News & Tax Alerts: Tax Alerts – Federal

President Signs Tax Increase Prevention Act

Friday, January 9, 2015  
Posted by: Ann Lupo

President Signs Tax Increase Prevention Act
The President has signed into law the Tax Increase Prevention Act of 2014 which retroactively extends for one-year expired tax provisions, makes technical corrections to existing tax laws, and enacts the ABLE Act.
The Act includes provisions that extend for one year retroactively back to January 1, 2014, the optional sales tax deduction (in lieu of state and local income taxes), the above-the-line higher education deduction, the exclusion of income from mortgage debt cancellation on a principal residence and the above-the-line classroom expense deduction, among others for individuals. Business provisions include one-year retroactive extensions for the research tax credit, 50-percent bonus depreciation, enhanced Section 179 expensing (including cost recovery for qualified leasehold improvements, retail improvements and restaurant property), the New Markets Tax Credit and the Work Opportunity Tax Credit, in addition to a one-year extension of other tax breaks.
The Act also allows multiemployer pension plans to take an additional five years to amortize funding shortfalls and extends special rules for three categories of severely underfunded multiemployer pension plans.
The Act includes the ABLE (Achieving a Better Life Experience) Bill, which creates tax-exempt accounts for use by individuals to pay qualified disability expenses. These include the costs of education and personal support.
The ABLE Bill also indexes for inflation certain civil tax penalties. It also allows certain professional employer organizations to become solely responsible for the customer’s employment taxes, excludes dividends received from a foreign subsidiary from the additional 20-percent tax on personal holding company income and makes changes to Medicare.

2014 Louisiana Tax Amnesty Program to deliver $142 million to the State
The 2014 Tax Amnesty Program has processed more than 41,000 applications and settlements, which is projected to deliver more than $142 million for the Amnesty Fund, the Louisiana Department of Revenue (LDR) has announced.
In total, the Department is projecting over $169 million in Amnesty collections, of which $142 million will go into the Amnesty Fund and, as provided under the Amnesty statute, $27 million will be retained by LDR to pay an estimated $4 million of expenses for administering this year’s Amnesty Program and provide $23 million of self-generated funds to replace penalties and fees waived.  Of the $169 million, the Department has received $136 million in payments, is awaiting receipt of $10 million relating to settlement payments mailed prior to the deadline, and projects $23 million through installment payments to be made by May 1, 2015.
Of the $169 million collected, approximately $112 million relate to resolutions of audit and litigation cases, which generally are contested matters involving businesses, and $57 million relate to delinquent tax collections which generally involve individuals and small businesses.
The 2014 Tax Amnesty Program gave eligible taxpayers the chance to bring their accounts up to date by paying all taxes due, with a waiver of all penalties and 50 percent of the interest.
Attribution and thanks are extended to Gerard H. Schreiber, Jr., CPA, who contributed content for this alert.