Daily Tax Update - May 15, 2013: Acting IRS Commissioner Steven Miller Resigns

SEQUESTRATION SCHEDULED TO TAKE EFFECT FRIDAY:  A series of automatic, across-the-board cuts to government agencies, totaling $1.2 trillion over 10 years are scheduled to go into effect on March 1 unless Congress acts.  Both Democrats and Republicans are working on plans to delay the cuts, but it appears unlikely they will meet the deadline.  The Democrats want to delay the sequester until next January and replace the sequester with $110 billion in new tax revenue and a more narrow option of spending cuts.  Republicans want to replace the cuts with more targeted spending reductions of at least equal size.  Without Congressional action to prevent sequestration, the first round of cuts will take place on March 1, 2013.  The 2013 cuts apply to “discretionary” spending and are divided between reductions to defense ($500 billion) and non-defense ($700 billion). 

  • President Obama has urged Congress to pass a short-term plan that postpones the cuts.  However, Obama said that any agreement should include more revenue from ending some tax breaks.
  • In other news, tomorrow, the Senate Finance Committee is scheduled to consider the nomination of Jacob “Jack” Lew to be Treasury Secretary.

JOINT COMMITTEE RELEASES REPORT ON TAX LEGISLATION FOR 112TH CONGRESS:  The Joint Committee on Taxation released a report that provides an explanation of tax legislation enacted in the 112th Congress.

  • The document can be accessed here.

MISCELLANEOUS GUIDANCE RELEASED:
Revenue Procedure 2013-21 provides the depreciation deduction limitations for owners of passenger automobiles (including trucks and vans) first placed in service during calendar year 2013 and the amount to be included in income by lessees of passenger automobiles first leased during calendar year 2013.  These depreciation deduction limitations and income inclusion amounts are updated annually pursuant to section 280F to reflect the automobile price inflation adjustments.