Tax News

CCH (cch.taxgroup.com) reports:

  Virginia Gov. Timothy M. Kaine has unveiled a 2010-2012 biennial budget that includes a proposal to end the annual $950 million local personal property car tax payment that the state makes to localities to offset some portion of local car tax bills for the first $20,000 in value of personal vehicles. He also recommended getting rid of the car tax completely and suggested that the right way to do this was to impose a 1% personal income tax surcharge in Virginia and give 100% of the revenue to local governments in exchange for their agreement to completely eliminate the property tax on all personal cars, trucks, and motorcycles.

  The proposed budget assumes revenue due to an increase in the monthly landline and wireless E-911 fees and captures revenue from a proposal to increase the gross premium insurance tax applicable to property and casualty insurance. Further, the budget proposes to eliminate the sales tax dealer discount for retailers.

  In addition, Virginia will join 20 other states and decouple corporate income taxes from the federal income tax deduction for domestic production activities that are allowed under §199 of the Internal Revenue Code. The governor also proposed moving the date of conformity for taxpayers to file their taxes.

  The governor's news release can be found at
http://www.governor.virginia.gov/MediaRelations/NewsReleases/viewRelease.cfm?id=1172.

News Release, Virginia Gov. Timothy M. Kaine, December 18, 2009
 

CCH (cch.taxgroup.com) reports:

  The Social Security Administration has announced that the contribution and benefit base for 2010 remuneration and self-employment income is $106,800. The "old law" contribution and benefit base is $79,200. The "old law" base is used by the Railroad Retirement program to determine certain tax liabilities and tier II benefits, by the Pension Benefit Guaranty Corporation to determine the maximum amount of pension guaranteed under ERISA, and by the Social Security Administration to determine a year of coverage in computing certain benefits. Also, the domestic employee coverage threshold amount for 2010 has been determined to be $1,700.

Notice 2009-80, 2010FED ¶46,209

Other References:

 
Code Sec. 408

  CCH Reference - 2009FED ¶113

  CCH Reference - 2009FED ¶114

  CCH Reference - 2009FED ¶780.07

  CCH Reference - 2009FED ¶18,922.0249

 
Code Sec. 1401

  CCH Reference - 2009FED ¶32,543.01

  CCH Reference - 2009FED ¶32,543.07

  CCH Reference - 2009FED ¶32,543.26

 
Code Sec. 1402

  CCH Reference - 2009FED ¶32,580.01

 
Code Sec. 3401

  CCH Reference - 2009FED ¶33,506.024

  CCH Reference - 2009FED ¶33,506.054

 
Code Sec. 3510

  CCH Reference - 2009FED ¶33,828.01

  CCH Reference - 2009FED ¶33,828.30

 
Code Sec. 6017

  CCH Reference - 2009FED ¶35,203.01

 
Code Sec. 6041

  CCH Reference - 2009FED ¶35,836.20

  Tax Research Consultant

  CCH Reference - TRC INDIV: 63,052

  CCH Reference - TRC COMPEN: 27,056

  CCH Reference - TRC PAYROLL: 3,106

  CCH Reference - TRC PAYROLL: 3,180

  CCH Reference - TRC PAYROLL: 3,358

  CCH Reference - TRC PAYROLL: 9,052

  CCH Reference - TRC PAYROLL: 9,158

  CCH Reference - TRC PAYROLL: 9,204

 

CCH (cch.taxgroup.com) reports:

  The IRS has released interim guidance that extends the period for submitting taxpayer authorizations permitting disclosure of return information under Code Sec. 6103(c) to the IRS or an agent or contractor of the IRS. The interim rules, which will apply until the regulations under Code Sec. 6103(c) are amended, extend the period within which a signed and dated authorization must be received by the IRS from 60 to 120 days. The 60-day limit has proven problematic because some of the institutions assisting taxpayers have had difficulty obtaining and submitting the written authorizations within that time period. The interim rules apply to all such authorizations executed on or after the date that is 60 days prior to the publication of this guidance in the Internal Revenue Bulletin, which will be on January 19, 2010.

Notice 2010-8,
2010FED ¶46,206

Other References:

 
Code Sec. 6103

  CCH Reference - 2009FED ¶36,894.72

  Tax Research Consultant

  CCH Reference - TRC IRS: 9,104

CCH (cch.taxgroup.com) reports:

  The IRS has issued guidance regarding the reporting requirements of widely held fixed investment trusts (WHFITs). The new guidance provides interim rules on transition payments for trustees and "middlemen" with respect to WHFITs and trust interest holders (TIHs) and also limited penalty relief for trustees and middlemen. A middleman for this purpose is a person who hold interests in a WHFIT, but is not the ultimate beneficial owner of such interest. The guidance also provides rules for: inclusion of summary totals of WHFIT interest, dividend and miscellaneous income on Form 1099; the format of the written tax information statement required to be provided to TIHs; and the obligations of trustees and middlemen for information reporting with respect to certain non-mortgage WHFITs (NMWHFITs).

 
Reg. §1.671-5 contains the WHFIT reporting rules. The IRS had previously informed trustees and middlemen of WHFITs in Notice 2008-77, IRB 2008-40, 814, that it would not assess penalties as a result of failure to comply with WHFIT reporting rules with respect to calendar year 2008. In the new guidance, the IRS states that trustees and middlemen must comply with the Reg. §1.671-5 rules, except as provided in the new guidance.

  Under the rules, the trustee or middleman of the WHFIT must report income paid to the beneficial owner as of the record date, rather than the payment date, as had often been the previous practice. To avoid confusion, a trustee or middleman who transitions to the new rules must provide the TIH with a statement that it is transitioning from reporting based on payment dates to reporting based on record dates and that the record date was in the previous calendar year, even though the payment date is in the current year, and the TIH must include the relevant payment as a Code Sec. 481(a) adjustment. Because the IRS recognizes that the trustees and middlemen may not have time to modify their reporting systems to report payments that span the 2008 and 2009 calendar years, it will not sanction them for 2009 for a failure to comply with Reg. §1.671-5(d), (e), and (g)(2).

  A change in recognizing trust income in the year of the payment date to the year of the record date is a change in accounting method under Code Sec. 446(e), which would normally require IRS approval. In the guidance, the IRS gives consent to all cash method TIHs to make this change.

  The new guidance also sets out procedures for information reporting with respect to WHFIT income. Middlemen and trustees may report such information on Form 1099-INT, Form 1099-DIV, or Form 1099-MISC, as appropriate, with a summary total included on Form 1099. Information may be furnished to TIHs via electronic and composite statements and may include summary totals, provided such statement provides enough information to the TIH to enable it to properly report its income.

  Finally, the IRS determined that a trustee or middleman may satisfy its reporting requirements under Reg. §1.671-5(e) by providing a TIH of a royalty or commodity trust (two types of NMWFITs) with the address of a website where information can be found sufficient to meet the requirements of that regulation, if the middleman or trustee also provides the TIH with the option of receiving a written statement containing such information.

Notice 2010-4,
2010FED ¶46,205

Other References:

 
Code Sec. 671

  CCH Reference - 2009FED ¶24,686.0525

  CCH Reference - 2009FED ¶24,686.86

  Tax Research Consultant

  CCH Reference - TRC ESTTRUST: 36,300

CCH (cch.taxgroup.com) reports:

  Senate Majority Leader Harry Reid, D-Nev., has laid out the steps he plans to take to pass the Senate's $848-billion sweeping health care reform overhaul before Christmas. With the expected unveiling on December 19 of his manager's amendment, which includes all the changes negotiated with members over the past several weeks, and, hopefully, the approval of moderate holdout Sen. Ben Nelson, D-Nev., Reid plans to begin the procedural steps that will likely lead to final passage before December 25. If Reid fails to lock in all 60 votes from caucus members, however, the health care reform debate could be pushed into the final week of December while leadership continues to negotiate problem areas.

  The three-step process, according to an internal memo circulated by Senate Assistant Majority Leader Richard J. Durbin, D-Ill., would begin with Reid filing cloture on his manager's amendment, a substitute amendment, and the underlying bill (HR 3590) on December 19. Procedural rules would call for a vote on the manager's amendment late on December 21, followed by a vote on the Reid substitute amendment on December 22. On December 23, lawmakers would vote to approve cloture, which limits debate, on the health reform measure. Assuming all goes smoothly, the Senate could proceed to a final vote on the bill on December 24.

  By Jeff Carlson, CCH News Staff