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Tag Archive for Government Shutdown

Government Shutdown, One Tax Provision In Debt Ceiling Deal

TaxConnections Picture - Debt CeilingWednesday’s deal to fund the federal government through January 15 and to extend the federal government’s borrowing authority through February 7 in the end contained only one tax provision, making a minor change to 2010’s health care legislation. The agreement, H.R. 2775, was passed by the Senate in an 81–18 vote on Wednesday and by the House of Representatives in a 285–144 vote. President Barack Obama is expected to sign it immediately, without an increase in the debt ceiling, since a U.S. debt default could happen soon.

A separate part of the agreement, not included in the bill but made in a separate Senate motion, will create a framework for formal budget negotiations. These will be scheduled to conclude by December 13, with negotiators charged with making recommendations for long-term budget and deficit reduction goals.

The change to the health care law under the agreement reached Wednesday sets up a new requirement that the eligibility of people who receive cost-sharing reductions under Section 1402 of the Patient Protection and Affordable Care Act, P.L. 111-148, or the health insurance premium tax credit under Sec. 36B, be verified. Under the agreement, the secretary of Health and Human Services must ensure that health insurance exchanges verify that individuals applying for the credit or cost-sharing Read more

U.S. Tax Court Filings During The Shutdown

government-closedWe previously posted on Saturday, October 5, 2013, Suspension of Tax Court Operations During Government Shutdown regarding the cancellation of Tax Court Trial Sessions Scheduled to Begin October 7 and 8, 2013.

What does the taxpayer with a Statutory Notice of Deficiency or Statutory Notice of Determination, which gives the taxpayer ninety days from the date of the notice file a Tax Court petition to when the Tax Court is closed?

Without a timely filed petition, the Tax Court lacks subject-matter jurisdiction over the taxpayer’s case and the taxpayer loses the Tax Court as a forum in which to litigate. The remaining litigation forums require the taxpayer to pay the disputed tax, penalties and interest and sue for refund.

A statutory filing requirement generally can be satisfied only by actual physical delivery to the government (“physical delivery requirement”). Where the Tax Court receives a petition prior to the 90th day, the physical delivery rule is satisfied.

However, if the petition is received after the deadline, the taxpayer must look to the common-law “mailbox rule” and the statutory “postmark rule” of Section 7502 to determine if it has satisfied the physical delivery requirement. The Tax Court Rules of Practice and Procedure expressly reference Section 7502, stating that “In all cases, the jurisdiction of the Court also depends on the timely filing of a petition. Read more

The Administrative Effect of The Government Shutdown On The Internal Revenue Service

TaxConnections Picture - BudgetOverview

On October 1, 2013 the United States Government was required to suspend all but its most needed operations as the result of the U.S. Congress’ failure to compromise upon appropriations that would have funded the government in fiscal year 2014. It should be duly noted that since March 26, 2013 numerous government operations have been funded under the Consolidated and Further Continuing Appropriations Act [Pub. L. No. 113-6].

As a reminder, the United States Government operates on a fiscal year that runs from October 1 – September 30, and Congress is required to appropriate funds for the approaching fiscal year by the beginning of that year (i.e., October 1, 2013). Historically speaking many legislators often fail to do so, but typically they can agree upon a Continuing Budget Resolution that provides temporary funding—typically at the previous fiscal year’s spending rates—for the short-term period(s) while negotiations for the full-year appropriations continue. However, as both Democrats and Republicans continue to debate many federal buildings across the country have remained closed since October 1st including access to national parks, monuments, and museums coupled with hundreds of thousands of non-essential federal employees being furloughed.

Administrative Effect on the Internal Revenue Service

On October 8, 2013 the Internal Revenue Service (hereinafter the “Service”) updated its online notice about the government shutdown and reminded taxpayers on extension that the October 15 deadline is still in effect. The Service emphasized that Read more

Columbus Day – Taxes, The Government Shutdown And ObamaCare

TaxConnections Picture - Columbus ShipToday is Columbus Day. Growing up it was an important holiday but now Columbus is being derided for all of his various faults. My son, who is in the 8th grade and has an extremely inspiring history teacher, came home and told me that “Mrs. M does not think we should celebrate Columbus Day.” He went on to tell me that Leif Erickson actually discovered America and that Columbus spread disease and tortured Native Americans.

What he didn’t say was that Columbus also demanded tribute from the Indians, stole their gold, enslaved some of the Indians and brought them back to Spain as objects of curiosity. He also didn’t discuss the brutality and all of the other negative things that can be brought up about Columbus. Thank heavens!

Those who pooh-pooh Columbus bring up the fact that most educated Europeans in the late 15th century knew that the world was a sphere and not flat. But the fact was, like the great inventors and explorers of humanity, Columbus took theoretical knowledge and applied it. Yes, there were some professors in the universities of the time talking about astronomy and geography, and postulating a variety of theories. Columbus took that theory and said that he was going to discover a shorter route from Europe to India to get at the spices, gold and other valuable items less expensively and safer than going around the Cape of Africa. While the intelligentsia was simply talking, Columbus was doing.

Leif Erickson, obviously a great Viking explorer, went from Northern Europe to North America more than 400 years before Columbus. He simply went home and did nothing about it. On the other hand Columbus, not only the adventurer and Read more

IRS and Effect of Government Shutdown

government-closedIRS developed a plan for the government shutdown. And as you can imagine it is not good for tax payers. The Treasury Department released its 63-page long “FY2014 Shutdown Contingency Plan (Non-Filing Season)” for IRS on September 27.

Impact on filing- Yes you are required to file on time and pay taxes as usual. Tax payers with extensions are required to file by Oct 15 to be considered timely filed return. Electric filing is supported. Paper returns will not be processed until the shutdown ends.

No in-person or live phone assistance. No live telephone customer service assistance will be available during the shutdown. However, most automated toll-free telephone applications will remain operational. IRS walk-in taxpayer assistance centers will also be closed. IRS’s website will remain available, although some of its interactive features may not be available.

Certain appointments presumed cancelled. While the government is closed, people with appointments related to examinations (audits), collection, Appeals or Taxpayer Advocate cases should assume their meetings are cancelled. IRS personnel will reschedule those meetings at a later date. Read more

FATCA Express Slows Down

Fatca FlagWhat Does the Shutdown Mean for FATCA?

The federal government shutdown has stalled the United States in its Herculean efforts to negotiate intergovernmental agreements (IGA’s) with other countries implementing FATCA. Even though FATCA was enacted in 2010, it is being implemented in stages and the implementation plan has been delayed twice. The way things are looking, further delays will be inevitable.

The most controversial portion of the law will require foreign financial institutions to report to the IRS information about Americans’ offshore accounts worth more than $50,000. That portion is scheduled to take effect in July 2014. In order to implement FATCA on a worldwide basis the United States Treasury Department has been negotiating IGAs with over fifty countries. The IGAs are critical to implementing FATCA since they would provide foreign financial institutions some leeway to report information that if revealed, might otherwise be in violation of local data protection or other laws. The IGA is designed to provide the institutions with a road map for compliance, giving them more certainty about what is required to comply with FATCA. Click here for a complete listing of joint statements and jurisdictions treated as having an IGA in effect.

 In accordance with Circular 230 Disclosure