Apparently a lot has happened on the tax front while I was visiting my uncle in Maryland.
(1) On Monday, the Senate failed to pass a bill to repeal the provision in the “health care reform” Act that requires nearly 40 million U.S. businesses to file 1099-MISC forms for every vendor that sells them more than $600 in goods beginning with tax year 2012.
The new 1099 requirements are opposed by both parties, but Senators could not agree on how, or whether, to make up the supposed $19 billion lost over the next decade by repeal.
This is the second time an attempt to repeal this provision has failed.
(2) According to “Obama, Hill Leaders Disagree in First Post-Election Bipartisan Meeting” from BNA SOFTWARE -
“President Obama Nov. 30 met with the party leaders of the House and Senate to begin forming a legislative agenda for the lame-duck session, but meeting participants agreed only to form a working group to come up with a compromise on extending tax cuts.
Later in the day, Democratic leaders in the House announced they were hoping to move legislation as early as Dec. 2 that would make permanent the Bush-era tax cuts for families earning less than $250,000.
Following the meeting, Obama called it a good start and that the American people would hold both parties accountable, but that there would have to be additional meetings soon, potentially at Camp David.”
Republican and Democrats continue to disagree on extending the “Bush tax cuts” for 200-250K+ earners.
A Wall Street Journal article suggests that “Signs Point to Extending All Tax Cuts Temporarily”. At this point in time this is the only real alternative – extend all “Bush” cuts for 2011 and perhaps 2012, and begin a serious discussion of Tax Reform, with the President’s panel report (see below) as a starting point as soon as Congress returns in January.
(3) The National Commission on Fiscal Responsibility and Reform issued its final report titled “The Moment of Truth”
It seems the commission co-chairmen didn’t change their basic framework from what they unveiled in the draft report last month but rather refined it to be more specific and realistic. The final report will be voted on by panel members on Friday.
I plan to read the tax portion of the report this morning, and will have more to say on it perhaps tomorrow.
(4) IRS Commissioner Douglas Shulman sent identical letters to Senate Finance Committee Chair Max Baucus and ranking Republican Sen. Charles Grassley and House Ways and Means Chairman Sander Levin and ranking GOP member Rep. Dave Camp on December 1st on December 1st urging Congress to pass an alternative minimum tax (AMT) patch and extend various individual income tax breaks before the upcoming tax filing season starts.
In the letter Shulman said -
"While I know you and your colleagues have a difficult challenge to enact legislation this year, I want to stress that it would be extremely detrimental to the entire tax filing season and to tens of millions of taxpayers if tax law changes affecting 2010 are deferred and then retroactively enacted in 2011.”
He expressed concern about the difficulty the IRS would face in dealing with amended returns if Congress lets the provisions expire and retroactively reinstates them next year.
"The IRS would likely be faced with millions of taxpayers who filed and paid additional tax based on a law that later changed. These impacted taxpayers would then need to file amended returns, which could take months to process and send refunds."
Most importantly -
"Specifically, it would be an unprecedented and daunting operational challenge to open the tax filing season under one set of tax laws with respect to AMT and extenders, begin accepting tax returns, and then have the law change.
The overall strain on IRS service operations would affect not only AMT taxpayers and those who benefit from extenders, but would also spill over into service disruptions and/or delayed refunds for tens of millions of other taxpayers."
TTFN
(1) On Monday, the Senate failed to pass a bill to repeal the provision in the “health care reform” Act that requires nearly 40 million U.S. businesses to file 1099-MISC forms for every vendor that sells them more than $600 in goods beginning with tax year 2012.
The new 1099 requirements are opposed by both parties, but Senators could not agree on how, or whether, to make up the supposed $19 billion lost over the next decade by repeal.
This is the second time an attempt to repeal this provision has failed.
(2) According to “Obama, Hill Leaders Disagree in First Post-Election Bipartisan Meeting” from BNA SOFTWARE -
“President Obama Nov. 30 met with the party leaders of the House and Senate to begin forming a legislative agenda for the lame-duck session, but meeting participants agreed only to form a working group to come up with a compromise on extending tax cuts.
Later in the day, Democratic leaders in the House announced they were hoping to move legislation as early as Dec. 2 that would make permanent the Bush-era tax cuts for families earning less than $250,000.
Following the meeting, Obama called it a good start and that the American people would hold both parties accountable, but that there would have to be additional meetings soon, potentially at Camp David.”
Republican and Democrats continue to disagree on extending the “Bush tax cuts” for 200-250K+ earners.
A Wall Street Journal article suggests that “Signs Point to Extending All Tax Cuts Temporarily”. At this point in time this is the only real alternative – extend all “Bush” cuts for 2011 and perhaps 2012, and begin a serious discussion of Tax Reform, with the President’s panel report (see below) as a starting point as soon as Congress returns in January.
(3) The National Commission on Fiscal Responsibility and Reform issued its final report titled “The Moment of Truth”
It seems the commission co-chairmen didn’t change their basic framework from what they unveiled in the draft report last month but rather refined it to be more specific and realistic. The final report will be voted on by panel members on Friday.
I plan to read the tax portion of the report this morning, and will have more to say on it perhaps tomorrow.
(4) IRS Commissioner Douglas Shulman sent identical letters to Senate Finance Committee Chair Max Baucus and ranking Republican Sen. Charles Grassley and House Ways and Means Chairman Sander Levin and ranking GOP member Rep. Dave Camp on December 1st on December 1st urging Congress to pass an alternative minimum tax (AMT) patch and extend various individual income tax breaks before the upcoming tax filing season starts.
In the letter Shulman said -
"While I know you and your colleagues have a difficult challenge to enact legislation this year, I want to stress that it would be extremely detrimental to the entire tax filing season and to tens of millions of taxpayers if tax law changes affecting 2010 are deferred and then retroactively enacted in 2011.”
He expressed concern about the difficulty the IRS would face in dealing with amended returns if Congress lets the provisions expire and retroactively reinstates them next year.
"The IRS would likely be faced with millions of taxpayers who filed and paid additional tax based on a law that later changed. These impacted taxpayers would then need to file amended returns, which could take months to process and send refunds."
Most importantly -
"Specifically, it would be an unprecedented and daunting operational challenge to open the tax filing season under one set of tax laws with respect to AMT and extenders, begin accepting tax returns, and then have the law change.
The overall strain on IRS service operations would affect not only AMT taxpayers and those who benefit from extenders, but would also spill over into service disruptions and/or delayed refunds for tens of millions of other taxpayers."
TTFN
No comments:
Post a Comment