Tax

Congress passed a short-term funding measure Thursday to keep the federal government operating and avoid a shutdown next week.

More than 50 state and local groups representing housing, transportation and the infrastructure industry sent a letter to Senate leaders Wednesday urging them to maintain the status of tax-exempt bonds.

Puerto Rico Gov. Alejandro García Padilla plans to propose tax increases as part of the fiscal 2013-2014 budget.

As the Senate considers debate on the fiscal year 2014 budget later this week, several Senators would like to include an amendment for an online sales tax bill into the budget.

While they differed in opinions about the economic benefits of municipal bonds, House Ways and Means Committee members on both sides of the aisle and experts agreed that the rules for qualified private-activity bonds should be reexamined.

The National Association of State Treasurers said it is committed to defending existing tax policy on municipal bonds, even though doubts about the status of private activity bonds showed during the group's legislative conference.

The threats to tax exemption are the most serious they have ever been since the Roosevelt Administration but the market can successfully defend it from lawmakers who are looking for more revenue, said a former Democratic congressional tax counsel at the NABL conference.

The Internal Revenue Service's tax-exempt bond office has issued a report that examines the potential problems that can occur during the three main phases of a bond transaction and suggests how issuers can avoid them. But some lawyers attending the National Association of Bond Lawyers' 13th annual Tax and Securities Law Institute questioned whether the IRS should be writing a report that is oriented toward providing best practices rather than the tax law.

The Internal Revenue Service's tax-exempt bond office published its fiscal year 2013 work plan, saying it will continue to focus on identifying and responding to abusive transactions.

Reps. Richard Neal, D-Mass. and Lee Terry, R-Neb., both former public officials, have introduced a resolution on the importance of municipal bonds to state and local governments that they hope will garner a lot of attention and support among House members.

Leaders of the Senate Finance Committee detailed plans for developing tax reform proposals on Thursday. In a bipartisan meeting of committee members, panel chairman Sen. Max Baucus, D-Mont., and the top Republican Orrin Hatch from Utah, said the committee will meet weekly to discuss and develop a series of papers on specific tax reform topics.

The Senate Budget Committee Democrats' budget resolution for fiscal year 2014 suggests the possibility of percentage or dollar caps on tax preferences such as tax-exempt muni bond interest, pushes traditional tax-credit bonds for transportation, and proposes a $10 billion infrastructure bank to provide loans and loan guarantees for projects.

Senate Budget Committee chairman Patty Murray, D-Wash., on Wednesday unveiled a fiscal 2014 budget that would reduce the deficit $975 billion by "closing loopholes and eliminating wasteful spending in the federal tax code that benefits the wealthiest Americans and biggest corporations."

House Republicans unveiled their fiscal 2014 budget Tuesday that would overhaul the tax code without raising new revenue, slash federally-funded high-speed rail, repeal President Obama's healthcare law, and cut domestic programs.

A dozen Senate Democrats and an Independent lawmaker have re-introduced a bill that would impose a minimum 30% tax on high income tax payers who earn more than $1 million as a way to help reduce the ballooning federal deficit.

Twenty-two House Republicans urged House Budget Committee chairman Rep. Paul Ryan to call for the top tax rate to be 25% and repeal of the alternative minimum tax, among other things, in his FY-2014 budget resolution.

The IRS' TEB office released a new check list form that will be required for a voluntary closing agreement program submission request.

Barclays is warning that if a Build America Bond subsidy payment is reduced under sequestration and this triggers an extraordinary redemption provision, the issuer may be able to call those BABs anytime, even years later when market changes make the call affordable.

Massachusetts Democrat Rep. Richard Neal has introduced a bill that would permanently extend Build America Bonds with a subsidy rate that drops on a phased-in basis and a provision that ensures sequestration would not result in reduced Treasury subsidy payments to issuers.

Tulsa Mayor Dewey Bartlett wants to extend a sales tax to finance police and fire recruiting and training efforts.