Daily Tax Update - May 7, 2013: Rep. Ryan Suggests Debt Ceiling Agreement Could be Tied to Tax Reform

REP. RYAN SUGGESTS DEBT CEILING AGREEMENT COULD BE TIED TO TAX REFORM:  Today, House Budget Committee Chairman Paul Ryan suggested that tax reform and raising the debt ceiling could be linked.  Ryan said, “I just want to get tax reform and a budget agreement and I’m open to various ways of seeing how we can make that happen.”

House Republicans are meeting next week to discuss possible ways to proceed on the debt ceiling.  The current debt ceiling bill suspends the debt limit through May 18.

The House is voting this week on a bill that would allow the Treasury Secretary to pay interest on debt and deficits with incoming tax revenue in case the debt ceiling hits its ceiling.  The Full Faith and Credit Act (H.R. 807) would require the government to pay the principal and interest on public debt and the Social Security trust funds before paying its other bills if it hits the debt ceiling.  The government only could borrow money above the debt limit for those payments.

MISCELLANEOUS GUIDANCE RELEASED:
Notice 2013-32 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).

TAX BILLS INTRODUCED MAY 6:

1. [113rd] H.R.1840 : To amend the Internal Revenue Code of 1986 to exclude from income and employment taxes real property tax abatements for seniors and disabled individuals in exchange for services.
Sponsor: Rep Tsongas, Niki [MA-3] (introduced 5/6/2013)      Cosponsors (1) 
Committees: House Ways and Means 
Latest Major Action: 5/6/2013 Referred to House committee. Status: Referred to the House Committee on Ways and Means.


2. [113rd] S.862 : A bill to amend section 5000A of the Internal Revenue Code of 1986 to provide an additional religious exemption from the individual health coverage mandate.
Sponsor: Sen Ayotte, Kelly [NH] (introduced 5/6/2013)      Cosponsors (7) 
Committees: Senate Finance 
Latest Major Action: 5/6/2013 Referred to Senate committee. Status: Read twice and referred to the Committee on Finance.