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May 7, 2013
This week, Congress returns to Washington D.C. for a three week work period after a one week in-state/district work period. While fiscal and tax issues are expected to take a back seat to other public policy debates, such as immigration reform, during this time, there will continue to be serious activity behind the scenes on tax reform in the month of May. The tax-writing panels on both sides of the Capitol will continue to slog through the various aspects of the tax code and examine reform proposals.
To that end, the Joint Committee on Taxation, a nonpartisan panel created to assist Congress with the development and analysis of tax-related legislation, released its summary of stakeholder submissions to the eleven Ways & Means Committee Tax Reform Working Groups that were due last month. The 558 page report is divided into four sections: an overview of present tax law, a more detailed description of present law organized by tax reform working group topic area, summaries of selected comprehensive tax reform proposals, and summaries of the stakeholder submissions to the tax reform working groups. Bipartisan Ways & Means Committee member meetings are scheduled over the course of this work period to digest the report’s findings.
On the Senate side, Finance Committee Chairman Max Baucus (D-MT) announced that he will retire at the end of the current Congress rather than face reelection in 2014. This key political development has added a sense of urgency to the tax reform effort, as both Ways & Means Committee Chairman Dave Camp (R-MI, 4th), whose chairmanship is term-limited, and Senator Baucus, who is retiring, are to step down as leaders of their committees at the end of the 113th Congress. Therefore, these two key members will push hard for reforms of the tax code now.
In other personnel news, the Senate Health, Labor, Education, and Pensions Committee is scheduled to vote on the nomination of Tom Perez to be the next Secretary of Labor on the afternoon of Wednesday, May 8. Should the Perez nomination clear the Senate HELP Committee, it could be brought up on the Senate floor for a vote at any time, although Republicans could try to mount a filibuster of the nomination and slow his confirmation process down considerably.
On May 21, 2013, ASPPA submitted additional comments on the changes made with regard to in-plan Roth rollovers under the American Taxpayer Relief Act of 2012. ASPPA recommended that additional time be provided for remedial amendments, that transfers be limited to fully vested contribution sources, and that non-spouse beneficiaries and non-spouse alternate payees should be eligible for such treatment. [Comment]
On April 29, 2013, ASPPA submitted comments to the Internal Revenue Service (“IRS”) relating to the Master & Prototype (“M&P”) and Volume Submitter (“VS”) pre-approved plan program. ASPPA recommended the IRS eliminate the procedural and substantive distinctions between the M&P and VS programs by incorporating the best current features of both programs into a single pre-approved plan program. [Comment]
On April 29, 2013, ASPPA and NTSAA submitted comments to the Internal Revenue Service (“IRS”) with suggested modifications to the recently announced 403(b) pre-approved plan program. In addition, the comment letter strongly recommended that the IRS permit cash balance plans to be included in the existing defined benefit pre-approved plan program. [Comment]