Today's Top Tax Article

The House votes 403-12 to pass legislation (H.R. 3548) that would extend and expand home buyer tax credits and net operating loss carryback rules into 2010, sending it to President Obama, who is expected to sign it today. The Worker, Homeownership, and Business Act, an unemployment insurance measure, would continue the $8,000 first-time home buyer tax credit through April 30, 2010, and create a new $6,500 tax credit for existing homeowners who want to purchase a different home as their primary residence. It would expand the NOL carryback provision to allow any business with a loss in either 2008 or 2009 to claim refunds of taxes paid within the prior five years. Among the revenue-raisers in the bill is a six-year delay of the implementation of a tax break on worldwide interest allocation slated for use by multinational firms—raising $20.1 billion.

This article was originally printed in today's BNA Daily Tax Report.

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Featured Analysis

The Internal Revenue Service (IRS) recently won a long fought victory over the student medical resident exception from employment taxes under the Federal Insurance Contribution Act (FICA). In response to a number of federal court decisions holding that the services of a medical resident fell within the student exception from FICA taxes, the IRS adopted revised regulations which provide that “[t]he services of a full-time employee are not incident to and for the purpose of pursuing a course of study.” The Eighth Circuit reversed two district court decisions that found the revised regulations to be an invalid exercise of IRS regulatory authority. According to the court in Mayo Foundation for Medical Education and Research v. U.S., No. 073242 (8th Cir. 6/12/09), IRS regulations limiting the student FICA exception to students who are not full-time employees is a permissible interpretation of the statute.

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