Tax Headlines

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Kentucky ~ Sales and Use Tax: Disaster Relief Tax Refund Enacted

Kentucky Gov. Steve Beshear has signed legislation that provides legal owners of buildings damaged or destroyed by recent inclement weather in designated counties a refund of sales and use tax paid on purchases of building materials used to repair or replace these buildings. The legislation pertains to storms that occurred in Kentucky from February 29, 2012, through March 3, 2012, and only to buildings damaged or destroyed in counties declared federal disaster areas due to the storms. For a current list of these qualifying counties, see the Kentucky Department of Revenue’s website at http://revenue.ky.gov/taxrelief.htm. In this context, “building materials” means tangible personal property that becomes a permanent part of a building.

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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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Tax Panel Approves Changes to Refundable Child Tax Credits

The House Ways and Means Committee on April 18 approved legislation that would make changes to the child tax credit program by ending refundable payments to individuals without Social Security numbers. The new limits on the Additional Child Tax Credit program were passed as part of the committee’s requirement to find savings under the House-passed budget bill (HConRes112) (TAXDAY, 2012/03/30, C.3).

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North Dakota ~ Property Tax: Special Assessment Was Not Arbitrary, Capricious, or Unreasonable

A local North Dakota improvement district’s special assessment that was imposed upon a taxpayer’s property was not proven to be arbitrary, capricious, or unreasonable and was therefore upheld on appeal. The special assessment used to pay for the various physical improvements, and the related, properly included, engineer fees, attorney fees, and interest expenses, was duly authorized, and all of the statutory notice and review requirements were followed.

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All States ~ Multiple Taxes: CCH Webinar: Preparing California Tax Form 540NR: Issues Related to Part-Year and Nonresident Income Tax Returns Scheduled for April 26

CCH Tax and Accounting is hosting a live two-hour Webinar, Preparing California Tax Form 540NR: Issues Related to Part-Year and Nonresident Income Tax Returns, on Thursday, April 26, 2012, at 1 p.m. Eastern; noon Central; 11 a.m. Mountain; 10 a.m. Pacific. This two-hour CCH Webinar, presented by highly regarded instructor, presenter and practitioner, Kathleen K. Wright, CPA, J.D., LL.M., M.B.A., will discuss what the FTB looks for in a residency audit.

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