The 112th Congress rang in the new year by passing the American Taxpayer Relief Act of 2012 (HR 8 ) on January 1, making the Bush-era tax rates permanent for individuals and couples with annual income over $400,000 and $450,000, respectively. President Obama signed the measure on January 2. The IRS, meanwhile, has published its annual revisions to the general procedures for ruling requests, technical advice memoranda (TAM), determination letters, and user fees, as well as areas on which the Associate Chief Counsel Offices will not rule.
White House and Congress
President Obama signed the American Taxpayer Relief Act of 2012 (HR 8 ) on January 2 (TAXDAY, 2013/01/04, W.1 ). The new law permanently indexes the alternative minimum tax for inflation, continues Medicare payment reimbursement rates for physicians and extends unemployment insurance benefits for one year. Single filers with incomes over $250,000 ($300,000 for joint filers) will see their itemized deductions phased out under the new law. Wealthier taxpayers would also pay a top capital gains rate of 20 percent. After negotiations between Vice President Biden and Senate Minority Leader Mitch McConnell, R-Ky., the Senate first passed the tax legislation to avert the fiscal cliff by a vote of 89 to 9 early in the morning on January 1, followed by a House vote of 257 to 167 late that night (TAXDAY, 2013/01/02, C.1 ), sending the measure to the president.
IRS Oversight Board E-Filing Report. The IRS Oversight Board released its Electronic Filing 2012 Annual Report to Congress, in which it reported that individual e-filed returns grew by 7 percent in 2012, breaking the 80-percent e-file goal set by the IRS Restructuring and Reform Act of 1998 (RRA 98) (P.L. 105-206 ) (TAXDAY, 2013/01/07, I.1 ). Approximately 119-million individual income tax returns, about 81 percent, were filed electronically in 2012.
2013 Withholding Tables Updated. The IRS has released the updated income-tax withholding tables for 2013 reflecting changes by Congress (IR-2013-1 , Notice 1036 ; TAXDAY, 2013/01/04, I.1 ). The updated tables, show the new rates in effect for 2013 and supersede the tables issued on December 31, 2012 (IR-2012-105 ; TAXDAY, 2013/01/03, I.14 ).
TIPS Regulations. The IRS has made permanent temporary and proposed regulations issued on December 5, 2011 (T.D. 9561 , I.R.B. 2012-5, 341; NPRM REG-130777-11 , I.R.B. 2012-5, 347) on the tax treatment of Treasury inflation-protected securities (TIPS) (T.D. 9609 ; NPRM REG-140437-12 ; TAXDAY, 2013/01/04, I.2 ). Further temporary regulations, the text of which serves as the text of proposed regulations, have been issued, and the temporary and proposed regulations issued at the same time as the final regulations address amortization by a taxpayer of the bond premium and other issues.
2013 Annual Updates. The IRS has published its annual revisions to the general procedures for ruling requests, TAMs, determination letters, and user fees, as well as areas on which the Associate Chief Counsel Offices will not rule (Rev. Procs. 2013-1 , 2013-2 , 2013-3 , 2013-4 , 2013-5 , 2013-6 , 2013-7 , 2013-8 ; TAXDAY, 2013/01/03, I.2-I.9 ). The new and revised procedures are generally effective beginning January 2, 2013, with the exception of some procedures for certain user fees and employee plan determination letters, which will be effective from February 1, 2013.
EPCRS Procedures. The IRS released a new procedure updating the Employee Plans Compliance Resolution System (EPCRS) for sponsors of retirement plans that are intended to satisfy the requirements of Code Secs. 401(a) , 403(a) , 403(b) , 408(k) or 408(p) , but that have not met these requirements for a period of time (Rev. Proc. 2013-12 ; TAXDAY, 2013/01/03, I.11 ).
New Tax ID Number. The IRS has proposed regulations creating a new taxpayer identification number, which would be known as a truncated taxpayer identification number, or TTIN (NPRM REG-148873-09 ; TAXDAY, 2013/01/03, I.15 ). This number would be available as an alternative to the Social Security number, the IRS individual taxpayer identification number, or the IRS adoption taxpayer identification number for use by the filer of certain information returns to identify the person being furnished with a statement.
Shared Responsibility Payment Guidance. The IRS has released proposed regulations that provide guidance under Code Sec. 4980H with respect to an employer’s shared responsibility for employee health coverage (NPRM REG-138006-12 ; TAXDAY, 2012/12/31, I.1 ). The regulations provide guidance and additional clarity regarding the identification of a full-time equivalency (FTE) employee for purposes of determining whether an employer is an applicable large employer subject to the shared responsibility provisions.
By Stephen K. Cooper and Jennifer J. Rodibaugh, CCH News Staff