Daily Tax Update - December 11, 2013: Lawmakers Debating Two-Year Budget Deal

LAWMAKERS DEBATING TWO-YEAR BUDGET DEAL:  The House could vote tomorrow on a budget agreement negotiated by Rep. Paul Ryan (R-WI) and Sen. Patty Murray (D-WA).  The deal sets spending levels for 2014 and 2015.  If the agreement is passed by both the House and Senate and signed by President Obama, it will avert the government shutdown deadline of January 15.  The agreement includes no new taxes, and does not make any changes to entitlement programs.

According to the summary, “The Bipartisan Budget Act of 2013 would set overall discretionary spending for the current fiscal year at $1.012 trillion—about halfway between the Senate budget level of $1.058 trillion and the House budget level of $967 billion.  The agreement would provide $63 billion in sequester relief over two years, split evenly between defense and non-defense programs.  In fiscal year 2014, defense discretionary spending would be set at $520.5 billion, and non-defense discretionary spending would be set at $491.8 billion.  The sequester relief is fully offset by savings elsewhere in the budget.  The agreement includes dozens of specific deficit-reduction provisions, with mandatory savings and non-tax revenue totaling approximately $85 billion.  The agreement would reduce the deficit by between $20 and $23 billion.”

Click to read the SummarySection by Section and Legislative Text .

FINANCE COMMITTEE TO VOTE ON IRS COMMISSIONER NOMINATION FRIDAY: Today, the Senate Finance Committee completed its hearing on the nomination of John Andrew Koskinen to be Commissioner of the Internal Revenue Service.  The Committee will vote on Koskinen’s nomination on Friday.  The Committee will also vote on the nomination of Sarah Bloom Raskin to be Deputy Secretary of the Treasury.

At today’s hearing, Chairman Baucus said, “If confirmed, Mr. Koskinen will face many challenges. The IRS plays an important role in tax reform, it is key to the Affordable Care Act’s implementation, and perhaps most importantly, it must win back the American people’s trust.  That means undoing the damage done by the Inspector General’s report on the IRS’ handling of 501(c)(4) applications. Mr. Koskinen has a history of succeeding in demanding roles: At Freddie Mac in the heat of the financial crisis.  At the helm of the District of Columbia’s financial turnaround in the early 2000s.  As a turnaround artist in the private sector.  Even as the leader of the team that addressed Y2k concerns. He is the right person to take on this challenge, and with filing season approaching, the IRS needs its leader in place.”

IRPAC ISSUES ANNUAL REPORT FOR 2013:  The Information Reporting Program Advisory Committee (IRPAC) released its annual report for 2013, including numerous recommendations to the Commissioner of Internal Revenue on new and existing issues in tax administration.

The full 2013 IRPAC Public Report is available on IRS.gov.

MISCELLANEOUS GUIDANCE RELEASED:

Revenue Procedure 2013-39 describes and updates the procedure for requesting the IRS authorize a person to act as agent under section 3504 of the Internal Revenue Code (Code) and §31.3504-1 of the Employment Tax Regulations for purposes of Chapters 21, 22, 24, and 25 of the Code.  Special instructions are also set forth for agents authorized to perform acts for purposes of Chapter 23 of the Code.

Notice 2013-85 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) of the Internal Revenue Code.     

Notice 2013-74 provides guidance on in-plan Roth rollovers, the practitioner community is looking forward to this guidance. 

Notice 2013-84 contains the 2013 Cumulative List of Changes in Plan Qualification Requirements (2013 Cumulative List) described in section 4 of Rev. Proc. 2007-44, 2007-2 C.B. 54.