court Strikes Down DOMA

Updated: June 27, 2013

In a 5 to 4 decision, the United States Supreme Court has found that Section 3 of the federal Defense of Marriage Act (DOMA) violates the equal protection clause of the Fifth Amendment of the U.S. Constitution as applied to persons of the same sex who are legally married under the laws of their state (Windsor, S.Ct., June 26, 2013, 2013-2 ustc ¶50,400). The majority, written by Justice Anthony Kennedy, held that DOMA is unconstitutional as a deprivation of the liberty of the person protected by the Fifth Amendment of the Constitution.


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Senate Passes Marketplace Fairness Act

Updated: May 07, 2013

The U.S. Senate has overwhelmingly, and with strong bipartisan support, passed the Marketplace Fairness Act of 2013 (the Act) by a vote of 69-27. The bill would allow a state to require certain remote sellers to collect sales and use tax on sales made to customers in the state. States that are members of the Streamlined Sales and Use Tax Agreement (SST) would automatically be granted this authority. States that are not SST members would be required to implement simplification requirements. The bill provides an exception for businesses with annual remote sales of $1 million or less.


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Fiscal Year 2014 Federal Budget Proposals

Updated: April 12, 2013

President Obama released a $3.77 billion fiscal year (FY) 2014 federal budget on April 10, 2013, with a mix of individual and business tax proposals intended to raise revenue, reduce spending and encourage negotiations between the White House and the GOP on comprehensive tax reform. President Obama called for a 28 percent cap on itemized deductions, a $3 million limit on tax-preferred retirement savings, a permanent research tax credit, a permanent American Opportunity Tax Credit (AOTC), a change in the taxation of carried interest, and more. President Obama also provided for the first time specifics on the so-called Buffet Rule. Following release of the President's FY 2014 budget recommendations, the Treasury Department issued its customary “Green Book,” describing the proposals.


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2012 Tax Year-In-Review

Updated: January 10, 2013

Uncertainty during 2012 over what tax laws would govern in 2013 and beyond because of the expiring Bush-era tax cuts clearly was the most significant development of the year. Now that Congress and President Obama — through the American Taxpayer Relief Act of 2012 (ATRA) — have provided a degree of certainty over tax rates into at least the immediate future, taxpayers need to adjust their tax plans accordingly. Individuals and businesses should immediately recalibrate strategies in light of ATRA. 2012 was also a significant year for important tax developments from the Treasury Department, the IRS and the courts. These developments demand the attention of individual and business taxpayers not only to caution what is no longer allowed under the tax laws but also to shape what steps can be taken in 2013 and beyond to maximize tax savings. With that forward-looking perspective, this Tax Briefing reviews key federal tax developments that took place during 2012.


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President Signs Eleventh-Hour Agreement To Avert Fiscal Cliff

Updated: January 3, 2013

The tax side of the “Fiscal Cliff” has been averted. The U.S. Senate overwhelmingly passed legislation to avert the so-called fiscal cliff on January 1, 2013 by a vote of 89 to 8, sending the American Taxpayer Relief Act of 2012 (HR 8, as amended by the Senate) to the House, where it was similarly approved on January 1, 2013 by a vote of 257 to 167. The American Taxpayer Relief Act allows the Bush-era tax rates to sunset after 2012 for individuals with incomes over $400,000 and families with incomes over $450,000; permanently “patches” the alternative minimum tax (AMT); revives many now-expired tax extenders, including the research tax credit and the American Opportunity Tax Credit; and provides for a maximum estate tax of 40 percent with a $5 million exclusion. The bill also delays the mandatory across-the-board spending cuts known as sequestration. President Obama signed the bill into law on January 2, 2013.


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Analysis of Post-2012 Net Investment Income and Additional Medicare Taxes

Updated: December 07, 2012

The IRS has issued long-awaited and much-needed proposed reliance regulations on the operation of the two new surtaxes imposed under 2010 health care legislation: the 3.8 percent Net Investment Income (NII) Tax under Code Sec. 1411 and the 0.9 percent Additional Medicare Tax under Code Secs. 3101(b)(2) and 1401. Both surtaxes are scheduled to spring into full effect on January 1, 2013. The proposed reliance regs — and frequently asked questions (FAQs) on the IRS website — seek to address many of the gaps in application of these surtaxes that have been questioned by tax professionals, employers and taxpayers. At the same time, the proposed reliance regs create new questions about application of the surtaxes. The guidance on each of these new surtaxes is extensive and is immediately critical for affected taxpayers.


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Related Product

UPDATED: Analysis of Comprehensive Repair/Capitalization Regulations

Updated: November 30, 2012

Repair Regulations Have sweeping impact; Will Require Accounting Method Changes; 2014 Effective Date Extension Announced. Almost a year after the IRS issued temporary “repair” regulations (T.D. 9564), many complex questions remain about their interpretation and application. One thing is for sure however; they affect all businesses in one way or another. Accordingly, it is vital to become intimately familiar with their content to understand how each client is affected.


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2012 Post-Election Tax Policy

Updated: November 08, 2012

President Obama secured a second term in office November 6, 2012, in the end winning the Electoral College by a wide margin. The President's re-election now sets in motion what will likely be difficult negotiations between Democrats and Republicans over the fate of the Bush-era tax cuts, nearly $100 billion in automatic spending cuts, and the more than 50 expiring tax extenders, which include the alternative minimum tax (AMT) patch for tens of millions of taxpayers. The President's re-election has also significantly changed the dynamics for reaching an eventual agreement over long-term tax reform.


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2012 Year-End Tax Planning

Updated: October 4, 2012

Year-end tax planning is always complicated by the uncertainty that the following year may bring and 2012 is no exception. Indeed, year-end tax planning in 2012 is one of the most challenging in recent memory. A combination of events — including possible expiration of some or all of the Bush-era tax cuts after 2012, the imposition of new so-called Medicare taxes on investments and wages, doubts about renewal of many tax extenders, and the threat of massive across-the-board federal spending cuts — have many taxpayers asking how can they prepare for 2013 and beyond … and what to do before then. The short answer is to quickly become familiar with the expiring tax incentives and what may replace them after 2012... and to plan accordingly. Year-end planning for 2012 requires a combination of multi- layered strategies, taking into account a variety of possible scenarios and outcomes.


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Presidential Candidates Outline Tax Policies

Updated: September 11, 2012

On November 6, 2012, Americans will elect the occupant of the White House for the next four years. As President of the United States, he will play a major role shaping tax policy and possibly reforming the entire Tax Code. This special CCH Briefing describes the tax policies of President Barack Obama, the Democratic Party candidate for President, and former Governor Mitt Romney, the Republican Party candidate for President, with analysis of the potential impact of their tax positions both for the immediate future and for 2014 and beyond.


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Analysis of Comprehensive Repair/Capitalization Regulations

Updated: August 21, 2012

More than six months after the IRS issued temporary "repair" regulations (T.D. 9564), many complex questions remain about their interpretation and application. One thing is for sure however; they affect all businesses in one way or another. Accordingly, it is vital to become intimately familiar with their content to understand how each client is affected.

The IRS initially reported it wants to make as few substantive changes as possible when it issues final regulations. However, the regulations have been subject to much criticism over the past several months because they often rely on facts-and- circumstances tests in distinguishing repairs from capitalized expenses. This is the approach that caused conflicts between the IRS and taxpayers in the first place. As a result, the IRS is under pressure to further simplify the regulations with additional bright-line tests and safe-harbors. How the IRS responds to this pressure remains to be seen.


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Supreme Court Upholds Health Care Law; All Tax Measures Preserved

Updated: June 29, 2012

The U. S. Supreme Court has upheld the constitutionality of the 2010 health care reform legislation, including its linchpin individual mandate that requires individuals to pay a penalty if they fail to carry minimum essential health insurance (National Federation of Independent Business, et al. v. Sebelius, SCt, 2012-2 USTC ¶50,423). In its landmark 5 to 4 decision handed down on June 28, 2012, the Court cleared the path for President Obama's signature health care law, the Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act (HCERA), to move forward on schedule. However, the mechanism used to force states to expand Medicaid eligibility did not pass constitutional muster.


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Sunset of 2001 & 2003 Tax Cuts and Benefits

Updated: May 4, 2012

The year 2012 began with the fate of the Bush-era tax cuts uncertain, and no resolution appears in sight. Democrats and Republicans remain far apart on whether to extend all or some of the Bush-era tax cuts and other tax incentives scheduled to sunset after 2012. Two years ago, President Obama and the GOP agreed to extend the Bush-era tax cuts along with the so-called tax extenders in the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (2010 Tax Relief Act). Today, prospects for any agreement between Democrats and Republicans before the November elections are murky at best. The likelihood of a lame-duck Congress deciding the fate of the Bush-era tax cuts increases daily. Also growing daily is the uncertainty many taxpayers face in tax planning for 2013 and beyond.


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President Proposes Framework for Business Tax Reform

Updated: February 24, 2012

A reduced corporate tax rate, elimination of many business tax preferences, a new minimum tax on overseas profits, and much more are all part of President Obama's recently released Framework for Business Tax Reform (the "Framework"). The much-anticipated blueprint of the administration's plans for corporate tax reform was unveiled on February 22, 2012 in Washington, D.C.

The Framework contains a large number of general proposals which, according to the administration, will make the Tax Code less complicated for businesses and increase the nation's competitiveness in the global economy. A reduction in the corporate tax rate would be fully paid for by repeal of business tax preferences. The Framework also calls for a new minimum tax on overseas profits and encourages companies to return work to the U.S. by offering a new relocation tax incentive.


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President Signs 2012 Payroll Tax Holiday Extension

Updated: February 22, 2012

President Obama on February 22, 2012, signed into law a much-anticipated extension of the employee-side payroll tax cut through the end of 2012. After weeks of uncertainty over whether an agreement could be reached, the House passed the Middle Class Tax Relief and Job Creation Act of 2012 (H.R. 3630) by a vote of 293 to 132 on February 17, 2012. Senate approval quickly followed, also on February 17, by a vote of 60 to 36. Lawmakers agreed not to require the $93.2 billion estimated cost for the payroll tax cut extension to be offset by revenue-raising provisions. A potential impasse over revenue increases was avoided entirely when both parties agreed to offset costs of the full-year, two percentage point payroll tax cut through transfers from the general fund of the Treasury to the OASDI trust fund. In a revenue neutral provision, however, the new law eliminates a timing-shift in the estimated tax payments that had been required of certain large corporations under previous laws. Non-tax provisions within the new law extend unemployment benefits and implement a "doc fix" for Medicare. President Obama signed the bill as soon as it reached the White House.


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President Obama Releases FY 2013 Federal Budget Proposals

Updated: February 17, 2012

President Obama proposed a fiscal year (FY) 2013 federal budget on February 13, 2012 containing approximately $1.5 trillion in revenue raisers. The budget reiterates the President's longstanding opposition to extending the Bush-era tax cuts for higher income individuals, proposes to extend or make permanent a number of temporary tax credits and deductions and introduces some new tax incentives. The President's proposals impact individuals, businesses, exempt organizations, multi- nationals, and taxpayers of all types. The FY 2013 budget and explanations by the Treasury Department also flesh out some of the President's tax proposals in his January 24, 2012 State of the Union address and his "Blueprint for an America Built to Last." Some proposals, such as the Buffett Rule and a proposed minimum tax on overseas profits, are left for further explanation later in this process.


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2011 Tax Year-In-Review

Updated: December 27, 2011

2011 had been predicted to be a quiet year in federal tax news – as it landed between major tax legislation in 2010 and expected tax reform in 2012 – but the year brought many significant tax developments from the Obama Administration, Congress, the Treasury Department, the IRS, and the courts. President Obama signed bills enacting hiring incentives, repealing three percent government withholding, and more. Congress initiated a national conversation on the pros and cons of tax increases, tax reform, and deficit reduction, which will frame tax proposals for 2012 and beyond. The IRS issued a steady stream of much-needed guidance for businesses and individuals, ratcheted up its attention on tax compliance, particularly in the international area, and continued its multi-prong initiative on return preparer oversight. Meanwhile, the Tax Court and other federal courts handed down decisions of their own, impacting rules for many other taxpayers.

This Tax Briefing provides a review of the key tax law developments of 2011 and more.


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President Signs 3% Withholding Repeal and Job Creation Act

Updated: November 21, 2011

President Obama signed the Three Percent Withholding Repeal and Job Creation Act on November 21. The new law repeals three percent withholding on government contractors and expands tax incentives to encourage employers to hire military veterans. The new law also expands the IRS’s continuous levy authority, extends authority for the U.S. Department of Veterans Affairs (VA) to obtain information from the IRS and directs the Treasury Department to prepare a report on how to reduce the tax gap owed by federal contractors. HR 674 passed overwhelmingly in the Senate on November 10 by a vote of 95 to 0 and in the House on November 16 by a vote of 422 to 0.

The $12.8 billion cost of repeal of government withholding and the veterans’ tax incentives is off set by modifying the calculation of modified adjusted gross income (AGI) for determining certain federal health care program eligibility, as well as delaying scheduled reductions in fees for VA mortgage applications.


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White House Tax and Deficit Reduction Proposals

Updated: September 22, 2011

President Obama unveiled a $3 trillion federal budget Deficit Reduction Plan on September 19, 2011 including $1.5 trillion in tax increases. The President's Deficit Reduction Plan ("Living Within Our Means and Investing in the Future: The President's Plan For Economic Growth and Deficit Reduction") makes good on his pledge to produce a balanced deficit reduction package, one that combines spending cuts with revenue raisers. Increased taxes on higher income individuals would account for a significant portion of the revenue raised under the President's Deficit Reduction Plan. Other areas targeted for tax hikes include the oil, gas and coal industries, certain international activities and more.


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President Proposes $447 Billion Jobs Package

Updated: September 15, 2011

President Obama has challenged Congress to immediately pass the American Jobs Act of 2011 – a $447 billion jobs package, including payroll tax cuts and tax credits to encourage hiring, along with extended 100 percent bonus depreciation, which would be paid for by limiting deductions for higher income taxpayers and changing the taxation of carried interest. The President described his jobs package during a speech to a Joint Session of Congress on September 8 and unveiled the legislative text on September 12.


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Congress Approves Debt Ceiling Bill; New Joint Committee To Weigh Year-End Tax Legislation

Updated: August 2, 2011

On August 2, President Obama quickly signed the Budget Control Act (Sen. 365 as amended) after passage by the Senate 74 to 26. The House had passed the Budget Control Act on August 1 by a vote of 269 to 161. The new law raises the debt limit to avoid a projected August 2 default and creates a bipartisan joint select committee on deficit reduction.


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Obama Signs 1099 Repeal Bill

Updated: April 14, 2011

President Obama signed on April 14 a bill (H.R. 4) to repeal controversial expanded information reporting on Form 1099 for certain business payments and rental property expense payments. The Senate passed H.R. 4 on April 5, the House had approved the bill on March 3, 2011. To offset cost of repeal, H.R. 4 increases the amount of the overpayment of the health insurance premium assistance credit that is subject to recapture.


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President Obama Releases FY 2012 Federal Budget Proposals

Updated: February 17, 2011

President Obama released the third proposed federal budget of his term, for fiscal year (FY) 2012, on February 14. The FY 2012 budget renews many of the president's earlier tax policies, such as ending the Bush-era tax cuts for higher income individuals, making permanent the American Opportunity Tax Credit, eliminating some energy tax incentives, and reforming some international tax provisions. Overall, President Obama proposed $3.73 trillion in federal spending and $1.1 trillion in deficit reductions. The president's FY 2012 budget now faces many Congressional hearings, at which lawmakers are expected to challenge many of the proposals, especially in the GOP-controlled House.


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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.


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Updated: December 21, 2010 President Signs Two-Year Extension of Bush-Era Tax Cuts, Payroll Tax Relief, Estate Tax Compromise

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.


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Updated: September 23, 2010 Congress Approves Small Business Tax Bill with $12 Billion in Tax Benefits

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.


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Updated: September 13, 2010 Sunsetting Provisions Create Challenges for Tax Planning

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.


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Updated: August 11, 2010 President Signs Foreign Tax Reforms to Fund Education / Medicaid

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).


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Updated: July 2, 2010 President Signs Homebuyer Credit Closing Relief With Revenue Offsets

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.


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Updated: June 25, 2010 President Signs Doc Fix/Pension Funding Relief Bill

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.


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Updated: June 17, 2010 Senate Democrats Streamline Extenders Bill; Prune Revenue Raisers

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.


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Updated: June 16, 2010 House Passes Small Business Tax Relief Package

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.


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Updated: March 30, 2010 Congress Completes Overhaul Of Health Care Law; Makes Many Tax Changes

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.


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Updated: March 23, 2010 President Signs Health Care Reform; Senate Reconciliation Vote Next

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.


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Updated: March 18, 2010 President Signs HIRE Act; New Law Provides Hiring Incentives, Expensing Extension And More

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.


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Updated: March 10, 2010 2010 Hiring Incentives to Restore Employment Act

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.


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Updated: February 24, 2010 Senate Passes Jobs Bill With Hiring Incentives, Expensing Extension

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.


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Updated: February 5, 2010 Obama Unveils $3.83 Trillion Budget; Tax Proposals Focus On Job Creation, Revenue

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.


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Updated: January 25, 2010 New Law Allows 2010 Haiti Relief Contribution Deductions On 2009 Returns

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.


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Updated: January 14, 2010 IRS Unveils Comprehensive Preparer Reform Blueprint

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.


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Updated: December 28, 2009 House-Passed Extenders/Jobs Bills Await Senate Action in 2010

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.


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Updated: December 28, 2009 Senate Passes Health Care Reform Legislation

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.


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Updated: December 28, 2009 Estate Tax Extension Passes House, Fails In Senate; Carryover Basis To Be Effective January 1, 2010

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.


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Updated: December 10, 2009 House Passes Extenders Bill With Carried Interest, Foreign Reporting Revenue Raisers

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.


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Updated: December 4, 2009 House Passes Permanent Estate Tax Relief Bill; Fate in Senate Uncertain

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.


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Updated: November 19, 2009 Senate Health Bill Calls For Excise Tax On Insurance Plans, Added Payroll Tax On High-Wage Earners

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.


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Updated: November 9, 2009 House Passes Higher-Income Surtax,New Limits On FSAs, and More To Fund Health Care Reform

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.


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Updated: November 6, 2009 Worker, Homeownership, and Business Assistance Act of 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.


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Updated: May 14, 2009 Treasury Releases "Green Book" of Tax Proposals

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.


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Updated: February 17, 2009 President Signs Massive Stimulus Bill; Nearly $300 Billion in Tax Relief

President Obama has signed the American Recovery and Reinvestment Act into law. Moving through Congress in less than four weeks, the $787 billion new law, which contains nearly $300 billion in tax relief, sets in motion a wave of direct spending and tax incentives to jump start the U.S. economy out of recession.


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CCH's Quick Tax Facts on the American Recovery and Reinvestment Act of 2009

CCH industry-leading books and CPE courses that cover the 2009 Stimulus Act:

Updated: December 11, 2008 Congress Passes Emergency Pension Tax Relief/Technical Corrections

In response to the continuing drumbeat of bad economic news, Congress passed the Worker, 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 the Pension 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.


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Updated: December 4, 2008 President-Elect Obama Brings Ambitious Tax Policy Agenda to Washington

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.

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Updated: October 3, 2008 President Signs Financial Markets Rescue Plan, AMT Patch, Extenders, Disaster Relief and More

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 the full CCH Coverage Here

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/

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Updated: September 18, 2008 Presidential Candidates Outline Tax Policies

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.

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CCH Resources Now Available:

Updated: July 30, 2008 President Signs the Housing and Economic Recovery Act of 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.

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Updated: May 22, 2008 Congress Enacts Farm Bill Overriding Bush Veto And Passes Military Tax Relief

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 the full CCH Coverage Here

CCH Legislation Books You Can Order Now:

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Updated: February 13, 2008 President signs Economic Stimulus Act of 2008 With Rebates and Business Incentives

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 the full CCH Coverage Here

2014 Post-Filing Season Update

With all the focus on compliance during the return filing season, practitioners and their clients may have only skimmed some of the impor- tant federal tax developments that have oc- curred since the start of 2014. This Briefing is designed to bring you up to speed on fed- eral tax developments in January, February, March and early April 2014, with pointers on how these developments may unfold, and how they may affect taxpayers and the next filing season. So far this year, the IRS, other federal agencies and the courts have issued guidance on individual and business taxa- tion, retirement savings, foreign accounts, the Affordable Care Act, and much more.

2014 Post-Filing Season Update

Fiscal Year 2015 Federal Budget Proposals

President Obama renewed his call for expanding child, family and education tax credits in his fiscal year (FY) 2015 budget proposals as well as for curbing some tax preferences for higher income individuals and businesses. The President unveiled his $3.9 trillion FY 2015 budget proposals on March 4. Many of the proposals are familiar from past budgets, but for FY 2015 the White House is placing special emphasis on passing tax reform for families and lower income individuals.

Fiscal Year 2015 Federal Budget Proposals

CCH Special Report: Comprehensive Analysis of Final Repair/Capitalization Reg and Proposed MACRS Disposition Regs

Our CCH Special Report provides a comprehensive review of the IRS’s final repair regulations and the related rules for changes to permitted or required accounting methods. recently released guidance that explains how to change to accounting methods required or permitted by the). Taxpayers must comply with the regs beginning in 2014, but may apply them retroactively. This Special Report brings all the important issues together in one place.

Comprehensive Analysis of Final Repair/Capitalization Reg and Proposed MACRS Disposition Regs

2013 Tax Year-In-Review

2013 was an eventful year for federal tax developments, notable from its onset by passage of the American Taxpayer Relief Act of 2012 (ATRA), which permanently extended the Bush-era tax cuts for all but higher-income taxpayers as well as numerous other important, but previously temporary, provisions. The year also saw an ample release of important guidance relating to the Affordable Care Act, the new Net Investment Income tax and Additional Medicare Tax, capitalization and repairs, the tax treatment of married same-sex couples and much more. In international taxation, the IRS won several important victories in the federal courts relating to international financial transactions used as tax shelters. The IRS also stepped up investigations of U.S. persons who may be hiding funds in undisclosed offshore accounts and continued to implement the Foreign Account Tax Compliance Act (FATCA) by releasing rules and regulations, draft forms and signing intergovernmental agreements.

2013 Tax Year-In-Review

IRS Releases Final Regulations on Net Investment Income and Additional Medicare Taxes

Recently released final regulations aim to clarify the Code Sec. 1411 3.8 percent Net Investment Income (NII) tax and Code Sec. 3101(b)(2) 0.9 percent Additional Medicare Tax. The much anticipated NII final regulations come nearly one year after the IRS issued proposed reliance regulations.

Clarifications in the final NII regulations cover income, estimated taxes, real estate rental activities, regrouping under Code Sec. 469, trusts and estates, and much more. The IRS will generally allow taxpayers to rely on either the NII proposed regulations or the final regulations for tax years beginning before January 1, 2014. The final Additional Medicare Tax regulations generally track the proposed regulations with some clarifications for employers. Additionally, the IRS released proposed regulations on the calculation of NII regarding certain types of property, as well as taking a different approach to a much-criticized deemed sale rule for dispositions of active interests in partnerships and S corporations.

IRS Releases Final Regulations on Net Investment Income and Additional Medicare Taxes

2013 Year-End Tax Planning

Year-end 2013 brings many new planning opportunities along with the traditional year-end tax planning strategies. It also brings challenges — for both individuals and businesses. There is much for taxpayers and their tax advisors to consider in taking action before 2013 ends, including the important changes made by the American Taxpayer Relief Act of 2012 (ATRA) (signed into law on January 2, 2013), the provisions in the Patient Protection and Affordable Care Act of 2010 (Affordable Care Act) (scheduled to take effect in 2013, 2014) the Supreme Court’s decision on same-sex marriage and the release of significant new IRS rules on many pressing issues. There is also the prospect of comprehensive tax reform in 2014, which will require some "crystal ball" forecasting of what Congress may or may not do in the coming year. On top of everything, the IRS shutdown in October could delay the start of the 2014 filing season, although the longterm effects have yet to be determined.

2013 Year-End Tax Planning

Analysis of Comprehensive Repair/Capitalization Final Regulations

The IRS has released much-anticipated final “repair” regulations (T.D. 9636) governing when taxpayers must capitalize and when they can deduct their expenses for acquiring, maintaining, repairing and replacing tangible property. The final regulations make significant taxpayer-friendly changes to the 2011 temporary regulations. Compliance with the labyrinth of rules in the final regs, however, will challenge virtually every business, especially in light of an approaching January 1, 2014 effective date.

Analysis of Comprehensive Repair and Capitalization Final Regulations

IRS Guidance on Same-Sex Marriage

All legally married same-sex couples will be treated as married for federal tax purposes whether or not the couple lives in a jurisdiction that recognizes same-sex marriage, the IRS announced on August 29. The ruling, issued two months after the U.S. Supreme Court struck down Section 3 of the Defense of Marriage Act (DOMA) in E.S. Windsor (2013-2 ustc ¶50,400, June 26, 2013), affects all federal taxes, including income taxes, estate and gift taxes, payroll taxes associated with employee spousal benefits, and more.

IRS Guidance on Same-Sex Marriage

Supreme Court Strikes Down DOMA

In a 5 to 4 decision, the United States Supreme Court has found that Section 3 of the federal Defense of Marriage Act (DOMA) violates the equal protection clause of the Fifth Amendment of the U.S. Constitution as applied to persons of the same sex who are legally married under the laws of their state (Windsor, S.Ct., June 26, 2013, 2013-2 ustc ¶50,400). The majority, written by Justice Anthony Kennedy, held that DOMA is unconstitutional as a deprivation of the liberty of the person protected by the Fifth Amendment of the Constitution.

Supreme Court Strikes Down DOMA

Senate Passes Marketplace Fairness Act

The U.S. Senate has overwhelmingly, and with strong bipartisan support, passed the Marketplace Fairness Act of 2013 (the Act) by a vote of 69-27. The bill would allow a state to require certain remote sellers to collect sales and use tax on sales made to customers in the state. States that are members of the Streamlined Sales and Use Tax Agreement (SST) would automatically be granted this authority. States that are not SST members would be required to implement simplification requirements. The bill provides an exception for businesses with annual remote sales of $1 million or less.

Senate Passes Marketplace Fairness Act

Fiscal Year 2014 Federal Budget Proposals

President Obama released a $3.77 billion fiscal year (FY) 2014 federal budget on April 10, 2013, with a mix of individual and business tax proposals intended to raise revenue, reduce spending and encourage negotiations between the White House and the GOP on comprehensive tax reform. President Obama called for a 28 percent cap on itemized deductions, a $3 million limit on tax-preferred retirement savings, a permanent research tax credit, a permanent American Opportunity Tax Credit (AOTC), a change in the taxation of carried interest, and more. President Obama also provided for the first time specifics on the so-called Buffet Rule. Following release of the President's FY 2014 budget recommendations, the Treasury Department issued its customary “Green Book,” describing the proposals.

Fiscal Year 2014 Federal Budget Proposals

2012 Tax Year-In-Review

Uncertainty during 2012 over what tax laws would govern in 2013 and beyond because of the expiring Bush-era tax cuts clearly was the most significant development of the year. Now that Congress and President Obama — through the American Taxpayer Relief Act of 2012 (ATRA) — have provided a degree of certainty over tax rates into at least the immediate future, taxpayers need to adjust their tax plans accordingly. Individuals and businesses should immediately recalibrate strategies in light of ATRA. 2012 was also a significant year for important tax developments from the Treasury Department, the IRS and the courts. These developments demand the attention of individual and business taxpayers not only to caution what is no longer allowed under the tax laws but also to shape what steps can be taken in 2013 and beyond to maximize tax savings. With that forward-looking perspective, this Tax Briefing reviews key federal tax developments that took place during 2012.

2012 Tax Year-In-Review

President Signs Eleventh-Hour Agreement To Avert Fiscal Cliff

The tax side of the “Fiscal Cliff” has been averted. The U.S. Senate overwhelmingly passed legislation to avert the so-called fiscal cliff on January 1, 2013 by a vote of 89 to 8, sending the American Taxpayer Relief Act of 2012 (HR 8, as amended by the Senate) to the House, where it was similarly approved on January 1, 2013 by a vote of 257 to 167. The American Taxpayer Relief Act allows the Bush-era tax rates to sunset after 2012 for individuals with incomes over $400,000 and families with incomes over $450,000; permanently “patches” the alternative minimum tax (AMT); revives many now-expired tax extenders, including the research tax credit and the American Opportunity Tax Credit; and provides for a maximum estate tax of 40 percent with a $5 million exclusion. The bill also delays the mandatory across-the-board spending cuts known as sequestration. President Obama signed the bill into law on January 2, 2013.

President Signs Eleventh-Hour Agreement To Avert Fiscal Cliff

Analysis of Post-2012 Net Investment Income and Additional Medicare Taxes

The IRS has issued long-awaited and much-needed proposed reliance regulations on the operation of the two new surtaxes imposed under 2010 health care legislation: the 3.8 percent Net Investment Income (NII) Tax under Code Sec. 1411 and the 0.9 percent Additional Medicare Tax under Code Secs. 3101(b)(2) and 1401. Both surtaxes are scheduled to spring into full effect on January 1, 2013. The proposed reliance regs — and frequently asked questions (FAQs) on the IRS website — seek to address many of the gaps in application of these surtaxes that have been questioned by tax professionals, employers and taxpayers. At the same time, the proposed reliance regs create new questions about application of the surtaxes. The guidance on each of these new surtaxes is extensive and is immediately critical for affected taxpayers.

Analysis of Post-2012 Net Investment Income and Additional Medicare Taxes

UPDATED: Analysis of Comprehensive Repair/Capitalization Regulations

Repair Regulations Have sweeping impact; Will Require Accounting Method Changes; 2014 Effective Date Extension Announced. Almost a year after the IRS issued temporary “repair” regulations (T.D. 9564), many complex questions remain about their interpretation and application. One thing is for sure however; they affect all businesses in one way or another. Accordingly, it is vital to become intimately familiar with their content to understand how each client is affected.

UPDATED: Analysis of Comprehensive Repair/Capitalization Regulations

2012 Post-Election Tax Policy

President Obama secured a second term in office November 6, 2012, in the end winning the Electoral College by a wide margin. The President's re-election now sets in motion what will likely be difficult negotiations between Democrats and Republicans over the fate of the Bush-era tax cuts, nearly $100 billion in automatic spending cuts, and the more than 50 expiring tax extenders, which include the alternative minimum tax (AMT) patch for tens of millions of taxpayers. The President's re-election has also significantly changed the dynamics for reaching an eventual agreement over long-term tax reform.

2012 Post-Election Tax Policy

2012 Year-End Tax Planning

Year-end tax planning is always complicated by the uncertainty that the following year may bring and 2012 is no exception. Indeed, year-end tax planning in 2012 is one of the most challenging in recent memory. A combination of events — including possible expiration of some or all of the Bush-era tax cuts after 2012, the imposition of new so-called Medicare taxes on investments and wages, doubts about renewal of many tax extenders, and the threat of massive across-the-board federal spending cuts — have many taxpayers asking how can they prepare for 2013 and beyond … and what to do before then. The short answer is to quickly become familiar with the expiring tax incentives and what may replace them after 2012... and to plan accordingly. Year-end planning for 2012 requires a combination of multi- layered strategies, taking into account a variety of possible scenarios and outcomes.

2012 Year-End Tax Planning

Presidential Candidates Outline Tax Policies

On November 6, 2012, Americans will elect the occupant of the White House for the next four years. As President of the United States, he will play a major role shaping tax policy and possibly reforming the entire Tax Code. This special CCH Briefing describes the tax policies of President Barack Obama, the Democratic Party candidate for President, and former Governor Mitt Romney, the Republican Party candidate for President, with analysis of the potential impact of their tax positions both for the immediate future and for 2014 and beyond.

Presidential Candidates Outline Tax Policies

Analysis of Comprehensive Repair/Capitalization Regulations

More than six months after the IRS issued temporary "repair" regulations (T.D. 9564), many complex questions remain about their interpretation and application. One thing is for sure however; they affect all businesses in one way or another. Accordingly, it is vital to become intimately familiar with their content to understand how each client is affected.

The IRS initially reported it wants to make as few substantive changes as possible when it issues final regulations. However, the regulations have been subject to much criticism over the past several months because they often rely on facts-and- circumstances tests in distinguishing repairs from capitalized expenses. This is the approach that caused conflicts between the IRS and taxpayers in the first place. As a result, the IRS is under pressure to further simplify the regulations with additional bright-line tests and safe-harbors. How the IRS responds to this pressure remains to be seen.

Analysis of Comprehensive Repair/Capitalization Regulations

Supreme Court Upholds Health Care Law; All Tax Measures Preserved

The U. S. Supreme Court has upheld the constitutionality of the 2010 health care reform legislation, including its linchpin individual mandate that requires individuals to pay a penalty if they fail to carry minimum essential health insurance (National Federation of Independent Business, et al. v. Sebelius, SCt, 2012-2 USTC ¶50,423). In its landmark 5 to 4 decision handed down on June 28, 2012, the Court cleared the path for President Obama's signature health care law, the Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act (HCERA), to move forward on schedule. However, the mechanism used to force states to expand Medicaid eligibility did not pass constitutional muster.

Supreme Court Upholds Health Care Law; All Tax Measures Preserved

President Proposes Framework for Business Tax Reform

A reduced corporate tax rate, elimination of many business tax preferences, a new minimum tax on overseas profits, and much more are all part of President Obama's recently released Framework for Business Tax Reform (the "Framework"). The much-anticipated blueprint of the administration's plans for corporate tax reform was unveiled on February 22, 2012 in Washington, D.C.

The Framework contains a large number of general proposals which, according to the administration, will make the Tax Code less complicated for businesses and increase the nation's competitiveness in the global economy. A reduction in the corporate tax rate would be fully paid for by repeal of business tax preferences. The Framework also calls for a new minimum tax on overseas profits and encourages companies to return work to the U.S. by offering a new relocation tax incentive.

President Proposes Framework for Business Tax Reform

President Signs 2012 Payroll Tax Holiday Extension

President Obama on February 22, 2012, signed into law a much-anticipated extension of the employee-side payroll tax cut through the end of 2012. After weeks of uncertainty over whether an agreement could be reached, the House passed the Middle Class Tax Relief and Job Creation Act of 2012 (H.R. 3630) by a vote of 293 to 132 on February 17, 2012. Senate approval quickly followed, also on February 17, by a vote of 60 to 36. Lawmakers agreed not to require the $93.2 billion estimated cost for the payroll tax cut extension to be offset by revenue-raising provisions. A potential impasse over revenue increases was avoided entirely when both parties agreed to offset costs of the full-year, two percentage point payroll tax cut through transfers from the general fund of the Treasury to the OASDI trust fund. In a revenue neutral provision, however, the new law eliminates a timing-shift in the estimated tax payments that had been required of certain large corporations under previous laws. Non-tax provisions within the new law extend unemployment benefits and implement a "doc fix" for Medicare. President Obama signed the bill as soon as it reached the White House.

CCH Tax Briefing: Congress Passes 2012 Payroll Tax Holiday Extension

President Obama Releases FY 2013 Federal Budget Proposals

President Obama proposed a fiscal year (FY) 2013 federal budget on February 13, 2012 containing approximately $1.5 trillion in revenue raisers. The budget reiterates the President's longstanding opposition to extending the Bush-era tax cuts for higher income individuals, proposes to extend or make permanent a number of temporary tax credits and deductions and introduces some new tax incentives. The President’s proposals impact individuals, businesses, exempt organizations, multi-nationals, and taxpayers of all types. The FY 2013 budget and explanations by the Treasury Department also flesh out some of the President's tax proposals in his January 24, 2012 State of the Union address and his "Blueprint for an America Built to Last." Some proposals, such as the Buffett Rule and a proposed minimum tax on overseas profits, are left for further explanation later in this process.

CCH Tax Briefing: President Obama Releases FY 2013 Federal Budget Proposals

2011 Tax Year-In-Review

2011 had been predicted to be a quiet year in federal tax news – as it landed between major tax legislation in 2010 and expected tax reform in 2012 – but the year brought many significant tax developments from the Obama Administration, Congress, the Treasury Department, the IRS, and the courts. President Obama signed bills enacting hiring incentives, repealing three percent government withholding, and more. Congress initiated a national conversation on the pros and cons of tax increases, tax reform, and deficit reduction, which will frame tax proposals for 2012 and beyond. The IRS issued a steady stream of much-needed guidance for businesses and individuals, ratcheted up its attention on tax compliance, particularly in the international area, and continued its multi-prong initiative on return preparer oversight. Meanwhile, the Tax Court and other federal courts handed down decisions of their own, impacting rules for many other taxpayers.

This Tax Briefing provides a review of the key tax law developments of 2011 and more.

CCH Tax Briefing: 2011 Tax Year-In- Review

President Signs 3% Withholding Repeal and Job Creation Act

President Obama signed the Three Percent Withholding Repeal and Job Creation Act on November 21. The new law repeals three percent withholding on government contractors and expands tax incentives to encourage employers to hire military veterans. The new law also expands the IRS’s continuous levy authority, extends authority for the U.S. Department of Veterans Affairs (VA) to obtain information from the IRS and directs the Treasury Department to prepare a report on how to reduce the tax gap owed by federal contractors. HR 674 passed overwhelmingly in the Senate on November 10 by a vote of 95 to 0 and in the House on November 16 by a vote of 422 to 0.

The $12.8 billion cost of repeal of government withholding and the veterans’ tax incentives is off set by modifying the calculation of modified adjusted gross income (AGI) for determining certain federal health care program eligibility, as well as delaying scheduled reductions in fees for VA mortgage applications.

CCH Tax Briefing: President Signs 3% Withholding Repeal and Job Creation Act

President Proposes $447 Billion Jobs Package

President Obama has challenged Congress to immediately pass the American Jobs Act of 2011 – a $447 billion jobs package, including payroll tax cuts and tax credits to encourage hiring, along with extended 100 percent bonus depreciation, which would be paid for by limiting deductions for higher income taxpayers and changing the taxation of carried interest. The President described his jobs package during a speech to a Joint Session of Congress on September 8 and unveiled the legislative text on September 12.

CCH Tax Briefing: President Proposes $447 Billion Jobs Package

Obama Signs 1099 Repeal Bill

President Obama signed on April 14 a bill (H.R. 4) to repeal controversial expanded information reporting on Form 1099 for certain business payments and rental property expense payments. The Senate passed H.R. 4 on April 5, the House had approved the bill on March 3, 2011. To offset cost of repeal, H.R. 4 increases the amount of the overpayment of the health insurance premium assistance credit that is subject to recapture.

CCH Tax Briefing: Obama Signs 1099 Repeal Bill

President Unveils FY 2012 Budget; Renews Call to End Bush-Era Tax Cuts for Higher Income Individuals

President Obama released the third proposed federal budget of his term, for fiscal year (FY) 2012, on February 14. The FY 2012 budget renews many of the president’s earlier tax policies, such as:

  • ending the Bush-era tax cuts for higher income individuals,
  • making permanent the American Opportunity Tax Credit,
  • eliminating some energy tax incentives, and
  • reforming some international tax provisions.

Overall, President Obama proposed $3.73 trillion in federal spending and $1.1 trillion in deficit reductions. The president’s FY 2012 budget now faces many Congressional hearings, at which lawmakers are expected to challenge many of the proposals, especially in the GOP-controlled House.

CCH Tax Briefing: 2012 Federal Budget Proposals

2010 Tax Year-in-Review and Wrap-Up  

In what proved to be a banner year, 2010 saw a record number of tax law changes and developments impacting all taxpayers: individuals, businesses, exempt organizations and more. Starting the year with fundamental health care reform, the Patient Protection and Affordable Care Act, made a number of significant changes to the Internal Revenue Code. A series of tax stimulus measures, first in the Hiring Incentives to Restore Employment Act of 2010, then in the Small Business Jobs Act of 2010, and finally the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the 2010 Tax Relief Act) provide substantial, but temporary, opportunities that in many cases must be acted upon quickly to maximize savings. To offset the cost of many of the tax breaks, Congress enacted "revenue raisers" with a special focus on tightening international tax rules, extending information reporting, adding anti-abuse provisions, and more. On the other hand, the $800 billion-plus of incentives in the 2010 Tax Relief Act was off-budget, with none of the so-called “pay-go” rules requiring offsetting tax increases. CCH's Tax Briefing provides an overview of the key tax law developments of 2010 and their impact on taxpayers.

CCH Tax Briefing: 2010 Year-in- Review

President Signs Two-Year Extension of Bush-Era Tax Cuts, AMT Patch and Other Extenders

With just weeks before the scheduled sunset of numerous taxpayer-friendly tax rates and incentives, Congress passed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (Tax Relief Act of 2010), which extends these popular provisions for two years. The Tax Relief Act of 2010 extends lower marginal individual income tax rates, marriage penalty relief, lower capital gains tax rates, and more that 50 other tax benefits popularly referred to as the "Bush Tax Cuts."

In addition to the extension of the "Bush Tax Cuts," the measure:

  • Provides a two-year AMT patch
  • Includes temporary estate tax relief
  • Extends the deduction for elementary and secondary school teacher expenses
  • Extends the deduction for state and local general sales taxes<
  • Extends the deduction for qualified tuition and related expenses
  • Reinstates the research and development credit
  • Extends the credit for energy-efficient appliances
  • And more!

In all, the Tax Relief Act of 2010 carries a price tag in excess of $850 billion and impacts hundreds of Internal Revenue Code provisions. President Obama signed the legislation into law immediately.

CCH Tax Briefing: President Signs Two-Year of Bush-Era Tax Cuts, Payroll Tax Relief, Estate Tax Compromise
Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (Tax Relief Act of 2010): Law, Explanation & Analysis

President Signs Small Business Jobs Act with $12 Billion in Tax Incentives

On September 27, 2010, President Obama signed into law a package of enhanced business tax incentives, as part of a larger Small Business Jobs Act of 2010, H.R. 5297. Passage was marked by months of negotiations, culminating in House approval on September 23, 2010 by a vote of 237 to 187, after clearing the Senate on September 16, 2010 by a 61 to 38 margin. 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.

The new law contains a number of evenue raising provisions to help pay for these tax incentives, including increased failure-to-file penalties on information returns, a 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!

CCH’s Tax Briefing:  Congress Approves Small Business Tax Bill

2010 Small Business Jobs Acts of 2010: Law, Explanation and Analysis
Small Business Jobs Act of 2010: Legislative Text

JCT Technical Explanation of the Tax Provisions in Senate Amendment 4594 to HR 5297, the Small Business Jobs Act of 2010, JCX-47-10

JCT Estimated Budget Effects of the Revenue Provisions Contained in Senate Amendment 4594 to HR 5297, the Small Business Jobs Act of 2010, JCX-48-10

CCH’s Explanation and Analysis of Sunset of 2001 and 2003 Tax Relief Acts Now Available

Over $1 trillion in tax cuts enacted in 2001 and 2003 as part of the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) (P.L. 107-16) and the Jobs and Growth Tax Relief Reconciliation Act (JGTRRA) (P.L. 108-27) are scheduled to sunset after December 31, 2010. Unless Congress acts to extend or otherwise modify the impacted provisions, more than 50 major tax code provisions will be replaced by rates, deductions and credits based on pre-2001 law.

When EGTRRA and JGTRRA were enacted, few members of Congress expected the sunsets to ever take place. Yet, just months away from the sunset, there is no clear consensus in Congress on whether to extend the impacted provisions or, if extended, for how long. As illustrated by the estate tax repeal at the end of 2009, it seems wise to prepare for the possibility that the sunset of EGTRRA and JGTRRA will occur and to start to plan accordingly.

CCH is providing tax practitioners with everything they need to know about the sunset of the 2001 and 2003 tax cuts and other expiring provisions. For CCH's complete analysis on IntelliConnect, click the links below

CCH’s Tax Briefing:  EGTRRA SUNSET BRINGS NEW CHALLENGES TO PLANNING FOR 2011
Sunset of the 2001 and 2003 Tax Relief Acts: Law, Explanation and Analysis

President Signs Foreign Tax Reforms To Fund Education/Medicaid

Following an unusual sequence of events, Congress passed critical legislation to fund education and Medicaid (H.R. 1586). International tax provisions provide the bulk of the revenue offsets needed for the popular measure to fund the jobs of over 100,000 teachers and first responders, as well as help states fund Medicaid shortfalls. The $9 billion package of tax reforms:

  • Imposes restrictions on foreign tax credits with respect to covered asset acquisitions,
  • Provides for the separate application of foreign tax credit limitations to items resourced under international treaties,
  • Limits foreign taxes deemed paid with respect to Code Sec. 956 inclusions, and
  • Provides a new rule involving redemptions by foreign subsidiaries.

The Senate passed the measure on August 5, 2010, prior to recessing for the month of August. The House returned to Washington, D.C. more than a week into their recess to vote on the legislation. The measure was passed by the House on August 10, 2010. President Obama signed the measure into law on August 10, 2010.

CCH Tax Briefing: Senate Passes Foreign Tax Reforms To Fund Education/Medicaid
2010 Tax Legislation: Law, Explanation and Analysis

Senate To Vote On Small Business Tax Bill After August Recess

A package of enhanced small business tax incentives, as part of a larger Small Business Jobs Act of 2010, H.R. 5297, is expected to be considered by the Senate in September. After several close procedural maneuvers failed to bring the bill onto the Senate floor before the August recess, Democratic leaders have pledged to move the bill forward and to President Obama’s desk this fall. Officially designated as the Senate Substitute 5297, the Senate bill makes significant additions to the tax title that the House passed on June 15, 2010. Both the House and Senate versions of H.R. 5297 include a 100 percent gain exclusion for qualified small business stock, retroactive Code Sec. 6707A penalty relief and an enhanced deduction for start-up expenses. The Senate bill, however, goes much further in providing tax relief, adding a bonus depreciation extension, extending and doubling Section 179 expensing, shortening the C corporation to S corporation holding period for appreciated assets, eliminating cell phones as listed property, and more.

CCH Tax Briefing: Senate To Vote On Small Business Tax Bill After August Recess

President Signs Homebuyer Tax Credit Relief

Leading into the July 4th holiday, Congress passed a series of small bills covering issues ranging from adjustments to the first-time homebuyer credit, an extension of funding for federal aviation programs, and pension funding relief. Following the House’s action of June 29, the Senate on June 30, 2010, passed the Homebuyers Assistance and Improvement Act of 2010 (P.L. 111-198) by unanimous consent. The legislation extends the deadline for closing on a home to qualify for the homebuyer credit from June 30, 2010, to September 30, 2010. The measure is paid for with a delay in the timing of the Travel Promotion Act and a clarification that the bad checks penalty applies to electronic payments. The legislation was signed into law by President Obama on July 2, 2010.

CCH Tax Briefing: Homebuyer Assistance and Improvement Act of 2010
Homebuyer Assistance and Improvement Act of 2010, HR 5623
Summary of HR 5623, the Homebuyers Assistance and Improvement Act of 2010
Homebuyer Assistance and Improvement Act of 2010: Law, Explanation and Analysis

President Signs Doc Fix/Pension Funding Relief Bill

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.

The Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (HR 3962) reverses a 21 percent cut in Medicare reimbursements to physicians that took effect on June 1, 2010. In addition, it provides for a 2.2 percent increase in physician payment rates through November 30. The measure is fully funded by pension funding provisions that were originally part of the American Jobs and Closing Tax Loopholes Act of 2010 (H.R. 4213) a/k/a the tax extenders bill. The pension funding relief measures give sponsors of defined benefit plans additional time to amortize pension funding shortfalls, but does not waive or alter an employer’s obligation to fully fund its pension plan.

H.R. 3962 also authorizes the IRS to disclose to the Center for Medicare and Medicaid Services (CMS) certain return information concerning providers’ outstanding tax debts and provides for a data exchange between CMS and the IRS to identify fraudulent providers.

CCH Tax Briefing: Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010

Small Business Jobs Tax Relief Act of 2010 (H.R. 5486)

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 start-up 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.

It is unclear if the Senate will take up the House bill before its Independence Day recess. House Ways and Means Committee Chair Sander Levin, D-Mich., predicted that the Senate would likely seek to amend the bill but he did not specify how. Senate Democrats also are preoccupied with passing the American Jobs and Closing Tax Loopholes Act (H.R. 4213), which extends a host of temporary tax incentives, and a war spending bill. Many of the provisions in the House bill have been endorsed by the Obama administration.

CCH Tax Briefing: Small Business Jobs Relief Act of 2010

House Passes Tax Extenders; Nixes COBRA Subsidy

Unable to win support for the leadership-endorsed "American Jobs and Closing Tax Loopholes Act" (H.R. 4213), House Democrats passed an abbreviated, yet still substantial, extenders bill on May 28 by a vote of 215 to 204. The bill extends many temporary individual, business, energy, and charitable tax incentives through the end of 2010. The bill retains a controversial revenue raiser, a change in the taxation of carried interest. The bill also retains a package of international taxation reforms. To keep the cost of the bill down, House lawmakers jettisoned, among other things, an extension of eligibility for COBRA premium assistances.

CCH Tax Briefing: American Jobs and Closing Tax Loopholes Act
American Jobs and Closing Tax Loopholes Act: Summary

President Signs FAA Reauthorization Legislation

On April 30, 2010, President Obama signed into law the Airport and Airway Extension Act of 2010. The legislation extends through July 3, 2010, authorities to collect taxes that fund the Airport and Airway Trust Fund, make expenditures from the Airport and Airway Trust Fund, and make grants to airports under the Airport Improvement Program.

Airport and Airway Extension Act of 2010

President Signs Health Care "Fixes" Into Law

On March 30, 2010, President Obama signed into law the Health Care and Education Reconciliation Act of 2010 (2010 Reconciliation Act), which was passed by both the House and Senate on March 25, 2010. The legislation makes some significant changes to the Patient Protection and Affordable Care Act (Patient Protection Act), as signed into law by President Obama on March 23, 2010. Some of the highlights of the 2010 Reconciliation Act include:

  • Broadening of the definition of dependents to include children under age 27 for purposes of the general exclusion for reimbursements for medical care expenses under an employer-provided accident or health plan, and for certain other purposes;
  • Imposition of a 3.8% unearned income Medicare contribution tax on net investment income beginning in 2013;
  • Codification of the economic substance doctrine;
  • Increase in the estimated tax payments for certain large corporations; and
  • Exclusion of "black liquor" from the cellulosic biofuel producer credit.
Patient Protection and Affordable Care Act
CCH Tax Briefing: Healthcare Reform Act
Patient Protection and Affordable Care Act: Law, Explanation & Analysis
House Debate on Senate Amendments to HR 3590
Health Care and Reconciliation Act of 2010, as Reported
Health Care and Education Affordability Reconciliation Act of 2010, an Amendment in the Nature of a Substitute to HR 4872, as Reported
Statement of Administration Policy on HR 3590-Patient Protection and Affordable Care Act and HR 4872-Health Care and Education Affordability Reconciliation Act of 2010
Section-By-Section Analysis of HR 4872, the Health Care & Education Affordability Reconciliation Act of 2010
Congressional Budget Office Preliminary Estimate of Direct Spending and Revenue Effects of an Amendment in the Nature of a Substitute to HR 4872, the Reconciliation Act of 2010

House Passes Small Business Tax Act

The House, on March 24, 2010, passed the Small Business and Infrastructure Jobs Tax Act (HR 4849) by a vote of 246-to-178. The legislation is intended to increase investments that help small businesses create jobs.

The $19.3-billion measure would expand the Build America Bonds program and provide a one-year extension of the TANF Emergency Fund that subsidizes employers who hire unemployed workers; provide capital gains tax relief to small businesses and crack down on multinational firms that engage in so-called tax treaty shopping; and provide a 100-percent exclusion for small business capital gains.

Small Business and Infrastructure Jobs Tax Act of 2010
House Press Release: House Approves Small Business and Infrastructure Job Creation Bill

President Signs Sweeping Health Care Reform Legislation; "Sidecar" Bill Faces Tough Opposition in Senate

President Obama, on March 23, 2010, signed into law the Patient Protection and Affordable Care Act (H.R. 3590). The House passed the legislation March 21, 2010, in a rare Sunday by a vote of 219 to 212. The Senate previously passed the legislation on December, 24, 2009.

The Patient Protection and Affordable Care Act (the Patient Protection Act), is generally designed to effectuate fundamental reforms to the United States health care system. Almost all individuals not covered by Medicaid or Medicare would be required to obtain health care coverage or pay penalties. Employer-provided coverage would generally satisfy the universal coverage requirement. Lower-income individuals, as well as some middle-class families, would receive a credit or voucher to help pay for health insurance, which can be used at one of the American Health Benefits Exchanges that are required to be established by every state. Employers electing not to offer qualifying coverage would be subject to an additional tax to help finance the health care coverage for their employees. Exceptions would be made for small businesses.

The new law also:

  • Requires individuals to make a "shared responsibility payment" if they do not have health insurance for themselves and their dependents, beginning in 2014
  • Provides qualifying taxpayers with household income between 100 percent and 400 percent of the federal poverty line a refundable health insurance premium assistance credit, beginning in 2014
  • Increases the threshold for the itemized deduction for unreimbursed medical expenses from 7.5 percent of adjusted gross income (AGI) to 10 percent of AGI for regular income tax purposes, for tax years beginning after December 31, 2012
  • Requires employers to disclose the total cost of employer-sponsored health insurance coverage provided to their employee annually on the employee's Form W-2 starting with the 2011 plan year
  • Requires any person who provides minimum essential health care coverage to an individual during a calendar year to file a return reporting such coverage in the form and manner described by the Secretary of the Treasury and provide a statement to the covered individual
  • And more!

Pending Changes

On March 21, 2010, the House also approved the Health Care and Education Reconciliation Bill of 2010 (H.R. 4872), or "sidecar" bill, which would make changes to the new health care law. The proposal now goes to the Senate where it expected to meet with significant opposition. Because the Senate is considering this legislation under the reconciliation process, only 51 votes are needed to pass. The Senate is expected to vote on the bill as early as the week of March 21.

Patient Protection and Affordable Care Act
CCH Tax Briefing: Healthcare Reform Act
Patient Protection and Affordable Care Act: Law, Explanation & Analysis
House Debate on Senate Amendments to HR 3590
Health Care and Reconciliation Act of 2010, as Reported
Health Care and Education Affordability Reconciliation Act of 2010, an Amendment in the Nature of a Substitute to HR 4872, as Reported
Statement of Administration Policy on HR 3590-Patient Protection and Affordable Care Act and HR 4872-Health Care and Education Affordability Reconciliation Act of 2010
Section-By-Section Analysis of HR 4872, the Health Care & Education Affordability Reconciliation Act of 2010
Congressional Budget Office Preliminary Estimate of Direct Spending and Revenue Effects of an Amendment in the Nature of a Substitute to HR 4872, the Reconciliation Act of 2010

Senate Passes FAA Reauthorization Bill; Conference Likely

The Senate on March 22, 2010, unanimously approved the FAA Reauthorization bill (H.R. 1586, as amended). The measure would raise fuel taxes for noncommercial aircraft from 21.9 cents to 36 cents per gallon. The excise tax increase is part of a broader $34.5 billion measure reauthorizing the Federal Aviation Administration through fiscal year 2011.

The Senate has failed to pass comprehensive FAA reauthorization dating back to 2008. As a result, Congress has subsequently approved 11 three-month extensions. The House passed a similar measure, the FAA Reauthorization Act of 2009 (H.R. 915), on  May 21, 2009, by a vote of 277 to 136. The House-passed bill extends a similar tax increase on aviation-grade kerosene for three years.

Because the FAA's current funding authority is set to expire on March 31, 2010, House lawmakers on March 17, 2010, approved another three-month temporary extension (H.R. 4853) of the financing and spending authority of the Airport and Airway Trust Fund for three months, to July 3, 2010. The Senate's two-year reauthorization bill now moves to the House, which is likely to request a conference on the measure.

FAA Reauthorization Act of 2009, as Passed by the House (H.R. 915)
Federal Aviation Administration Extension Act of 2010 (H.R. 4853)

President Signs Hiring Incentives to Restore Employment (HIRE) Act

The Senate, on March 17, 2010, passed the Hiring Incentives to Restore Employment (HIRE) Act, which previously passed the House on March 4, 2010. President Obama signed the legislation into law on March 18, 2010.

The HIRE Act provides tax breaks for business to encourage hiring. In addition to continuing a couple of other employment related tax breaks, such as Code Sec. 179 expensing and COBRA premium assistance, the new payroll tax holiday and retention credit and their interaction with the work opportunity credit will give employers additional factors to consider in their hiring decisions.

The legislation also imposes a number of additional burdens with respect to reporting and disclosure of foreign assets. Direct reporting responsibilities are imposed on foreign financial institutions with the threat of withholding used as the tool to achieve compliance. Disclosure and reporting responsibilities imposed on individuals with respect to foreign assets and trusts are also extended to U.S. persons formed or availed of to avoid the disclosure and reporting requirements.

CCH Tax Briefing: Hiring Incentives to Restore Employment Act
Hiring Incentives to Restore Employment (HIRE): Law, Explanation & Analysis
Senate Amendment 3310 to H.R. 2847
Tax Bulletin: HIRE Act: Incentives to Hire and Retain the Unemployed
Tax Bulletin: HIRE Act: Extension of Increased Code Sec. 179 Expensing
Tax Bulletin: HIRE Act: Foreign Account Tax Compliance Requirements

A special CCH briefing discussing the foreign tax compliance provisions in the HIRE Act can be found at http://business.cch.com/briefings/jobsbill.pdf.

Ways & Means Approves Small Business Tax Bill

Legislation that would provide capital gains tax relief to small businesses and crack down on multinational firms that engage in so-called tax treaty shopping was approved by the House Ways and Means Committee on March 17. The Small Business and Infrastructure Jobs Tax Bill (HR 4849), which was introduced by Committee Chairman Sander Levin, D-Mich., passed the committee by a vote of 25-to-15.

Small Business and Infrastructure Job Creation Bill

Senate Passes American Workers, State and Business Relief Bill of 2010

The Senate, on March 10, 2010, passed the American Workers, State and Business Relief Bill of 2010 (H.R. 4213), by a vote of 62 to 36. The measure would extend through 2010 approximately $30-billion worth of expired tax provisions, including the research and development tax credit, accelerated depreciation for certain small businesses and tax credits for biodiesel and other renewable fuels, plus various provisions of the American Recovery and Reinvestment Act (2009 Recovery Act) (P.L. 111-5), and a Medicare physician payment update through the end of September 2010. The measure also extends through the end of the year increased unemployment and COBRA benefits.

House Passes Legislation Encouraging Donations to Victims of Chile Earthquake

On March 10, 2010, the House unanimously passed a bill (H.R. 4783) that allows individuals who make charitable contributions to the victims of the Chile earthquake to take an itemized charitable deduction on their 2009 tax return, as opposed to claiming the deduction on their 2010 tax return. Contributions must be made after February 26, 2010 and on or before April 15, 2010.

The bill also extends the time period for which a charitable donation to the victims of the earthquake in Haiti can be claimed on an individual's 2009 tax return. Pursuant to P.L. 111-126, taxpayers who make monetary contributions to the victims of the earthquake in Haiti after January 11, 2010, and before March 1, 2010, can claim an itemized charitable contribution deduction on their 2009 federal tax return. H.R. 4783 extends that time frame to include donations made on or before April 15, 2010.

House Amends and Passes $15 Billion Jobs Bill

On March 4, 2010, the House amended and passed the Hiring Incentives to Restore Employment (HIRE) Bill (H.R. 2847) by a vote of 217-201. The House amended the bill as passed by the Senate on February 24, 2010, to fully offset the measure. The HIRE bill includes a payroll tax holiday for certain new hires, an extension of the Build America Bonds program to existing tax credit bonds, an extension of highway authorizations, and an extension of higher §179 expensing thresholds. The amended bill now goes to the Senate for consideration.

CCH Tax Briefing: Hiring Incentives to Restore Employment Act
Senate Amendment 3310 to H.R. 2847

President Signs Short-Term Funding of COBRA, Unemployment Benefits

President Obama on March 2 signed the Temporary Extension Act of 2010 (P.L. 111-144). The new law provides a 30-day funding extension for unemployment compensation, COBRA premiums, Medicare physician payments and therapy caps. It also temporarily funds surface transportation and flood insurance programs, small business loan guarantees, federal poverty guidelines and retransmission of television broadcasts.

Temporary Extension Act of 2010

Senate Passes $15 Billion Jobs Bill

On February 24, 2010, the Senate passed the Hiring Incentives to Restore Employment (HIRE) Bill by a vote of 70-28. The $15 billion measure includes a payroll tax holiday for certain new hires, an extension of the Build America Bonds program to existing tax credit bonds, an extension of highway authorizations, and a one-year extension of higher §179 expensing thresholds.

The House passed the Jobs for Main Street Bill of 2010 (H.R. 2847) on December 16, 2009, by a vote of 217 to 212. The significantly more expensive House bill extends unemployment insurance benefits and COBRA health benefits for unemployed workers, and contains a number of non tax provisions. It is not clear if the House will take up the Senate bill.

CCH Tax Briefing: Hiring Incentives to Restore Employment Act
Senate Amendment 3310 to H.R. 2847

Obama Unveils Health Care Proposal

The White House on February 22 unveiled its health care reform plan depicting its ideas as the best chance for bridging the differences between Democrats and Republicans on final legislation. The proposal is built on the Senate's Patient Protection and Affordable Care Bill (HR 3590), with some modifications, including raising the excise tax threshold on family health plans to $27,500, effective in 2018, excluding high-risk and elderly populations.

President Obama's Health Care Proposal

$15 Billion Jobs Bill Headed for Final Vote in Senate

On February 22, 2010, the Senate voted 62-30 to advance a $15 billion jobs bill offered by Senate Majority Leader, Harry Reid, D-Nev. The Hiring Incentives to Restore Employment (HIRE) Bill (Senate Amendment 3310 to H.R. 2847) includes a payroll tax holiday for certain new hires, an extension of the Build America Bonds program to existing tax credit bonds, an extension of highway authorizations, and a one-year extension of higher §179 expensing thresholds.

The cost of the legislation is offset by revenues raised from the Foreign Account Tax Compliance Bill (S. 1934) and a one- year delay in application of worldwide interest allocation rules.

A final vote in the Senate is expected later in the week.

The House previously passed the Jobs for Main Street Bill of 2010 (H.R. 2847) by a vote of 217 to 212, which is significant different from the Senate proposal. In addition to extending unemployment insurance benefits for six months and COBRA health benefits for unemployed workers, the House measure contains several minor tax provisions. It is not clear if the House will consider the Senate proposal or if differences between the two bills will be worked out in a conference.

CCH Tax Briefing: Hiring Incentives to Restore Employment Act
Senate Amendment 3310 to H.R. 2847

Obama Unveils $3.83 Trillion Budget; Tax Proposals Focus on Job Creation and Revenue

President Obama presented Congress with his $3.83 trillion fiscal year (FY) 2011 federal budget proposal on February 1, 2010. Tax incentives for individuals and businesses total approximately $300 billion with an additional $100 billion allocated to job creation. Tax provisions proposed in the budget include:

  • A one year extension of the Making Work Pay Credit
  • A $5000 credit for every new employee hired by a qualified small business in 2010 (capped at $500,000)
  • An extension of the enhanced §179 expensing at 2009 levels through December 31, 2010
  • An extension of the first-year bonus depreciation deduction

Proposed tax increases would raise $1.4 trillion, with the majority of that revenue coming from rate increases for higher- income taxpayers. However, the proposal also calls for over $450 billion in other revenue raisers. Those increases impact many categories of taxpayers but, perhaps most directly, those with international operations.

CCH Tax Briefing: FY 2011 Federal Tax Budget - Tax Proposals
Budget Message of the President: Fiscal Year 2011 Budget
Office of Management and Budget Fact Sheets on Key Issues

President Signs Accelerated Tax Deduction For Haiti Earthquake Relief Into Law; IRS Announces Qualified Disaster Relief for Haiti

On January 22, 2010, President Obama signed into law H.R. 4462, which allows taxpayers who make monetary contributions to the victims of the earthquake in Haiti after January 11, 2010, and before March 1, 2010, to claim an itemized charitable contribution deduction on their 2009 federal tax return. The House of Representatives unanimously passed H.R. 4462 on January 20, 2010. The Senate approved the measure by unanimous consent one day later on January 21, 2010.

The IRS also designated the January 2010 earthquake in Haiti as a qualified disaster. Employer-sponsored private foundations may assist certain victims in areas affected by the earthquake, and recipients of the aid may exclude relief payments from gross income. The IRS will presume that qualified disaster relief payments made by a private foundation to employees and their family members in areas affected by the Haiti earthquake are consistent with the foundation's charitable purposes.

CCH Tax Briefing: House Approves Accelerated Tax Deduction for Haiti Earthquake Relief
Notice 2010-16; IR-2010-11: IRS Announces Qualified Disaster Treatment for Haiti

 

H.R. 4462 Legislation to Accelerate the Income Tax Benefits for Charitable Cash Contributions for the Relief of Victims of the Earthquake in Haiti
Senate Finance Committee Press Release: Senate Unanimously Approves Plan to Help Haiti
House Ways and Means Committee Press Release: House Unanimously Approves Bill to Allow Taxpayers to Claim Charitable Deduction in 2009 for Haiti Relief

IRS Unveils Comprehensive Preparer Reform Blueprint

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.

CCH Tax Briefing: Return Preparer Oversight
 

CCH Coverage and Analysis of Recent Tax Law Developments.

Affordable Care Act – Law, Regulatory Explanation and Analysis 2014

Affordable Care Act – Law, Regulatory Explanation and Analysis (2014)

Provides thorough and complete text of added, amended, or repealed Code sections with controlling committee reports and CCH's explanation and analysis of tax provisions contained in the legislation.

Employers Tax Guide to Health Reform 2014

Employer's Tax Guide to Health Reform (2014)

Explains the tax-related provisions of the health reform provided for by the Patient Protection and Affordable Care Act, focusing on what employers need to know for 2014. These important provisions are succinctly explained and generously complemented with cautions, examples and comments.

U.S. Master Tax Guide 2014

U.S. Master Tax Guide (2014)

Provides helpful and practical guidance on today's federal tax law.

U.S. Master Tax Guide, 2013 Legislative Update

U.S. Master Tax Guide, 2013 Legislative Update

Provides tax professionals with explanations of the key components of late-breaking legislation.

Tax Legislation 2012: Law, Explanation & Analysis

Tax Legislation 2012: Law, Explanation & Analysis

Provides tax professionals with a single integrated reference source. Along with the impacted Internal Revenue Code provisions, CCH editors, together with leading tax practitioners and commentators, have created a complete practical analysis.

Tax Legislation 2012: Highlights

Tax Legislation 2012: Highlights

Provides the tax professional's clients with brief, easy-to-understand explanations of the key components of this landmark legislation. The most important tax provisions, whether impacting individuals, families or business, are succinctly explained.