Procedures Provided for Claiming Refund of Coal Excise Tax (Ann. 2008-103)

The IRS has provided guidance to domestic coal producers and exporters regarding the submission of claims for refund of the coal excise tax pursuant to section 114 of the Energy Improvement and Extension Act of 2008 (P.L. 110-343). The Act provides criteria for refunds of the coal excise tax paid under Code Sec. 4121 on coal exported on or after October 1, 1990, and on or before October 3, 2008. These claims, which must be filed on a paper Form 8849, Claim for Refund of Excise Taxes, Schedule 6, Other Claims, must be filed by November 3, 2008.

Announcement 2008-103

Other References:

Code Sec. 4121

CCH Reference - ETR ¶11,815.01

Tax Research Consultant

CCH Reference - TRC EXCISE: 6,152.05

IRS Announces 2009 Cost of Living Adjustments for Pension Plans (Notice 2008-102)

As indicated in IR-2008-118, the IRS has announced cost-of-living adjustments (COLAs) applicable to dollar limitations on benefits under qualified retirement plans and to other provisions affecting such plans that take effect on January 1, 2009.

The maximum limitation for the Code Sec. 415(b)(1)(A) annual benefit for defined benefit plans increases from $185,000 to $195,000, while the Code Sec. 415(c)(1)(A) limitation for defined contribution plans increases to $49,000. Also, for participants who separated from service before 2009, the Code Sec. 415(b)(1)(B) limitation is computed by multiplying the participant's compensation limit, as adjusted through 2008, by 1.0530. Various other dollar amounts were adjusted as follows:

--A new table has been issued showing the applicable percentage under Code Sec. 25B with respect to elective deferrals and IRA contributions by certain individuals.

--The limitation on wages under Code Sec. 45A regarding individuals eligible for the Indian employment credit is $40,000 for tax years beginning in 2008 and will increase to $45,000 for tax years beginning in 2009.

--The compensation amounts under Reg. §1.61-21(f)(5)(i) concerning the definition of "control employee" for fringe benefit valuation purposes remains is increased from $90,000 to $95,000. The compensation amount under Reg. §1.61-21(f)(5)(iii) is increased from $185,000 to $195,000.

--The applicable dollar amount under Code Sec. 219(g)(3)(B)(i) used to determine the amount of reduction for the limitation on deduction for taxpayers who are active participants and for spouses who are not active participants in certain pension plans has been adjusted. The applicable amount for taxpayers filing a joint return is increased from $85,000 to $89,000. If the taxpayer's spouse is not an active participant, the applicable amount for the spouse is $166,000. The applicable dollar amount for all other taxpayers, except for married taxpayers filing separately, is $55,000.

--The annual compensation limit under Code Secs. 401(a)(17), 404(l), 408(k)(3)(C) and 408(k)(6)(D)(ii) increases from $230,000 to $245,000. The annual compensation limitation under Code Sec. 401(a)(17) for eligible participants in certain governmental plans that, under the plan as in effect on July 1, 1993, allowed COLAs to the compensation limitation under the plan to be taken into account, increases from $345,000 to $360,000.

--The Code Sec. 402(g)(1) limitation on the exclusion for elective deferrals under Code Sec. 402(g)(3), which affects elective deferrals to Code Sec. 401(k) plans and to the government's Thrift Savings Plan, among other plans, increases from $15,500 to $16,500.

--The Code Sec. 408(k)(2)(C) compensation amount for simplified employee pension plans (SEPs) is increased from $500 to $550.

--The Code Sec. 408(p)(2)(E) limitation regarding SIMPLE retirement accounts is increased from $10,500 to $11,500.

--The adjusted gross income limitation under Code Sec. 408A(c)(3)(C) for determining the maximum Roth IRA contribution for married taxpayers filing a joint return or for taxpayers filing as a qualifying widow(er) is increased from $159,000 to $166,000. The adjusted gross limitation for all other taxpayers (other than married taxpayers filing separate returns) is increased from $101,000 to $105,000.

--The dollar amount under Code Sec. 409(o)(1)(C)(ii) for determining the maximum account balance in an employee stock ownership plan (ESOP) subject to a five-year distribution period increases from $935,000 to $985,000. The dollar amount used to determine the lengthening of the five-year distribution period increases from $185,000 to $195,000.

--The Code Sec. 414(q)(1)(B) limitation used in the definition of a highly compensated employee increases from $105,000 to $110,000.

--The dollar limitation under Code Sec. 414(v)(2)(B)(i)) for catch-up contributions to an applicable employer plan other than a plan described in Code Sec. 401(k)(11) or 408(p) for individuals aged 50 or over increases from $5,000 to $5,500. The limitation under Code Sec. 414(v)(2)(B)(ii) for catch-up contributions to an applicable employer plan described in Code Sec. 401(k)(11) or 408(p) for individuals aged 50 or over remains unchanged at $2,500.

--The dollar limitation under Code Sec. 416(i)(1)(A)(i) concerning the definition of key employee in a top-heavy plan increases from $150,000 to $160,000.

--The Code Sec. 457(e)(15) limitation on deferrals with respect to deferred compensation plans of state and local governments and tax-exempt organizations increases from $15,500 to $16,500.

Plan administrators who received favorable determination letters need not request new letters solely due to yearly amendments adjusting their plans' maximum limitations.

Notice 2008-102, 2008FED ¶46,634

Other References:

Code Sec. 25B

CCH Reference - 2008FED ¶3838.03

CCH Reference - 2008FED ¶3838.07

CCH Reference - 2008FED ¶3838.25

Code Sec. 45A

CCH Reference - 2008FED ¶4440.021

Code Sec. 61

CCH Reference - 2008FED ¶5907.032

CCH Reference - 2008FED ¶5907.044

CCH Reference - 2008FED ¶5907.27

Code Sec. 219

CCH Reference - 2008FED ¶12,662.01

Code Sec. 401

CCH Reference - 2008FED ¶17,903.01

CCH Reference - 2008FED ¶17,903.025

CCH Reference - 2008FED ¶17,903.03

CCH Reference - 2008 FED ¶17,903.105

CCH Reference - 2008FED ¶17,903.15

CCH Reference - 2008FED ¶18,112.0245

CCH Reference - 2008FED ¶18,112.0265

CCH Reference - 2008FED ¶18,112.036

CCH Reference - 2008FED ¶18,112.048

Code Sec. 402

CCH Reference - 2008FED ¶18,221.01

CCH Reference - 2008FED ¶18,221.10

Code Sec. 404

CCH Reference - 2008FED ¶18,347.01

CCH Reference - 2008FED ¶18,347.025

CCH Reference - 2008FED ¶18,348.028

CCH Reference - 2008FED ¶18,348.107

CCH Reference - 2008FED ¶18,349.022

Code Sec. 408

CCH Reference - 2008FED ¶18,922.0249

CCH Reference - 2008FED ¶18,922.0253

CCH Reference - 2008FED ¶18,922.0264

CCH Reference - 2008FED ¶18,922.1068

Code Sec. 408A

CCH Reference - 2008FED ¶18,930.024

CCH Reference - 2008FED ¶18,930.197

Code Sec. 409

CCH Reference - 2008FED ¶18,951.03

CCH Reference - 2008FED ¶18,951.20

Code Sec. 414

CCH Reference - 2008FED ¶19,173.25

CCH Reference - 2008FED ¶19,198.25

Code Sec. 415

CCH Reference - 2008 FED ¶19,218.022

CCH Reference - 2008 FED ¶19,218.023

CCH Reference - 2008 FED ¶19,218.0235

CCH Reference - 2008 FED ¶19,218.03

CCH Reference - 2008 FED ¶19,218.034

CCH Reference - 2008 FED ¶19,218.27

Code Sec. 416

CCH Reference - 2008FED ¶19,253.024

Code Sec. 457

CCH Reference - 2008FED ¶21,536.035

CCH Reference - 2008FED ¶21,536.036

CCH Reference - 2008FED ¶21,536.0365

CCH Reference - 2008FED ¶21,536.037

CCH Reference - 2008FED ¶21,536.07

Tax Research Consultant

CCH Reference - TRC COMPEN: 27,252.10

CCH Reference - TRC COMPEN: 27,252.20

CCH Reference - TRC COMPEN: 27,508.10

State Headlines

Indiana --Corporate Income Tax: Bank's Economic Presence Enough to Create Nexus

A national bank's economic presence in Indiana was sufficient to create a substantial nexus with the state and subject it to the financial institutions tax (FIT). The bank did not maintain a place of business in Indiana yet solicited business from Indiana customers and received interest and fees from these customers. Furthermore, its FIT returns showed significant gross receipts from its Indiana customers. The bank argued that physical presence was required to meet the substantial nexus requirement under the Commerce Clause of the U.S. Constitution. However, the Indiana Tax Court found that the U.S. Supreme Court has not extended the physical presence requirement beyond the realm of sales and use taxes.

Other References:

Explanations at ¶25-240