Daily Tax Update - March 11, 2013: House and Senate Budget Committees Expected to Release FY 2014 Budget Resolutions Tomorrow

Join us!  In conjunction with the 2013 TEI Midyear Conference, we cordially invite you to join us for a cocktail reception the night of Monday, March 18th at the Grand Hyatt in Washington, DC.  The reception will be held in The Grand Café from 6-8pm.

HOUSE AND SENATE BUDGET COMMITTEES EXPECTED TO RELEASE FY 2014 BUDGET RESOLUTIONS TOMORROW:  The House and Senate Budget Committees are expected to release their fiscal year 2014 budget resolutions on March 12. 

  • In an interview yesterday on the budget resolution, House Budget Committee Chairman Paul Ryan said, “And we also propose pro-growth tax reform which we think with this current revenue line, we can have a very pro-growth tax reform system to bring all rates down.  That's good for economic growth.  That's good for job creation and hard working taxpayers, by having less loopholes in the tax code.  No more crony politics and stop picking winners and losers and pro-growth tax reforms, those things are still achievable and we achieve it in the budget and reflect those realities that you just mentioned.”  Ryan continued, “[B]y continuing to raise taxes to fuel more spending, you'll never get tax reform, which is critical for economic growth and job creation.  And, so, yes, we have an impasse right now, which is the president wants to continue raising taxes, not for deficit reduction but to fuel more spending, and, we see tax reform as an incredibly important goal, and policy, to getting pro-growth economics, to getting businesses growing again and hiring people.  Tax reform to us is an economic growth-generating exercise.  Tax reform to the president, so far, seems to be a spending growth exercise, to spend money, revenue-generating exercise.”  Ryan added, “And I do believe that there's a consensus for tax reform.  There are a lot of moderate Democrats, especially in the Senate, that are in favor of lowering tax rates by closing loopholes.  That's what we're proposing.  Stop picking winners and losers in Washington, let people keep more of their hard-earned money, you don't lose revenue for the federal government, and you make it easier for small businesses to create jobs and hire more workers.”
  • In other news, House Ways and Means Committee Chairman Dave Camp is scheduled to release his small business tax reform discussion draft tomorrow.

BRAZILIAN SENATE PASSES U.S.-BRAZIL TAX INFORMATION EXCHANGE AGREEMENT:  On March 7, the Brazilian Federal Senate approved the 2007 U.S.-Brazil Tax Information Exchange Agreement (TIEA). The TIEA will enter into force when each party has notified the other in writing of the completion of its internal procedures necessary for entry into force. The TIEA will enter into force when each party has notified the other in writing of the completion of its internal procedures necessary for entry into force. TIEA approval was considered by the Brazilian Federal Revenue Authority (RFB) and the U.S. Department of the Treasury as a pre-condition for the launching of formal negotiations toward a U.S.-Brazil bilateral tax treaty.

This Agreement applies to the following taxes imposed by the parties:

"(a) in the case of the United States of America:

(i) federal income taxes;

(ii) federal taxes on self-employment income;

(iii) federal estate and gift taxes; and

(iv) federal excise taxes;

(b) in the case of the Federative Republic of Brazil:

(i) individual and corporate income tax (IRPF and IRPJ, respectively);

(ii) industrialized products tax (IPI);

(iii) financial transactions tax (IOF);

(iv) rural property tax (ITR);

(v) contribution for the program of social integration (PIS);

(vi) social contribution for the financing of the social security (COFINS); and

(vii) social contribution on net profits (CSLL)."

MISCELLANEOUS GUIDANCE RELEASED:

Notice 2013-14, providing guidance on § 309 of the American Taxpayer Relief Act of 2012, Pub. L. No. 112-240, enacted Jan. 3, 2013. The Act amended § 51 of the Internal Revenue Code to extend the Work Opportunity Tax Credit through Dec. 31, 2013. The notice also provides employers additional time beyond the 28-day deadline in § 51(d)(13) for submitting Form 8850, Pre-screening Notice and Certification Request for the Work Opportunity Credit, to Designated Local Agencies. 

Notice 2013-23 provides guidance as to the corporate bond weighted average interest rate and the permissible range of interest rates specified under § 412(b)(5)(B)(ii)(II) of the Internal Revenue Code as in effect for plan years beginning before 2008.  It also provides guidance on the corporate bond monthly yield curve (and the corresponding spot segment rates), and the 24-month average segment rates under § 430(h)(2).  In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under § 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008, the 30-year Treasury weighted average rate under § 431(c)(6)(E)(ii)(I), and the minimum present value segment rates under § 417(e)(3)(D) as in effect for plan years beginning after 2007.  The rates in this notice reflect certain changes implemented by the Moving Ahead for Progress in the 21st Century Act, Public Law 112-141 (MAP-21).