Tax Headlines

1827

More Tax Reform Hearings Planned, According to Ways and Means Letter

The House Ways and Means Committee on March 1 approved its annual Views and Estimates letter that broadly explains the tax panel’s agenda for the upcoming fiscal year. One major topic of activity for fiscal year 2013 will be continuing the series of hearings on ways to simplify the tax code for individuals, families and employers, according to the letter signed by Chairman Dave Camp, R-Mich. The letter gives a brief overview of the committee’s plans on issues such as corporate tax reform, job growth and individual taxation.

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Reid Offers Revised Manager’s Amendment to Highway Bill

Senate Majority Leader Harry Reid, D-Nev., on March 1 filed a revised manager’s amendment to the Highway Investment, Job Creation and Economic Growth Bill of 2012 (Sen 1813), that incorporates revisions from relevant committees, including a tax title by the Senate Finance Committee. The new measure tweaks portions of the Finance Committee’s work with the bulk of the changes coming from the Senate Commerce Committee and the Senate Banking Committee.

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Minnesota ~ Personal Income Tax: No Official Agreement Reached Yet With Wisconsin on Reciprocity

The Minnesota Department of Revenue has announced that while progress has been made in discussions regarding the restoration of the personal income tax reciprocity agreement between Minnesota and Wisconsin, no official agreement has been reached. According to the department’s statement, some issues have been tentatively resolved; however, agreements still need to be reached and finalized on a number of issues, including the calculation of net revenue loss, interest payments, and annual adjustments based on population changes.

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California ~ Personal Income Tax: Nonconformity to Increased Self-Employment Tax Deduction Noted

The California Franchise Tax Board has issued guidance noting that for the 2011 and 2012 taxable years, California does not conform to the temporary federal amounts of self-employment tax (relating to the Old Age, Survivors and Disability Insurance tax (OASDI /Social Security)) that may be deducted in computing adjusted gross income for personal income tax purposes.

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President and Congressional Leaders Look for Common Ground in Legislative Agenda

President Obama met with bipartisan congressional leaders on February 29 to discuss possible areas of agreement on legislation that could be enacted in 2012. White House Press Secretary Jay Carney noted that there are elements within the House Republican jobs bill that overlap with the president’s priorities, namely in assisting small businesses to grow and become more competitive.

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Evidence Insufficient to Hold Investors in Jojoba Partnership Liable for Negligence Penalties (Altman, CA-9)

The Tax Court’s decision holding a married couple liable for additions to tax for underpayment of tax due to negligence for claiming a loss arising from an investment in a limited liability partnership was reversed. The Court erred in finding that the husband’s personal investigation of the investment was insufficient to permit him to make a reasonable decision that the project had the prospect of profitability. Moreover, the evidence did not support the determination that the husband’s consultation with a professional tax advisor and his related conduct in claiming the deduction was insufficient.

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Tax-Exempt Organization Not Liable for Excise Tax on Reversion, But Not Entitled to Refund (Research Corporation, TC)

A tax-exempt organization was not liable for an excise tax based on an asset reversion from a terminated retirement plan, but the court lacked jurisdiction to grant a refund of the tax paid by the organization. The taxpayer had been a tax-exempt organization under Code Sec. 501(c)(3) and its predecessors since the creation of the income tax, although it had received unrelated business taxable income (UBTI) during some years. It maintained a defined benefit retirement plan, which it terminated.

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Virginia ~ Sales and Use Tax: House Passes Bill to Require Tax Collection for Online Retailers With In-State Distribution Facilities

The Virginia House of Delegates has passed a bill that would create a presumption that a dealer has sufficient activity within Virginia to require it to register for the collection of retail sales and use taxes if any commonly controlled person maintains a distribution center, warehouse, fulfillment center, office, or similar location within Virginia that facilitates the delivery of tangible personal property sold by the dealer to its customers.

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District of Columbia ~ Corporate, Personal Income Taxes: Lump-Sum Retirement Distributions Subject to Withholding

The District of Columbia has enacted emergency legislation that provides for personal income tax withholding from a retirement distribution that is a lump-sum payment of a payee’s entire account balance. Previously, withholding applied to any distribution from a retirement plan or retirement account if the distribution was subject to federal withholding.

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