Daily Tax Update - July 10, 2013: House Subcommittee Approves IRS Budget Cut

House Subcommittee Approves IRS Budget Cut:  The House Appropriations Financial Services and General Government Subcommittee approved a fiscal year 2014 spending bill that would cut IRS funding 24% from 2013 levels.  The bill would increase the budget of the Treasury Inspector General for Tax Administration by $5.5 million.

Hatch Says Baucus Committed to Revenue-Neutral Tax Reform Bill:  Ranking Senate Finance member Orrin Hatch said that Senate Finance Chairman Max Baucus has agreed that the tax reform bill the committee crafts will be revenue-neutral.

Hatch said, “As far as I'm concerned [the revenue] battle is over.  We both have agreed to revenue neutrality too, so I expect [Baucus] to live up to that."  Hatch said that it was his understanding that the tax reform bill they craft would be revenue neutral.  Hatch added, “That's my understanding.  But let me just say this:  It won't be just the two of us putting it together.  We're going to take the best advice of all of the members of the Finance Committee and see what we can do to come up with a bill that really does have a great bipartisan approach to it."  However, when asked about Hatch’s remarks, Baucus said, “I think in the end, when the bill is on the president's desk, there'll be some revenue."

IRS Provides Transition Relief From Reporting Requirements of Affordable Care Act:  The IRS released Notice 2013-45, which provides transition relief for 2014 from (1) the information reporting requirements applicable to insurers, self-insuring employers, and certain other providers of minimum essential coverage under section 6055, (2) the information reporting requirements applicable to large employers under section 6056, and (3) the employer shared responsibility provisions under section 4980H.  

The notice states, “This transition relief will provide additional time for input from employers and other reporting entities in an effort to simplify information reporting consistent with effective implementation of the law.  This transition relief also is intended to provide employers, insurers, and other providers of minimum essential coverage time to adapt their health coverage and reporting systems.  Both the information reporting and the Employer Shared Responsibility Provisions will be fully effective for 2015.  In preparation for that, once the information reporting rules have been issued, employers and other reporting entities are encouraged to voluntarily comply with the information reporting provisions for 2014.  This transition relief through 2014 for the information reporting and Employer Shared Responsibility Provisions has no effect on the effective date or application of other Affordable Care Act provisions.”

Miscellaneous Guidance Released:
Notice 2013-46 provides guidance as to the corporate bond weighted average interest rate and the permissible range of interest rates specified under section 412(b)(5)(B)(ii)(II) 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 section 430(h)(2).  In addition, the notice provides guidance as to the interest rate on 30-year Treasury securities under section 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008, the 30-year Treasury weighted average rate under section 431(c)(6)(E)(ii)(I), and the minimum present value segment rates under section 417(e)(3)(D) as in effect for plan years beginning after 2007.  The rates in the notice reflect certain changes implemented by the Moving Ahead for Progress in the 21st Century Act, Public Law 112-141 (MAP-21).