CCH Weekly Report from Washington, D.C.

The IRS has extended the due date for filing returns and accompanying payments normally due on October 31 until November 7 for taxpayers and preparers impacted by Hurricane Sandy. The Obama Administration denied a report that it is considering an alternative to the payroll tax cut. Meanwhile, House Ways and Means Committee ranking member Sander Levin, D-Mich., is seeking to find out why the Congressional Research Service (CRS) withdrew a report about taxes and the economy. The Treasury is extending the deadline for completion of a study to identify and rank the magnitude of tax provisions that substantially affect the emission rates of carbon dioxide and other greenhouse gases.

White House

The White House on October 27 denied an earlier report that the Obama administration is considering an alternative to the payroll tax cut (TAXDAY, 2012/11/01, W.1 ). The Washington Post reported on October 26 that the White House was weighing the idea of a tax cut that would increase workers’ take-home pay. White House Principal Deputy Press Secretary Josh Earnest told reporters that the administration is not contemplating a tax cut as described in the article at this time.


Levin on November 1 sent a letter to CRS Director Mary B. Mazanec requesting information about what led the CRS to withdraw a September report (TAXDAY, 2012/11/02, C.1 ). The report, “Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945,” by Thomas Hungerford, found no correlation between tax cuts and economic growth and compared tax policy with gross domestic product patterns over the last 65 years. The report was first released in September (TAXDAY, 2012/09/21, O.4 ) but was removed from public circulation shortly thereafter, apparently after pressure was applied by Senate Republican leaders.


The Treasury Inspector General for Tax Administration (TIGTA) issued a report finding that the IRS needs an enterprise approach to enforce computer software patch management (Reference Number: 2012-20-112 ; TAXDAY, 2012/11/02, T.1 ). Delays in patching software with critical vulnerabilities provides opportunities for hackers to access sensitive data that may include taxpayer data.

Tax Provisions/Greenhouse Gas Study Deadline Extended. The Treasury has extended the deadline for completion of a National Academies of Science (NAS) study to identify and rank the magnitude of tax provisions that substantially affect the emission rates of carbon dioxide and other greenhouse gases (TAXDAY, 2012/11/02, T.2 ). The two-year, $1.5-million study was originally set for completion by the end of September 2012, but the extended deadline has been pushed back to approximately April 2013.

Treasury Defends Code Sec. 36B Analysis. The Treasury Department defended its final regulations to implement the Code Sec. 36B tax credit under section 1311 of the Patient Protection and Affordable Care Act (P.L. 111-148 ) in an October 25 letter responding to a request from GOP lawmakers that the Treasury and IRS produce copies of its legal analysis and communications with the administration concerning the final regs (TAXDAY, 2012/11/01, T.1 ). Treasury Assistant Secretary for Legislative Affairs Alastair M. Fitzpayne denied that request, maintaining that public disclosure of the Treasury and IRS staff and counsel discussions could inhibit their ability to fulfill their statutory responsibilities.


Hurricane Sandy Relief. The IRS has extended the due date for filing returns and accompanying payments normally due on October 31 until November 7 (IR-2012-82 ; TAXDAY, 2012/11/01, I.2 ). This relief applies to taxpayers and preparers in an area affected by Hurricane Sandy, or otherwise impacted by the storm that hit the Mid-Atlantic and northeastern United States.

November Per Diem Rates. The U.S. State Department released a listing of maximum travel per diem allowances for travel in foreign areas (TAXDAY, 2012/11/01, I.3 ). The rates apply to all government employees and contractors, and are effective as of November 1, 2012.

TAS/Earned Income Credit Guidance. National Taxpayer Advocate Nina Olson issued interim guidance for Taxpayer Advocate Service (TAS) employees assisting taxpayers claiming the Earned Income Tax Credit (EITC) with respect to a qualifying child (TAS-13-0212-006 ; TAXDAY, 2012/10/31, I.1 ). The guidance lists the basic requirements of the EITC, provides advice on how to provide good advocacy for taxpayers, and describes other means of helping eligible taxpayers to claim the EITC.

Tax Exempt Bonds Information. The IRS Tax Exempt Bonds (TEB) Office provided information on the sale of property financed by tax-exempt bonds (TAXDAY, 2012/10/30, I.1 ).

By Jeff Carlson and Jennifer J. Rodibaugh, CCH News Staff



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