Tax News

CCH (cch.taxgroup.com) reports:

  Shipping charges on purchases of merchandise from a certain retailer's Internet store were properly included in the selling price of the merchandise and thus were subject to Illinois retailers' occupation (sales) and use tax. In so ruling, the Illinois Supreme Court affirmed the judgment of an appellate court affirming the dismissal of the plaintiffs' class action complaints.

 

CCH (cch.taxgroup.com) reports:

  The Military Spouses Residency Relief Act (MSRRA) (Public Law 111-97) was signed into law on November 11, 2009 and may affect the California income tax filing requirements for spouses of military personnel. This new law is effective for taxable year 2009. The MSRRA allows the same residency benefits permitted to military personnel under the Servicemembers Civil Relief Act (SCRA) to also apply to a military spouses non-military service income, under certain circumstances.

  The Franchise Tax Board (FT is currently updating its Publication 1032 (Tax Information for Military Personnel) with guidelines on the impacts of the MSRRA. The revised Pub. 1032 is expected before the end of 2009.

  CCH Note: The MSRRA prohibits a servicemember's spouse from either losing or acquiring a residence or domicile for purposes of taxation because he or she is absent or present in any U.S. tax jurisdiction solely to be with the servicemember in compliance with the servicemember's military orders, if the residence or domicile is the same for the servicemember and the spouse. P.L. 111-97 also prohibits a spouse's income from being considered income earned in a tax jurisdiction if the spouse is not a resident or domiciliary of such jurisdiction when the spouse is in that jurisdiction solely to be with a servicemember serving under military orders.

Announcement , California Franchise Tax Board, November 19, 2009
 

CCH (cch.taxgroup.com) reports:

  The IRS has created a pilot program allowing filers of information returns to truncate an individual payee's nine-digit identifying number on paper payee statements for calendar years 2009 and 2010 if the filers meet certain requirements. The pilot program is available only to paper payee statements in the Form 1098 series, Form 1099 series and Form 5498 series, which report payments or distributions made to an individual during a calendar year.

  The three types of identifying numbers applicable to individuals are social security numbers, IRS individual taxpayer identification numbers and IRS adoption taxpayer identification numbers. These numbers are sensitive personal information; consequently, a risk exists that the information could be misappropriated from a payee statement and misused in various ways, possibly to facilitate identify theft. The pilot program is an effort to minimize this risk. If requirements regarding the type of information return and the type of identifying number are met, the identifying number is truncated by replacing the first five digits of the nine-digit number with asterisks or Xs.

  The IRS invites interested parties to comment on the pilot program by submitting comments by May 1, 2010.

Notice 2009-93, 2009FED ¶46,531

Other References:

 
Code Sec. 6041

  CCH Reference - 2009FED ¶35,836.30

 
Code Sec. 6045

  CCH Reference - 2009FED ¶35,930.28

 
Code Sec. 6050H

  CCH Reference - 2009FED ¶36,186.075

 
Code Sec. 6722

  CCH Reference - 2009FED ¶40,240.021

  CCH Reference - 2009FED ¶40,240.40

  Tax Research Consultant

  CCH Reference - TRC: FILEBUS: 12,106

CCH (cch.taxgroup.com) reports:

  Democratic lawmakers are considering a proposal to institute a stock transaction tax in order to raise revenue to pay for job creation efforts, such as new spending on infrastructure, broadband expansion or providing new tax incentives to employers, according to House Speaker Nancy Pelosi, D-Calif. Pelosi told reporters during her weekly press conference on November 19 that some Democrats have suggested a stock transaction tax, but no decisions have yet been made to pursue that idea.

  Pelosi cautioned that such a tax might have drawbacks and would have to be part of an international rule in which other nations are involved. She explained that a stock transaction tax has long been suggested during international financial meetings, but U.S. officials have always resisted that effort. Now House Democrats are taking a closer look at the tax, even though it has yet to become a high priority for the Democratic Caucus, Pelosi said.

  One effort is being led by Rep. Peter DeFazio, D-Ore., who is seeking support for his legislation to raise $150 billion by imposing a .25-percent tax on stock transactions and a .02-percent tax on other transactions, including swaps, credit default swaps and options. Approximately half of the tax revenues would be used for deficit reduction and the remaining amount would go to a" job creation reserve" to fund the creation of good jobs, according to a Dear Colleague letter from DeFazio to other lawmakers. "The tax appropriately disincentivizes excessive speculation because much of the excessive risk on Wall Street is high-volume short-term speculative trading," he said in the letter.

  Houses Minority Whip Eric Cantor, R-Va., said the stock transaction tax is a bad idea, given that the U.S. financial markets are still recovering during the recession. Rep. Randy Neugebauer, R-Tex., said a tax on capital would lead to higher interest rates for small businesses seeking to borrow. Cantor and Neugebauer spoke during a meeting of the GOP Economic Solutions Group, which hopes to deliver a set of proposals to President Obama before he begins his economic tour in early December. Rep. Kevin Brady, R-Tex., said lawmakers are considering tax cuts for small businesses and permanent tax relief.

  By Stephen K. Cooper, CCH News Staff

CCH (cch.taxgroup.com) reports:

  The Senate is expected to hold an important procedural vote on the evening of November 21 to determine whether lawmakers will begin debate on an $849-billion health care reform bill unveiled by Democratic leaders (TAXDAY, 2009/11/19, C.2). Senate Majority Leader Harry Reid, D-Nev., filed a cloture motion on November 19 that sets up the vote two days later. If he is successful in reaching the necessary 60 votes, Reid will then be able to start work on the Patient Protection and Affordable Care Bill, which will be considered as a substitute amendment to House bill HR 3590.

  If the Senate vote is approved, the chances for final passage of health reform is strengthened; however, Reid will need 58 Democrats and two Independents to support the measure. No Republican lawmakers are expected to vote for the health care reform bill. Speaking on the Senate floor, Reid promised that the legislation would provide health care for 30 million Americans who are currently uninsured. Senate Finance Committee ranking member Charles E. Grassley, R-Iowa, said the bill might have trouble getting 60 Senate votes because it imposes new fees and taxes that will cause insurance premium increases as early as 2010.

  By Stephen K. Cooper, CCH News Staff

CBO Letter Providing Estimates of the Direct Spending and Revenue Effects of the Patient Protection and Affordable Care Act