Federal Tax Headlines

1975

IRS Provides Update to Issuers of Qualified Mortgage Bonds, Mortgage Credit Certificates on Average Purchase Prices for U.S. Residences (Rev. Proc. 2012-25)

The IRS has provided issuers of qualified mortgage bonds and mortgage credit certificates with the nationwide average purchase price of residences in the United States. The current nationwide average purchase price for use in the housing cost/income ratio for new and existing residences is $214,000. Also provided are the average area purchase price safe harbors for residences located in the statistical areas of each U.S. state, the District of Columbia, Puerto Rico, the Northern Mariana Islands, American Samoa, the Virgin Islands, and Guam.

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CCH Welcomes New Tax Tracker News™ Users

CCH is pleased to welcome a number of new users to CCH’s Tax Tracker News™, CCH’s customizable daily news service that is delivered via email or personalized news webpage. This valuable solution is part of your IntelliConnect®subscription and has been automatically set up for many who had not previously enabled this functionality.

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Rules on Characterization of Gain from Foreign Corporation’s Stock-Related Distributions Amended (T.D. 9585)

The IRS has finalized regulations under Code Sec. 1248 that provide that gain recognized on the receipt of a distribution of property from a foreign corporation with respect to its stock is gain from the sale or exchange of the corporation’s stock for purposes of Code Sec. 1248(a). For purposes of Code Sec. 1248(a), a sale or exchange also includes a distribution that gives rise to gain with respect to stock under Code Sec. 302(a) or Code Sec. 331(a).

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CCH Weekly Report from Washington, D.C.

Despite a veto threat from President Obama, the House on April 19 passed a measure that would provide a 20-percent tax cut to small businesses. A day earlier, lawmakers passed another extension of highway funding and fuel taxes. The Senate, meanwhile, rejected a bill that would have levied a minimum 30-percent tax rate on the adjusted gross incomes of households earning more than $1 million annually. The IRS issued proposed regulations that would provide additional examples of program-related investments (PRIs) that a tax-exempt private foundation may make.

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Specifications for Preparing and Using Substitute Forms W-2c and W-3c Updated (Rev. Proc. 2012-22)

The IRS has issued updated requirements for preparing and submitting substitute Forms W-2c, Corrected Wage and Tax Statement, and Forms W-3c, Transmittal of Corrected Wage and Tax Statements. Along with exhibits and instructions on how to obtain the forms, guidance is provided for filing the forms electronically with the Social Security Administration (SSA), for filing substitute paper copies of Red-Ink Forms W-2c (Copy A) and W-3c with the SSA, for filing laser-printed substitute Forms W-2c (Copy A) and W-3c with the SSA, and for furnishing substitute privately printed Forms W-2c (Copies B, C, and 2) and W-3c to employees, as well as instructions for employers regarding retention of information and copies and guidance regarding approval of the forms from the Office of Management and Budget (OMB).

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Guidance Anticipated on Applicability of Normal Retirement Age Rules to Government Plans (Notice 2012-29)

The IRS and the Treasury Department anticipate issuing guidance relating to the applicability of the normal retirement age rules to governmental plans that: (a) would clarify that governmental plans that do not provide for in-service distributions before age 62 do not need to have a definition of normal retirement age and (b) would modify the age-50 safe harbor rule for qualified public safety employees. The IRS and Treasury intend to amend the 2007 normal retirement age (NRA) regulations to change the effective date for governmental plans to annuity starting dates that occur in plan years beginning on or after the later of (1) January 1, 2015, or (2) the close of the first regular legislative session of the legislative body with the authority to amend the plan that begins on or after the date that is three months after the final regulations are published in the Federal Register. Governmental plan sponsors may rely on this guidance with respect to the extension until such time as the NRA regulations are so amended.

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Proposed Regulations Add Examples of Program-Related Investments for Private Foundations (NPRM REG-144267)

The IRS has proposed regulations that would provide additional examples of program-related investments (PRIs) that a tax-exempt private foundation may make. Private foundations and their managers are subject to excise taxes if they make jeopardizing investments under Code Sec. 4944(a), while Code Sec. 4944(c) excepts PRIs from treatment as jeopardizing investments.

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House Passes 90-Day Extension of Highway Funding

House lawmakers passed a 90-day extension of highway funding and fuel taxes on April 18 that included a provision requiring President Obama to allow the completion of the Keystone XL oil pipeline project. By a vote of 293 to 127, the House passed the Surface Transportation Extension Bill of 2012, Part II (HR 4348). The legislation ran afoul of the White House as well as House Democrats who would prefer that GOP leaders consider and pass the bipartisan version of the highway reauthorization legislation that passed the Senate (TAXDAY, 2012/03/15, C.1).

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