Daily Tax Update - July 24, 2014: President Obama Calls for Action on Anti-Inversion Legislation

PRESIDENT OBAMA CALLS FOR ACTION ON ANTI-INVERSION LEGISLATION :  In a speech in California today, President Obama urged Congress to approve anti-inversion legislation sponsored by Sen. Carl Levin and Rep. Sander Levin (“The Stop Corporate Inversions Act of 2014.”)  

The President said, “These companies are cherry-picking the rules, and it damages the country’s finances.”  President Obama further discussed inversions and said, “It adds to the deficit. It sticks you with the tab to make up for what they are stashing offshore.”  He added, “I don’t care if it’s legal — it’s wrong. . . . You shouldn’t get to call yourself an American company only when you want a handout from the American taxpayers.”

KENNETH WOOD NAMED TRANSFER PRICING OPERATIONS ACTING DIRECTOR:  Today, the IRS announced that it has selected Kenneth Wood, to be acting director of Transfer Pricing Operations after the current director, Samuel Maruca, departs on August 1.  Wood is currently senior manager in the Advance Pricing and Mutual Agreement Program.

MISCELLANEOUS GUIDANCE RELEASED: 
Revenue Procedure 2014-46 provides the 2014 monthly national average premium for qualified health plans that have a bronze level of coverage for taxpayers to use in determining their maximum individual shared responsibility payment under § 5000A(c)(1)(B) of the Internal Revenue Code and § 1.5000A-4 of the Income Tax Regulations.  This revenue procedure also provides an explanation of the methodology used to determine the monthly national average premium amount. 

Revenue Procedure 2014-37 provides the methodology to determine the applicable percentage table in § 36B(b)(3)(A) of the Internal Revenue Code used to calculate an individual’s premium assistance credit amount for taxable years beginning after calendar year 2014.  It also provides the methodology to determine the required contribution percentage in § 36B(c)(2)(C)(i)(II) used to determine whether an individual is eligible for affordable employer-sponsored minimum essential coverage for purposes of § 36B for plan years beginning after calendar year 2014.  Additionally, Revenue Procedure 2014-37 reproduces the required contribution percentage, as determined under guidance issued by the Department of Health and Human Services, used to determine whether an individual is eligible for an exemption from the individual shared responsibility payment because of a lack of affordable minimum essential coverage under § 5000A(e)(1)(A) for plan years beginning after calendar year 2014.

Revenue Procedure 2014-41 provides calculation methods a taxpayer may use to resolve the interrelationship between the section 162(l) deduction and the premium tax credit under section 36B.  It provides an iterative calculation and alternative calculation taxpayers may use, as well as examples demonstrating the calculations.

Notice 2014-42 provides procedural guidance relating to the annual fee imposed on branded prescription drug manufacturers and importers under §9008 of the ACA.