CCH Weekly Report from Washington, D.C.

President Obama and former Gov. Mitt Romney debated federal tax policy on October 3, with Romney saying he supports deficit-neutral tax cuts that create jobs and boost the economy while the president said that he would cut taxes for manufacturers to 25 percent, paid for by closing various tax loopholes. House Democrats, meanwhile, said Congress should not wait for a lame-duck session after the November elections to address the expiring Bush tax cuts, tax extenders, budget sequestration and defense cuts planned for 2013. The IRS released revised specifications for electronically filing Form 8027, Employer’s Annual Information Return of Tip Income and Allocated Tips, as well as the applicable terminal charge and the Standard Industry Fare Level (SIFL) mileage rates for determining the value of noncommercial flights on employer-provided aircraft in effect for the second half of 2012 for purposes of the taxation of fringe benefits.

White House

President Obama and former Gov. Mitt Romney debated federal tax policy on October 3 (TAXDAY, 2012/10/04, W.1 ). Speaking during a televised presidential debate, Romney said he supports deficit-neutral tax cuts that create jobs and boost the economy. Obama said that he would cut taxes for manufacturers to 25 percent, paid for by closing tax loopholes, such as a provision that allows companies to ship jobs overseas.

Congress

A group of House Democrats, led by Minority Leader Nancy Pelosi, D-Calif., said on October 2 that Congress should not wait for a lame-duck session after the November elections to address the expiring Bush tax cuts, tax extenders, budget sequestration and defense cuts planned for 2013 (TAXDAY, 2012/10/03, C.1 ).

Treasury

The Treasury Inspector General for Tax Administration (TIGTA) issued the following reports:

The IRS’s information security program was generally compliant with the Federal Information Security Management Act (FISMA) (Reference Number: 2012-20-114 ; TAXDAY, 2012/10/05, T.2 ). Eight programs met the level of performance specified by the Department of Homeland Security’s Fiscal Year 2012 Inspector General FISMA Reporting Metrics, but the configuration management, identity and access management, and security training programs did not.

Form 3949-A, Information Referral, is often used for purposes other than reporting suspected fraud and/or tax violations (Reference Number: 2012-40-106 ; TAXDAY, 2012/10/04, T.1 ). TIGTA recommended that, among other things, the IRS revise its instructions for the use of Form 3949-A, improve guidance for reporting identity theft, and ensure that an IRS-wide coordination process is in place.

Most Criminal Investigation (CI) special agents meet annual firearms training and qualification requirements; however, there were some CI special agents who did not (Reference Number: 2012-30-104 ; TAXDAY, 2012/10/03, T.1 ). TIGTA made several recommendations, including that the IRS clarify firearm qualification requirements and nontraining-related discharge procedures in the Internal Revenue Manual.

The IRS has a number of policies and procedures in place to help ensure that taxpayers are afforded the right to designate a qualified representative to act on their behalf when dealing with IRS personnel in a variety of tax matters (Reference Number: 2012-30-089 ; TAXDAY, 2012/10/02, T.1 ). However, TIGTA found that revenue officers were not always involving representatives appropriately in some key actions.

IRS

SIFL Rates. The IRS has released the applicable terminal charge and the Standard Industry Fare Level (SIFL) mileage rates for determining the value of noncommercial flights on employer-provided aircraft in effect for the second half of 2012 for purposes of the taxation of fringe benefits (Rev. Rul. 2012-27 ; TAXDAY, 2012/10/05, I.5 ).

Specifications Revised For E-file Form 8027. The IRS has issued revised specifications for electronically filing Form 8027, Employer’s Annual Information Return of Tip Income and Allocated Tips (Rev. Proc. 2012-37 ; TAXDAY, 2012/10/05, I.6 ). Form 8027 is used by large food or beverage establishments to report their gross receipts from food or beverage operations and tips reported by employees.

Private Foundation/Foreign Charity Regs. Recently released proposed regulations under Code Secs. 4942 and 4945 (NPRM REG-134974-12 ; TAXDAY, 2012/09/24, I.1 ) are designed to reduce administrative costs for private foundations seeking to make a good-faith determination that a foreign charity is the equivalent of a U.S. public charity, explained Ruth Madrigal, attorney advisor, Treasury Office of Tax Policy (TAXDAY, 2012/10/05, I.8 ).

IRPAC Meeting Date Set. The Information Reporting Program Advisory Committee (IRPAC) will hold a public meeting on Wednesday, October 24, 2012, from 9:00 a.m. to 12:00 p.m., at the Hilton DoubleTree, Washington, D.C. (TAXDAY, 2012/10/04, I.1 ). Topics may include: cost basis reporting for debt and options; de minimis threshold for Form 1099 corrections; and Foreign Account Tax Compliance Act.

Mississippi Disaster Relief. A September 5, 2012, notice (TAXDAY, 2012/10/06, I.2 ) granting relief to victims of Hurricane Isaac that began on August 26, 2012, in parts of Mississippi, was updated by the IRS on October 1, 2012, to include Copiah, Franklin, Jefferson, Jones and Lamar counties (LA/MS-2012-14 ; TAXDAY, 2012/10/03, I.1 ).

Filmed Studies/CLE Credit. The IRS has announced that it has made 15 filmed self-study seminars, which are available on IRS Nationwide Tax Forums Online (NTFO) and allow tax professionals to earn continuing education credits (IR-2012-74 ; TAXDAY, 2012/10/02, I.2 ). Topics covered include new tax law updates, registered return preparer regulations, Treasury Circular No. 230 rules, educational credits, payment card reporting, basis reporting and earned income tax credit (EITC) due diligence.

By Stephen K. Cooper and Jennifer J. Rodibaugh, CCH News Staff

 

AUTHOR

Wolters Kluwer Tax and Accounting

Wolters Kluwer Tax and Accounting is a leading provider of software solutions and local expertise that helps tax, accounting, and audit professionals research and navigate complex regulations, comply with legislation, manage their businesses and advise clients with speed, accuracy and efficiency. Wolters Kluwer Tax and Accounting is part of Wolters Kluwer N.V. (AEX: WKL), a global leader in information services and solutions for professionals in the health, tax and accounting, risk and compliance, finance and legal sectors. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with specialized technology and services. Wolters Kluwer reported 2016 annual revenues of €4.3 billion. The company, headquartered in Alphen aan den Rijn, the Netherlands, serves customers in over 180 countries, maintains operations in over 40 countries and employs 19,000 people worldwide. Wolters Kluwer shares are listed on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. Wolters Kluwer has a sponsored Level 1 American Depositary Receipt program. The ADRs are traded on the over-the-counter market in the U.S. (WTKWY).

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