Tax Headlines

1827

CCH Weekly Report from Washington, D.C.

The House passed legislation that provides a substitute to the automatic cuts set for January 2 that are mandated by the Budget Control Act of 2011 (P.L. 112-25) and includes a provision that raises revenue through tighter controls on refundable child tax credits. The Senate rejected a student loan bill that would have held certain S corporations liable for payroll taxes. Meanwhile, the IRS issued final, temporary and proposed regulations relating to the treatment of up-front payments made under certain notional principal contracts (NPCs) for U.S. federal income tax purposes.

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House Passes Budget Sequestration Bill

The House passed the Sequester Replacement Reconciliation Bill (HR 5652) on May 10 by a vote of 218 to 199. The legislation, which provides a substitute to the automatic cuts set for January 2 mandated by the Budget Control Act of 2011 (P.L. 112-25), is unlikely to reach a vote in the Senate. The cuts were drafted by six House panels, including the House Ways and Means Committee, which approved tighter controls on refundable child tax credits claimed by taxpayers without Social Security numbers.

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Nebraska ~ Property Tax: Motion by Fax Proper, Timely Filed on Monday Following Saturday Due Date

The Nebraska Supreme Court has held that a motion for rehearing filed before the Tax Equalization and Review Commission (TERC) was timely filed since when a due date falls on a Saturday, Sunday, or legal holiday, the petition is timely filed so long as it is filed by the next business day. The due date for the taxpayer to file was Saturday, March 26, 2011, and the taxpayer filed by facsimile on Monday, March 28, 2011. Filing by facsimile was proper in order to meet the due date since any motion or objection to a motion may be filed with TERC by facsimile if the original is mailed or delivered to the TERC within 24 hours of the facsimile transmission. As a result of the proper filing of the motion, the taxpayer’s subsequent filing for judicial review was timely as well.

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Minnesota ~ Sales and Use, Property Taxes: Click-Through Nexus Provision Passed by Senate; House and Senate Pass Stadium Exemptions

The Minnesota Senate has passed legislation that includes a sales and use tax click-through nexus provision, as well as property, sales, and use tax exemptions for a proposed new National Football League stadium. The Minnesota House of Representatives has also passed legislation that includes property, sales, and use tax exemptions for a new football stadium, but that legislation does not include the click-through nexus provision. These provisions are part of proposals for financing a new stadium for the Minnesota Vikings football team’s use and for other activities.

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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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