Daily Tax Update - January 3, 2013: President Obama Signs Fiscal Cliff Bill Into Law By Autopen

PRESIDENT OBAMA SIGNS FISCAL CLIFF BILL INTO LAW BY AUTOPEN:  On January 2, President Obama signed H.R. 8, the American Taxpayer Relief Act of 2012, into law by autopen.  Rather than have the bill flown to Hawaii where the President is on vacation, the President directed that the bill be signed with the White House autopen.  Obama is the first President to use the autopen to sign legislation and has used it twice before to sign bills into law.

  • Most of the provisions are effective retroactively to the beginning of this year.  Although the middle class tax hikes in the fiscal cliff were averted by the passage of the bill, Congress still faces challenges in the coming months in trying to reach an agreement on further spending cuts, raising the debt ceiling, and reforming the tax code.
  • A summary of the bill can be accessed here.
  • The legislative text of the bill can be accessed here.

IRS PROVIDES UPDATED WITHHOLDING GUIDANCE FOR 2013:  Today, the IRS released updated income-tax withholding tables for 2013 reflecting this week’s changes by Congress.  According to the IRS, "The updated tables, issued today after President Obama signed the changes into law, show the new rates in effect for 2013 and supersede the tables issued on December 31, 2012.  The newly revised version of Notice 1036 contains the percentage method income-tax withholding tables and related information that employers need to implement these changes.  In addition, employers should also begin withholding Social Security tax at the rate of 6.2% of wages paid following the expiration of the temporary two-percentage-point.”

113TH CONGRESS CONVENES – BOEHNER RE-ELECTED HOUSE SPEAKER – REPUBLICAN FINANCE MEMBERS NAMED:  The first session of the 113th Congress convened today and the new members of the House and Senate were sworn in.  Rep. John Boehner was re-elected Speaker of the House.

  • Senate Republicans announced that Sens. Johnny Isakson (R-GA), Rob Portman (R-OH), and Patrick Toomey (R-PA) will fill the three open Republican seats on the Finance Committee.  Sen. Tom Coburn (R-OK) will not serve on the Committee this Congress.

INTERNAL REVENUE SERVICE - CIRCULAR 230 DISCLOSURE:  As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any plan or arrangement addressed herein.

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