Welcome to the IMA Tax Policy Blog. The blog format reflects our efforts to provide IMA members with timely, relevant and thought provoking information in a form that is accessible for easy reference. IMA’s Tax Policy Blog will be updated on a regular basis. Weekly news update emails will be sent out to notify subscribers of new information posted on the blog. IMA members are welcome to submit material for the blog, or request specific information. Simply email Editor Stefany Henson at shenson@ima-net.org with your information or request. Editorial submissions are subject to review. 

Thursday
Mar122015

Obama’s Proposed Capital Gains Tax Hike

by Pamela Villarreal

Taxing the nonwage income of the wealthy is politically popular because it is assumed few people will be affected. President Obama’s 2016 budget proposes an increase in the capital gains tax to 28 percent for couples earning $500,000 or more.

This is estimated to increase revenue about $208 billion over 10 years. In his State of the Union address, Obama noted the Reagan administration established the same rate, as if to minimize the effects of the proposal. But the comparison is not apt; President Reagan lowered marginal tax rates during his tenure, and there was no Medicare tax on unearned income, as there is now. What would be the effect if the capital gains tax increased from its current 20 percent to 28 percent?

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Thursday
Mar052015

IRS Makes it Easier for Small Businesses to Apply Repair Regulations to 2014 and Future Years

The Internal Revenue Service has made it easier for small business owners to comply with the final tangible property regulations. Requested by many small businesses and tax professionals, the simplified procedure is available beginning with the 2014 return taxpayers are filling out this tax season. The new procedure allows small businesses to change a method of accounting under the final tangible property regulations on a prospective basis for the first taxable year beginning on or after Jan. 1, 2014.

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Thursday
Mar052015

Work Opportunity Tax Credit (WOTC) Extension for 2014

I. PURPOSE This notice provides guidance on § 119 of the Tax Increase Prevention Act of 2014 (the Act), Pub. L. No. 113-295, enacted on December 19, 2014, and transition relief for employers claiming the Work Opportunity Tax Credit (WOTC) under §§ 51 and 3111(e) of the Internal Revenue Code, as extended by the Act. Section 119 of the Act amends § 51 to extend the WOTC, including the reduced credit under § 3111(e) for qualified tax-exempt organizations, through December 31, 2014. Specifically, this notice provides employers that hire members of targeted groups additional time beyond the 28-day deadline in § 51(d)(13) for submitting Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit, to Designated Local Agencies (DLAs).

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Wednesday
Feb252015

Be better prepared for IRS challenges to your international tax positions

From IMA member McGladrey …

The IRS is ramping up attention on international activities, so international companies should understand how best to handle potential IRS challenges. McGladrey’s webcast Best practices for managing international tax controversies explores four key international tax concerns and will leave you better positioned to address an IRS challenge. Topics covered include:

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Wednesday
Feb252015

A Cut in the Corporate Tax Rate Would Provide a Significant Boost to the Economy

By Andrew Lundeen, the Tax Foundation

A cut in the corporate tax rate would have large effects on GDP, but minimal effects on total federal revenue in the long run. The large boost to the size of the economy from a corporate tax cut comes from a lower cost of capital.

The corporate tax rate is, in effect, a tax on corporate investment; a high corporate tax rate discourages investment, whereas a low corporate tax rate encourages investment. Additionally, the competitive nature of the global economy corporate taxes makes for strong responses to tax changes as corporate investment moves to countries with more competitive tax systems. The increase in investment from a corporate tax rate cut would lead to higher wages, more jobs, and a larger economy.

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