Tax Headlines

1827

Virginia ~ Corporate Income, Franchise Taxes: Alternative Method of Apportionment Denied

The taxpayer, a nationally chartered bank headquartered in another state that maintains a mortgage loan office in Virginia, was denied permission to use an alternative method of apportionment for purposes of its capital subject to the bank franchise tax because the statutory method of apportionment was not unconstitutional or inequitable as applied to the corporation.

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Texas ~ Corporate Income Tax: Petition Claiming Franchise Tax Unconstitutional Denied

The Supreme Court of Texas denied a petition which contended that the Texas franchise tax bore no reasonable relationship to its object, the value of the privilege of doing business in Texas, and therefore violated the Texas Constitution’s mandate that taxation be equal and uniform, the Fourteenth Amendment’s Equal Protection and Due Process guarantees, and the U.S. Constitution’s Commerce Clause.

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CCH Weekly Report from Washington, D.C.

During the second of three debates prior to the election, Republican presidential candidate Mitt Romney steadfastly stood by his claim that he would cut tax rates by 20 percent without increasing the deficit despite charges by President Obama that the math did not add up. The Joint Committee on Taxation (JCT) released a report indicating that individual tax rate reduction from closing tax expenditures, credits or deductions would only generate enough savings to reduce marginal tax rates by 4 percent. The IRS has released various inflation-adjusted amounts for 2013, as well as cost-of-living adjustments (COLAs) that affect pension plan dollar limitations and other retirement-related provisions, effective January 1, 2013.

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IRS Official Summarizes PPACA for Employers, Urges Tax-Exempt Counsel to Prepare

“Because all of your clients, as tax-exempt organizations, are almost certainly all employers, they are going to need to know something about the PPACA [Patient Protection and Affordable Care Act (P.L. 111-148 )], even if they are not health care organizations themselves,” noted Catherine Livingston, deputy division counsel, IRS Tax Exempt/Government Entities, during an October 19 conference hosted by the American Law Institute Continuing Legal Education (ALI CLE) and the American Bar Association (ABA). Livingston summarized in brief the tax provisions of the PPACA that affect all employers, including tax-exempt organizations and for-profit businesses. These provisions include the reporting and minimum health coverage requirements that kick in on January 1, 2014.

Speaking specifically to lawyers representing tax-exempt organizations, Livingston said, “You are also going to need to know, as legal counsel, something about these legal provisions because there will be fundamental choices and significant tax consequences that potentially attach.”

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Illinois ~ Personal Income Tax: Claims in Potential Fraudulent Tax Shelter Case Were Not Time-Barred

The Illinois Supreme Court upheld an appellate court’s ruling, in two consolidated appeals involving taxpayers and various corporations that were found to have been formed for the purpose of creating artificial losses that would reduce the taxpayers’ personal income tax liability, that the taxpayers’ and corporations’ claims were not time-barred.

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