Tax Headlines


President Presses for Buffett Rule

President Obama on April 11 took the second opportunity in two days to press for congressional approval of the so-called “Buffett Rule.” Named after the billionaire investor, the legislation (Paying a Fair Share Bill of 2012 (Sen 2230)) would impose a minimum 30-percent tax rate on the adjusted gross incomes of households earning more than $1 million annually.

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Corporation Denied Deductions for Contributions to Welfare Benefit Plan; No Constructive Receipt of Income on Termination of Insurance Policies; Penalties Imposed (White, TCM)

A married couple’s corporation’s deduction of contributions to a purported welfare benefit plan was disallowed. The husband was a doctor and the wife a nurse, and they owned a corporation that purchased a welfare benefit plan. The corporation made contributions to the plan over several years, for which the taxpayers claimed deductions. The plan used the contributions to purchase life insurance policies on the taxpayers and their two children. After several years, the initial plan terminated, and the taxpayers transferred the insurance policies to a new plan.

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Maine ~ Personal Income Tax: House Passes Rate Reduction Bill

The Maine House of Representatives has passed a revised version of a bill that, if enacted, would gradually reduced personal income tax rates in the future until there is a single rate of 4%. The rate reductions would be funded by excess revenue deposited into the Tax Relief Fund for Maine Residents. The original bill was passed by the Maine Senate (TAXDAY, 2012/03/20, S.14), but rejected by the House of Representatives (TAXDAY, 2012/03/30, S.8).

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2012 Inflation Adjustments and Reference Prices for Renewable Energy Production Credit Released (Notice)

The IRS has published the inflation adjustment factors and reference prices to be used in computing the renewable electricity production credit for calendar year 2012. The inflation adjustment factors and references prices apply to sales in calendar year 2012 of kilowatt hours of electricity produced in the United States or a U.S. possession from qualified energy resources, and to 2012 sales of refined coal and Indian coal produced in the U.S. or one of its possessions.

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