Tuesday, September 17, 2013
New procedures for equitable innocent spouse relief are released
Failure to Fund Government Would Create “Massive Economic Turmoil,” President Says
President Obama warned House Republicans on September 16 that the current stand-off over the federal budget, due to expire at the end of September, would create economic havoc and reverse the progress achieved to this point in pulling the country out of its economic malaise. The president specifically directed his remarks at a group of House Republicans who are promising to shut down the government at the end of the month if they are unable to withhold funding for the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148).
"We've cleared away the rubble from the financial crisis and we've begun to lay a new foundation for economic growth and prosperity," said Obama during a press conference marking the five-year anniversary of the financial crisis. "Let's stop the threats. Let's stop the political posturing. Let's keep our government open. Let's pay our bills on time. Let's pass a budget."
House Speaker John Boehner, R-Ohio is in the middle of a revolt among some 50 House members. Disagreements within the House Republican caucus over legislation that would temporarily fund the federal government and force the Senate to vote on defunding the PPACA have led to legislative gridlock. Republican leaders on September 11 found themselves short of votes and were forced to pull from consideration on the House floor a continuing resolution bill that would have kept the federal government operating for the first three months of the new fiscal year beginning on October 1 (TAXDAY, 2013/09/12, C.1).
Faced with a restive caucus, Boehner released a statement accusing Obama of playing partisan politics in his speech and called on the president to work with Republicans "to delay his health care law for everyone—just as he's done for big businesses—expand energy production, simplify our tax code and more."
Obama defended his health care law, claiming that there is no real evidence that the PPACA is holding back economic growth. "I will never convince some Republicans about the merits of "Obamacare." I understand that. And, I'm more than willing to work with them where they've got specific suggestions that they can show will make our health care system work better," said the president. "Repealing the Affordable Care Act, making sure that 30-million people don't get health insurance and people with pre-existing conditions continue to be locked out of the health insurance market, that's not an agenda for economic growth," said Obama.
The president also chided Republicans on the issue of tax reform, saying that they have yet to put out any realistic ideas for fixing the tax code after saying less than three months ago that tax reform was one of their top priorities. "I put forward a plan that serious people in both parties should be able to support: a deal that lowers the corporate tax rate for businesses and manufacturers. Haven't heard back from them yet," said the president.
By Jeff Carlson, CCH News Staff
Updated Guidance Provided for Taxpayers Seeking Equitable Innocent Spouse Relief from Tax Liabilities (Rev. Proc. 2013-34)
the threshold requirements for any request for equitable relief;
the conditions under which the IRS will make streamlined relief determinations granting equitable relief under Code Sec. 6015(f) from an understatement of income tax or an underpayment of income tax reported on a joint return, or the operation of community property law under Code Sec. 66(c) ; and
a nonexclusive list of factors for consideration in determining whether relief should be granted under Code Sec. 6015(f) because it would be inequitable to hold a requesting spouse jointly and severally liable when the conditions for streamlined relief are not met (these factors also will apply in determining whether to relieve a spouse from income tax liability resulting from the operation of community property law under the equitable relief provision of Code Sec. 66(c)).
The new procedure is effective for requests for relief filed on or after September 16, 2013. In addition, the procedure is effective for requests for equitable relief pending on September 16, 2013, whether with the Service or in a case docketed with a federal court. Rev. Proc. 2003-61, 2003-2 CB 296, is superseded.
Rev. Proc. 2013-34, 2013FED ¶46,517
Other References:
Code Sec. 66
CCH Reference – 2013FED ¶6051.075
CCH Reference – 2013FED ¶6051.20
Code Sec. 6015
CCH Reference – 2013FED ¶35,192.01
CCH Reference – 2013FED ¶35,192.023
CCH Reference – 2013FED ¶35,192.25
Tax Research Consultant
CCH Reference – TRC INDIV: 18,052.30
CCH Reference – TRC INDIV: 18,058
CCH Reference – TRC INDIV: 18,058.05
CCH Reference – TRC INDIV: 18,058.10
CCH Reference – TRC INDIV: 18,058.15
CCH Reference – TRC INDIV: 18,060
CCH Reference – TRC INDIV: 24,154
CCH Reference – TRC INDIV: 24,154.15
15% of Americans live in poverty
Monday, September 16, 2013
Uncle Sam collects $284 billion more in taxes so far in 2013
That sizable reduction, making the budget deficit around $753 billion for the first 11 months of the 2013 fiscal year, is noteworthy.
At this point in 2012, the budget deficit was $1.164 trillion. The previous low budget deficit was $1.23 trillion in 2011, while the high was $1.89 trillion in 2009, according to Treasury Department data.
Even the CBO is a tad surprised at the shrinkage (insert your own Seinfeld-inspired joke here), noting in its blog that "the federal budget deficit has fallen faster than we expected a few years ago."
Source: CBO Monthly Budget Review for August 2013
Money, money, money: But I'm a tax geek, meaning I tend to focus on revenue. So the $284 billion in collections recorded by the CBO is this week's By the Numbers figure.
Just where did the money come from?
The biggest chunk came from individual income and payroll taxes. Together those collections increased 14 percent, or by $251 billion.
Payroll taxes withheld from workers' paychecks rose by $160 billion, or 10 percent, primarily because the 2 percentage point payroll tax cut expired at the end of 2012. Effective this January, the full 6.2 percent portion of FICA again started coming out of workers' pay.
As for income taxes, January also marked the appearance of higher tax rates for some folks earning larger amounts.
Taxes that weren't withheld: Other taxes that weren't withheld also added to Uncle Sam's bottom line. This category of taxes increased by 27 percent, or by $91 billion.
Most of these nonwithheld taxes were the 2012 annual Form 1040 (and 1040A and 1040EZ) filings submitted between February through April. Those payments, says the CBO, were much larger than 2012's amounts.
Part of the tax money during this period also came from increased estimated payments, made in the spring and summer for the current tax year. Remember, you can continue to do your part toward budget deficit reduction by sending in your third estimated tax amount for 2013 that's due Monday, Sept. 16.
Corporate tax contributions: Companies contributed, too. The CBO says that net corporate income taxes during this period were higher by $30 billion, or 16 percent.
The budget analysts surmise this is likely because of growth in taxable profits in calendar year 2012 and the first half of calendar year 2013.
These numbers should give the House and Senate some maneuverability in their upcoming fiscal 2014 budget wrangling.
Still, don't expect the process to be easy or quick.
Conventional wisdom is that Congress will pass a stopgap spending bill, possibly as soon as next week, to keep spending at current levels for two to three months while lawmakers hammer out a final budget deal.
Of course, there's not been much that's been conventional about this current Congress.
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