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November 23, 2009

Federal Headlines

Senate Approves Motion to Take Up Health Reform Bill

 

The Senate on Nov. 21 approved by a 60-39 margin a procedural motion to take up a sweeping $849 billion health care reform measure, but some moderate Democrats said their vote to proceed does not ensure their support for final passage. The full Senate returns from Thanksgiving recess on Nov. 30, and lawmakers are expected to engage in a lengthy debate stretching into late December.

 

Senate Democratic leadership warned that if the bill is not finished by the holidays, the Senate could take an abbreviated break and quickly return to work "We have to finish it in the Senate or it's going to be maybe a long lunch break over Christmas," Majority Whip Dick Durbin, D-Ill., said Nov. 22 on NBC's "Meet The Press."

 

Durbin said it would still be possible to pass the legislation if debate slips into early January, but cautioned that the process would become more complicated. "It becomes more complex because both the president and the Congress want to shift from this critically important issue, which is central to our economy, to the economy and jobs."

 

Central issues to the looming debate include whether or not to provide a public option, statutory language disallowing any federal funding for abortions, and a 40-percent tax on high end insurance plans that could hit middle income earners. Democratic leaders are expected to negotiate with moderate Democrats on a compromise solution regarding a government sponsored health insurance plan.

 

Republicans will likely remain united in their drive to kill the bill, although Democratic leaders are holding out hope that one or two GOP members may relent and vote for final passage. Some Republican votes may be critical to passing health reform if Reid cannot ultimately win the support of some wavering Democrats.

 

Senate Finance Committee Chairman Max Baucus, D-Mont., who guided his Committee through passage of that panel's portion of health reform legislation, said lawmakers now have the chance to fully address the growing health care crisis. "Now, on this floor, we have the opportunity to consider this plan. We have the chance to make it even better. We hope to have a full debate," said Baucus.

 

Following the vote, the White House issued a statement praising the Senate's decision to proceed. "The President is gratified that the Senate has acted to begin consideration of health insurance reform legislation. Tonight's historic vote brings us one step closer to ending insurance company abuses, reining in spiraling health care costs, providing stability and security to those with health insurance, and extending quality health coverage to those who lack it. The President looks forward to a thorough and productive debate."

 

CCH Comment. CCH's Tax Briefing on the Senate's Health Care Bill can be found at http://tax.cchgroup.com/Legislation/Heathcare-Reform-Nov-19-2009.pdf.

 

By Jeff Carlson, CCH News Staff

SAP on HR 3590 --Patient Protection and Affordable Care Act

 

Base Period T-Bill Rate for DISC Shareholders Issued (Rev. Rul. 2009-36)

 

A table outlining the base period Treasury bill rate for the period that ended on September 30, 2009, has been released by the IRS. The base period T-bill rate for the covered period is 0.630 percent. The figures in the table are to be used to determine the amount of interest to be paid each year by a shareholder of a domestic international sales corporation (DISC). Such amount is equal to the product of the shareholders' DISC-related deferred tax liability for the year and the base period T-bill rate.

Rev. Rul. 2009-36, 2009FED ¶46,532

Other References:

 

Code Sec. 995

 

CCH Reference - 2009FED ¶29,033.20

 

Tax Research Consultant

 

CCH Reference - TRC INTLOUT: 15,512

Procedures Released for Electing Expanded Loss Carryback Option (IR-2009-105; Rev. Proc. 2009-52)

 

The IRS has issued guidance describing when and how taxpayers can elect to carry back applicable net operating losses (NOLs) under relief provided by section 13 of the Worker, Homeownership, and Business Assistance Act of 2009 (P.L. 111-92). Section 13 of the Act amended Code Sec. 172(b)(1)(H) to allow taxpayers to elect to carry back applicable NOLs for a period of three, four or five years, or a loss from operation for four or five years, to offset taxable income in those previous years. In addition, section 13 amended Code Sec. 810(b) to allow losses from the operations of life insurance companies to be treated in the same manner as NOLs.

 

Any NOL or loss from operations carried back five years can only offset a maximum of 50 percent of the taxpayer's taxable income for that fifth preceding year. This relief is available to all taxpayers with business losses except those that received payments under the Troubled Asset Relief Program (TARP), and applies to taxpayers that incurred NOLs or losses from operations in tax years ending after December 31, 2007, and before January 1, 2010.

IR-2009-105,

2009FED ¶46,533

Rev. Proc. 2009-52, 2009FED ¶46,534

Other References:

 

Code Sec. 172

 

CCH Reference - 2009FED ¶12,014.3245

 

CCH Reference - 2009FED ¶12,014.331

 

Code Sec. 810

 

CCH Reference - 2009FED ¶25,879.85

 

Tax Research Consultant

 

CCH Reference - TRC BUSEXP: 45,154

CCH Reference - TRC NOL: 6,154.15

CCH Reference - TRC NOL: 12,103.15

 
 

State Headlines

Iowa --Multiple Taxes: Governor Orders Tax Credit Review

 

Iowa Gov. Chet Culver announced that he has ordered a review of each of Iowa's 30 tax credit programs. To complete the review, the governor has asked the directors of six state agencies that oversee tax credit programs to submit a review of their respective tax credit programs. Specifically, the governor has asked for submissions to include the following information: (1) a general description of the purpose of the tax credit; (2) minimum, maximum, and average value of tax credits issued; (3) contingency liability for each tax credit; (4) the number of tax credits issued each year; (5) the number of individuals and/or businesses served by the tax credit; (6) whether the tax credit is transferable and, if so, how many times; (7) whether the tax credit is refundable; (8) processes for oversight and regulation of the tax credit; (9) the return on investment for the tax credit; (10) data on the fiscal impact of the tax credit for the past ten years, if available; and (11) a description of what information is currently made available to the public for the tax credit(s) administered by each agency.

 

The governor also has asked that the directors serve on a review panel and submit a report to the governor addressing oversight, accountability, transparency, public reporting, and cost-benefit of the programs, and which programs should be continued, curtailed, and/or eliminated. Iowa Department of Management (IDOM) Director Dick Oshlo has been named to chair the panel. The review will be due to IDOM at the close of business on December 4, 2009. The panel will hold two public meetings to discuss the review in Des Moines and Cedar Rapids the week of December 7, 2009. Dates and locations of the public meetings are yet to be determined.

 

The text of the press release is available at http://www.governor.iowa.gov/index.php/press_releases/single/194/.

Release, Iowa Governor's Office, November 19, 2009

 

Ohio --Personal Income Tax: Full Senate Vote on Bill to Delay Tax Cut Cancelled

 

The Ohio Senate cancelled the scheduled full Senate vote on House Bill 318 which, if enacted, would delay the planned 4.2% decrease in the personal income tax set to take effect for 2009 and would freeze the rates at the 2008 levels. The bill has passed the Ohio House of Representatives and Gov. Ted Strickland has already issued support for delaying the tax cut. (TAXDAY 2009/10/02, S.17)

 

Subscribers may view the text of the bill, as passed by the House.

 

 

Telephone Conversation, Office of Ohio State Representative Kathleen Chandler, November 20, 2009

 
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