Daily Tax Update - July 24, 2013: Senate Bill Would Increase IRS Funding Over Previous Year

Senate Bill Would Increase IRS Funding Over Previous Year:  The Senate Appropriations Financial Services and General Government Subcommittee passed a $12.07 billion IRS budget for fiscal 2014. The full Appropriations Committee will vote on the bill tomorrow.  The bill proposes an increase of $276.5 million above the fiscal 2013 enacted level.

Chairman Tom Udall (D-NM) said, “The IRS has endured major funding reductions in each of the past three years. Our approach is a constructive one.  Slashing resources by nearly 20 percent, as the House has done, I believe is counterproductive. Our bill will push the IRS to remedy the serious management shortcomings and fix internal controls, as recently identified by the inspector general."

The House Appropriations Committee passed a bill last week that would cut IRS funding 24 percent from the enacted fiscal 2013 levels.

Miscellaneous Guidance Released:
Revenue Procedure 2013-29 clarifies a taxpayer’s use of the deferral method of accounting for advance payments that are received by the taxpayer for the sale of gift cards that are redeemable by an unrelated entity.  Where a gift card is redeemable by an entity whose financial results are not included in the taxpayer’s applicable financial statement (AFS), the taxpayer will recognize the payment in income to the extent the gift card is redeemed.  For a taxpayer without an AFS, the taxpayer will recognize the payment in income when it is earned, which, in this situation, is when the gift card is redeemed.  Any payment received by the taxpayer that is not recognized in income in the year of receipt, must be recognized in the subsequent year.  

Revenue Ruling 2013-13 provides various prescribed rates for federal income tax purposes including the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate, the adjusted federal long-term tax-exempt rate. These rates are determined as prescribed by § 1274.  The rates are published monthly for purposes of sections 42, 382, 412, 1288, 1274, 7520, 7872, and various other sections of the Internal Revenue Code.

Tax Bills Introduced July 23:

1.[113rd] H.R.2789 : To delay enrollment in qualified health plans in State or Federally facilitated Exchanges until 1 year after final rules are published establishing the verification and other procedures to be used to implement section 1411 of the Patient Protection and Affordable Care Act and carrying out sections 6055 and 6056 of the Internal Revenue Code of 1986.
Sponsor: Rep Ellmers, Renee L. [NC-2] (introduced 7/23/2013)      Cosponsors (None) 
Committees: House Energy and Commerce 
Latest Major Action: 7/23/2013 Referred to House committee. Status: Referred to the House Committee on Energy and Commerce.


2. [113rd] H.R.2797 : To amend the Internal Revenue Code of 1986 to allow taxpayers to designate overpayments of tax as contributions and to make additional contributions to the Homeless Veterans Assistance Fund, and for other purposes.
Sponsor: Rep Israel, Steve [NY-3] (introduced 7/23/2013)      Cosponsors (7) 
Committees: House Ways and Means; House Veterans' Affairs 
Latest Major Action: 7/23/2013 Referred to House committee. Status: Referred to the Committee on Ways and Means, and in addition to the Committee on Veterans' Affairs, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.


3. [113rd] S.1342 : A bill to amend the Internal Revenue Code of 1986 to permit expensing of certain depreciable business assets for small businesses.
Sponsor: Sen Flake, Jeff [AZ] (introduced 7/23/2013)      Cosponsors (2) 
Committees: Senate Finance 
Latest Major Action: 7/23/2013 Referred to Senate committee. Status: Read twice and referred to the Committee on Finance.


4. [113rd] S.1346 : A bill to amend the Internal Revenue Code of 1986 to increase the alternative tax liability limitation for small property and casualty insurance companies.
Sponsor: Sen Harkin, Tom [IA] (introduced 7/23/2013)      Cosponsors (4) 
Committees: Senate Finance 
Latest Major Action: 7/23/2013 Referred to Senate committee. Status: Read twice and referred to the Committee on Finance.