Tax Legislative Activity
Congressman Says Tax Extenders Could Be Handled This Spring
Representative Richard Neal (D-MA), a member of the House Ways and Means Committee, stated that if comprehensive reform stalls, the committee could take up tax extenders “sometime around February or March.”
Tax extenders are provisions that are due to expire at the end of 2013, including the research and development credit, wind credit and the exception for active financing, among many others. If taken up in 2014, some extenders provisions would have retriggered on a retroactive basis – a common procedure for this type of legislation.
Budget deal eschews tax increases for fee increases
Last week’s budget agreement, which passed the House 332-94 with support from both parties, eschews tax increases and instead incorporates “user fees” that would bring additional revenue into the federal government.
For example, the Transportation Security Administration airline security fee will rise from $2.50 per flight to $5.60. The money raised from this fee increase will be deposited into the Treasury’s general fund and will help pay for the increase in discretionary spending.
Baucus plans more reform drafts with energy perhaps next
Senate Finance Committee Chairman Max Baucus (D-MT) intends to release additional reform drafts soon, where the next topic covered could be energy policy.
Last month, Chairman Baucus released three reform drafts on international tax, tax administration, and cost recovery and accounting. Chairman Baucus and the committee staff have asked for interested parties to provide input by January 17, 2014.
This week’s hearings
Wednesday, December 18: The Senate Finance Subcommittee on Social Security, Pensions, and Family Policy will hold a hearing titled, “The Role of Social Security, Defined Benefits, and Private Retirement Accounts in the Face of the Retirement Crisis.”
Tax regulatory Activity
Treasury attorney says FATCA effective dates will not be postponed
Treasury Attorney Advisor Quyen Huynh told practitioners on December 12 that the effective date of the Foreign Account Tax Compliance Act (FATCA) will not be postponed, despite calls for a delay.
Withholding and new account opening procedures are set to begin on July 1, 2014. Ms. Huynh demurred when asked whether withholding rules could be relaxed in jurisdictions that are pursuing intergovernmental agreements with the United States.
Another Treasury official, John Sweeney, stated that final forms related to FATCA reporting could be published in January or February of 2014. Draft forms have already been circulated.
In addition, a guidance package intended to coordinate chapters 3 and 61 with the new chapter 4 FATCA regulations will be published in early 2014, while the final foreign financial institution agreement will be out before the end of 2013.