CCH Weekly Report from Washington, D.C.

During a speech at the National Press Club, Sen. Charles E. Schumer, D-N.Y., said that lowering the top individual tax rates would be a serious mistake and counterproductive to solving the nation’s economic woes. He added that federal policymakers eyeing an overhaul of the U.S. tax code in the coming months should abandon such thinking and focus on reducing the deficit. The IRS, meanwhile, has posted answers to frequently asked questions about same-sex couples, registered domestic partners, and same-sex spouses in community property states. The Service has also implemented two separate clarifying changes to its temporary procedures for issuing individual taxpayer identification numbers (ITINs).

Congress

 

 

 

Instead of luring Republicans to the table on a grand bargain with the promise of lower tax rates for the wealthy, Schumer said during his October 9 speech that Democrats should be prepared to offer to make significant reforms to entitlements. He proposed a three-pronged approach: curtailing tax expenditures; returning to a Clinton-era top rate; and reducing but not eliminating the tax preference for investment income. Schumer also rejected corporate tax reform as a source for new revenue. He argued that it is imperative that lawmakers seek to reduce the corporate tax rate from 35 percent and do it on a revenue-neutral basis in order to preserve international competitiveness.

Treasury

 

 

 

Treasury/Information Technology. The Treasury Inspector General for Tax Administration issued a report that the IRS had successfully restructured its “help desk” End-User Equipment and Services (EUES) organization, which provides information technology support (Reference Number: 2012-20-086 ; TAXDAY, 2012/10/12, T.1 ). However, the IRS could take additional steps to cut costs and increase efficiency and must redouble its efforts to ensure that IRS employees use a self-service tool to resolve minor computer issues.

FinCEN Form/ITIN Requirements. The Financial Crimes Enforcement Network (FinCEN) has released the requirements for electronic filing of FinCEN’s Currency Transaction Report (CTR), Suspicious Activity Report (SAR), and Designation of Exempt Person (DOEP) Report (FinCEN Form 110) (TAXDAY, 2012/10/12, T.2 ). Among other changes, the instructions now clarify that the formatting of the Taxpayer Identification Number (TIN) must omit spaces, hyphens, and periods.

IRS

 

 

 

Domestic Partnership/Same-Sex Marriage FAQs. The IRS has posted answers to frequently asked questions about same-sex couples, registered domestic partners, and same-sex spouses in community property states (TAXDAY, 2012/10/11, I.1 ).

Shulman Term To End. The IRS has announced that IRS Commissioner Douglas H. Shulman will step down on November 9, the last day of his term (IR-2012-76 ; TAXDAY, 2012/10/11, I.2 ). Deputy Commissioner for Services and Enforcement Steven T. Miller will serve as acting IRS commissioner after Shulman steps down.

Current Plan Liability Rate. The IRS released for pension plan years beginning in October 2012 the corporate bond weighted average interest rate, the permissible range of interest rates used to calculate current plan liability and to determine the required contribution under Code Sec. 412(l) for plan years through 2012, and the current corporate bond yield curve and related segment rates for the purpose of establishing a plan’s funding target under Code Sec. 430(h)(2) (Notice 2012-64 ; TAXDAY, 2012/10/08, I.1 ).

ITIN Changes. The IRS has implemented two separate clarifying changes to its temporary procedures for issuing ITINs (TAXDAY, 2012/10/08, I.3 ). The IRS will allow individuals studying in the United States under the Student Exchange Visitors Program (SEVP) to obtain ITINs under a streamlined procedure and will also create special procedures for taxpayers who have an approved Tax Year 2011 extension to file their completed tax returns.

Whistleblower Award. The IRS awarded $2 million to a Wall Street whistleblower who exposed a corporation’s multimillion dollar tax-deduction scheme (TAXDAY, 2012/10/08, I.4 ). The whistleblower exposed an alleged tax-avoidance scheme by Illinois Tool Works Inc. (ITW) that cost the IRS hundreds of millions of dollars.

By Jeff Carlson 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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