Tax Headlines

1827

Regulations Modifying Definition of United States Property Issued (T.D. 9589, NPRM REG-107548-11)

The IRS has issued final, temporary and proposed regulations relating to the treatment of up-front payments made under certain notional principal contracts (NPC) for U.S. federal income tax purposes. The temporary regulations establish an exception to the definition of U.S. property for obligations of U.S. persons arising from certain up-front payments made with respect to certain contracts that are properly classified as NPC for U.S. federal income tax purposes and that are cleared by a derivatives clearing organization or clearing agency.

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Speakers Criticize IRS Repair Regulations as Impractical and Burdensome

Speakers at a May 9 IRS hearing criticized the IRS’s proposed and temporary “repair” regulations (T.D. 9564, I.R.B. 2012-14, 614; NPRM REG-168745-03, I.R.B. 2012-14, 718, TAXDAY, 2011/12/28, I.2) as being impractical and burdensome for both large and small businesses. One speaker, Leslie Schneider of Ivins, Phillips & Barker Chartered, Washington, D.C., suggested that a “major rethink” by the IRS is needed.

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Vermont ~ Multiple Taxes: Legislature Passes IRC Conformity Update, Corporate Minimum Tax Increase, Temporary Exemption of Remotely Accessed Software

Legislation passed by the Vermont House of Representatives and the Senate would update the state’s conformity with federal income tax laws for personal and corporate income tax purposes, increase the corporate income minimum tax for corporations with gross receipts in excess of $2 million, temporarily exempt charges for remotely access software from sales and use tax, and make other changes.

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Motion to Dismiss Petitions to Review Collection Action Granted Despite Pending Bankruptcy Proceeding (Settles, TC)

An individual’s motions to dismiss his petitions to review a collection action while a bankruptcy proceeding was still pending were granted because dismissing the petitions did not violate the automatic stay under 11 USC Sec. 362(a)(8), which only stays the commencement or continuation of an action. Granting the motions was proper because his tax liabilities had already been adjudicated in bankruptcy court (TAXDAY, 2011/06/24, J.2) and, therefore, the goal of judicial economy was been satisfied.

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Student Loan Bill Tagging S Corps for Revenue Falls in Senate

A Senate bill that would hold certain S corporations liable for payroll taxes failed on May 8 to garner the needed 60 votes to prevent a filibuster, falling by a vote of 52 to 45. The Stop the Student Loan Interest Rate Hike Bill of 2012 (Sen 2343) won the support of all Senate Democrats, but Republicans rejected the legislation because it calls for a new tax in order to offset the $5.9-billion price tag.

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