NEW BILL WOULD PREVENT DOUBLE TAXATION OF TELECOMMUTERS: Democratic Senators Christopher Dodd and Joseph Lieberman, both of Connecticut, have introduced a bill to prevent double taxation of taxpayers who work from home. The Telecommuter Tax Fairness Act of 2004 would prohibit states from imposing personal income tax on nonresidents for any period that the individual is not physically present in the state.
For purposes of determining physical presence, the bill specifies that "no state may deem a nonresident individual to be present in or working in such state on the grounds that such nonresident individual is present at or working at home for the nonresident individual's convenience."
Sen. Dodd noted that thousands of Connecticut residents are taxed twice on the income that they receive from their New York employers when they work from home.
IRS NAMES MARKS DIVISION COUNSEL AT TE/GE UNIT: The Internal Revenue Service has appointed Nancy J. Marks to the position of division counsel/associate chief counsel for tax exempt and government entities.
The appointment became effective Sept. 5.
The division counsel/associate chief counsel provides executive oversight for the 160-person legal staff in Washington and seven field offices. The office provides legal counsel and representation on diverse issues, including exempt organizations, employment taxes, executive compensation and other employee benefits, tax-exempt bonds, and federal, state, local and Indian tribal governments.
Since 1994, Marks has served as the deputy division counsel/deputy associate chief counsel. After receiving her law degree in 1981, she joined the Office of Chief Counsel in the Interpretative Division, and served in the EBEO Division as special assistant, technical assistant for legislation, and assistant branch chief for exempt organizations. She also has served as a trial attorney with the United States Department of Justice.
LUCENT AWAITING $816M TAX REFUND: Telecommunications equipment maker Lucent Technologies Inc. said that it could get an $816 million tax refund from the Internal Revenue Service, pending congressional approval.
Lucent pointed out in a filing with the Securities and Exchange Commission that U.S. tax officials have approved the refund, which settles an IRS dispute dating back to 1996, when Lucent was still part of AT&T Corp.
Last year, the company filed a claim related to the carry-back of its fiscal year 2001 federal net operating loss to 1996. Under tax-sharing agreements that it had with AT&T, Lucent said, any refund that AT&T received as a result of that carry-back would be payable to Lucent. In June, the IRS allowed $139 million of the refund claim, but disallowed the balance.
Lucent said that it reached a tentative agreement with the IRS last week that allows a net operating loss carry-back that will result in the $816 million refund, including the $139 million previously allowed. The refund is subject to the completion of the IRS's audit of Lucent's fiscal year 2001 federal income tax return. The agreement must also be reviewed and approved by the Congressional Joint Committee on Taxation.
If approved, Lucent said that the claim would be recognized as a tax benefit. If approved by the Joint Committee, Lucent noted that the refund could be received during fiscal 2005.
IRS ISSUES GUIDANCE ON PREDECEASED PARENT RULE: The Internal Revenue Service has proposed regulations regarding the predeceased parent rule of the generation-skipping transfer tax. In certain situations, the predeceased parent rule may eliminate the generation-skipping transfer tax.
"After studying the application of the rule to a variety of circumstances, we concluded that we should exercise the authority granted to us in the statute to issue these regulations," stated acting assistant secretary for tax policy Gregory F. Jenner. "We believe that the proposed regulations issued today will provide appropriate relief to more taxpayers."
The proposed regulations implement statutory changes that expanded the application of the predeceased parent rule to additional transfers and recipients.
The proposed regulations also make the rule easier to apply, provide that certain adoptions may reduce the generation-skipping transfer tax, and provide guidance regarding the application of the rule in particular situations.
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