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Bush signs Secure Fence Act, renews call for comprehensive immigration reform. On October 26, 2006, President Bush signed into law the Secure Fence Act (H.R. 6061), which authorizes the building of 700 miles of fencing along the southwest border, mainly in highly populated areas. The law also authorizes the US Department of Homeland Security to strengthen control over the border using cameras, ground sensors, unmanned aerial vehicles and other technologies. While the cost of paying for the new fencing and various technologies is unclear, a recent Homeland Security appropriations bill (H.R. 5441) Bush recently signed would allocate $1.2 billion for the task. DOJ issues five year report highlighting successes in enforcing the ADA. The US Department of Justice (DOJ) has released “Access for All: Five Years of Progress,” a status report highlighting the administration's successes over the last five years in enforcing the Americans with Disabilities Act of 1990 (ADA). The report discusses the achievements of the Civil Rights Division during this administration related to enhancing opportunities and improving access for millions of Americans with disabilities throughout the nation. The report also cites specific cases illustrating access and compliance successes in areas ranging from health care to employment to emergency services. The report features the progress of Project Civic Access (PCA), a comprehensive program focused on ensuring that towns and cities across America comply with the ADA. Under President Bush’s New Freedom Initiative, PCA has significantly expanded efforts to assist communities all across America as they take steps to make their programs and services accessible. As part of PCA, department investigators, attorneys and architects survey state and local government facilities and programs across the country for the purpose of working with communities to identify modifications necessary to achieve ADA compliance. copy of the report is available at: http://www.ada.gov/5yearadarpt/fiveyearada1.htm. In addition, the report can be obtained by calling the Disability Rights Section at 800-514-0301 (voice) or 800-514-0383 (TTY). More information about the work of the Civil Rights Division can be found at http://www.ada.gov and at http://www.usdoj.gov/crt/crs/drshome.htm. President Signs FY 2007 Homeland Security appropriations. President George W. Bush signed the Fiscal Year 2007 Homeland Security Appropriations Bill (H.R. 5441) on October 4, 2006, which will provide around $33.8 billion in funding to the Department of Homeland Security (DHS) to support its mission of safeguarding the nation. According to the President, the bill appropriates funds needed to protect the United States against terrorism, secure the nation's borders, assist states and localities in dealing with natural disasters and perform other important functions of DHS. Additional highlights of the bill include the following:
DHS ordered to revise personnel rules. A federal district court judge on October 17, 2006 ordered the Department of Homeland Security (DHS) to revise its personnel rules which she said severely restrict employees collective bargaining, due process and appeal rights. In addition, the Court found that the rules violated the Homeland Security Act (HSA), which established DHS, by failing to meet the congressional mandate that the agency "ensure" collective bargaining for its employees. The judge also retained jurisdiction over the case and directed DHS to report back on the status of its plans regarding the regulations in nine months. In July 2005 the judge enjoined DHS from implementing its personnel rules and rejected a motion from DHS that she narrow her injunction. That decision was upheld and broadened by a three-judge panel of the US Court of Appeals for the District of Columbia Circuit. DHS subsequently let a late September deadline pass without pursuing an appeal to the U.S. Supreme Court. Labor Department to host first National Veterans Employment Summit. US Secretary of Labor Elaine L. Chao has invited employers and hiring executives from across the country to participate in the first-ever National Veterans Employment Summit to be held November 9, 2006 at the Scope Arena in Norfolk, Virginia. The one-day summit will team senior hiring personnel from businesses across the nation with senior government officials to examine recruitment, retention, and leadership strategies for employers to take advantage of veterans' skills in the workforce. The summit will be held from 8:30 a.m. to 2 p.m. and attendance is free. Employers and human resource personnel wishing to attend the summit can register at: http://www.hirevetsfirst.gov/summit. The Labor Department is encouraging veterans and transitioning service members to register and attend the HireVetsFirst Job Fair, which will be held in conjunction with the summit. The job fair will run from noon to 4 p.m., with registration and pre-fair resume assistance available online at: http://www.hirevetsfirst.gov/jobfair. Sixty-five companies are expected to have recruiting booths at the job fair. Both events will be held in the Norfolk Scope Arena, 201 E. Brambleton Avenue in Norfolk. Labor Department strengthens system for resolving USERRA complaints. The US Department of Labor (DOL) announced on October 4, 2006 that it has launched an enhanced data management system that consolidates federal efforts to track and resolve job-related complaints filed by National Guard members, reservists and veterans. The new system will be managed by the DOL's Veterans' Employment and Training Service (VETS), which is responsible for administering the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). This law protects the jobs and benefits of individuals who voluntarily leave their civilian jobs to undertake military service. USERRA also prohibits employers from discriminating against past and present members of the uniformed services and applicants to the uniformed services. VETS works closely on enforcement of USERRA with the DOL's Office of the Solicitor, the Department of Defense's National Committee for Employer Support of the Guard and Reserve, the Department of Justice's Civil Rights Division, and the Office of Special Counsel. The new case management system will be integrated into VETS' current USERRA Information Management System. Enhancements include providing "real time" access to USERRA case information by all agencies involved in mediation, investigation and enforcement of USERRA. The following bill introduced over the month would:
IRS issues 2007 retirement plan limits on benefits and contributions. The IRS has announced the 2007 cost-of-living adjustments (COLAs) to dollar limitations on benefits and contributions, annual compensation limits, and other dollar limitations applicable to retirement plans. Highlights of the 2007 maximum dollar limitations announced by the IRS include the following:
Annual Medicare Part D creditable coverage notice due by November 14. November 14 is the deadline for group health plan sponsors providing prescription drug benefits to Medicare Part D-eligible active employees or retirees to provide required annual certificates of creditable (or noncreditable) coverage to those individuals. The Medicare Part D program imposes a permanent increased monthly premium penalty for beneficiaries who enroll in Part D after the individual's initial enrollment period. The penalty is not imposed if the beneficiary delays enrollment in Part D until the individual's creditable coverage ends. EBSA Head Ann L. Combs Leaving Post at End of Month. Secretary of Labor Elaine L. Chao today announced that Assistant Secretary of Labor Ann L. Combs will be leaving as head of the Employee Benefits Security Administration (EBSA). After five and a half years of overseeing the agency that protects the retirement and health benefits of more than 150 million workers and their families, Combs will have the distinction of being the longest serving assistant secretary in EBSA history when she returns to the private sector Oct. 27, 2006. Combs' achievements include shepherding the landmark Pension Protection Act through to enactment in August to enhance the retirement security of workers, retirees, and their families; recovering more than $220 million for Enron's pension plan victims; and building a strong enforcement record, including a record $8.7 billion in monetary results and 536 criminal indictments.
IRS issues guidance on domestic production wage limitation. The Internal Revenue Service (IRS) has issued procedures for calculating the Form W-2 wages for purposes of IRSCode Sec. 199(b)(1) domestic production deduction, which is limited to 50% of the W-2 wages of the taxpayer for the tax year. The Tax Increase Prevention and Reconciliation Act of 2005 (P.L. 109-222) (TIPRA) imposed a new limitation on W-2 wages for purposes of Code Sec. 199 for tax years beginning after May 17, 2006. Under the change made by TIPRA, W-2 wages include only amounts that are properly allocable to domestic production gross receipts (DPGR). To determine W-2 wages for tax years beginning after May 17, 2006, it is necessary to determine (1) W-2 wages before the amendment by TIPRA, and (2) the portion of that amount properly allocable to DPGR. Methods for calculating "wages" as described in Reg. §1.199-2(e)(1) are provided by this revenue procedure. Under Temporary Reg. §1.199-2T(e)(2) the term "W-2 wages" includes only paragraph Temporary Reg. §1.199-2T(e)(1) wages that are properly allocable to DPGR. Therefore, for tax years covered by this revenue procedure, a taxpayer first determines the amount of and then applies Temporary Reg. §1.199-2T(e)(1). The IRS was given authority through Reg. §1.199-2(e)(3) to issue guidance providing the methods that may be used to calculate W-2 wages and Reg. Reg. §1.199-2(e)(3) is effective for tax years beginning on or after June 1, 2006. In Rev. Proc. 2006-22, the IRS provided methods for calculating W-2 wages for taxpayers who choose to apply the final regulations to tax years beginning before June 1, 2006, but only for tax years beginning on or after January 1, 2005, and on or before May 17, 2006. This revenue procedure applies to taxpayers with tax years beginning on or after October 19, 2006. A taxpayer may apply this revenue procedure to tax years beginning after May 17, 2006, and before October 19, 2006. For tax years beginning after May 17, 2006, a taxpayer may not apply any guidance under Code Sec. 199in a manner inconsistent with amendments made to Code Sec. 199 by TIPRA. (IRS Rev. Proc 2006-47, IRB 2006-45.) IRS requests comments on the Form 941 series. The IRS is requesting comments concerning Forms 941 (Employer's Quarterly Federal Tax Return), 941-PR (Planilla Para La Declaracion Trimestral Del Patrono-LaContribucion Federal Al Seguro Social Y Al Seguro Medicare), 941-SS (Employer's Quarterly Federal Tax Return-American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands), Schedule B (Form 941) (Employer's Record of Federal Tax Liability), and Schedule B (Form 941-PR)(Registro Suplementario De La Obligacion Contributiva Federal Del Patrono). Form 941 is used by employers to report payments made to employees subject to income and social security/Medicare taxes and the amounts of these taxes. Form 941-PR is used by employers in Puerto Rico to report social security and Medicare taxes only. Form 941-SS is used by employers in the U.S. possessions to report social security and Medicare taxes only. Schedule B is used by employers to record their employment tax liability. Written comments should be directed to Glenn Kirkland, Internal Revenue Service, room 6512, 1111 Constitution Avenue NW., Washington, DC 20224, and should be received on or before December 1, 2006 to be assured of consideration. (IRS Notice and Request for Comments, October 2, 2006.) IRS updates specifications for filing Form 1042-S. The IRS has updated the specifications for filing Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding, electronically using the FIRE (Filing Information Returns Electronically) system, or magnetically using compatible tape cartridges. The procedure must be used to prepare current- and prior-year information returns filed beginning January 1, 2007, and received by IRS/ECC-MTB or postmarked by December 31, 2007. Paper Forms 1042-S and 1042-T for tax year 2006 should be sent to the Ogden Service Center, P.O. Box 409101, Ogden, Utah 84409. For all files submitted on the FIRE system beginning on January 1, 2007, ECC-MTB will no longer mail error reports to the filers informing them that the files received were bad. It will be the responsibility of the filer to check the status of the file within five business days of filing to verify the effectiveness of the transmission. Information available on the FIRE system will include the number of errors, their description and the first occurrence. If further information is needed to understand the errors listed by the FIRE system, filers may call 1-866-455-7438. Particular attention should be given to the procedure for filing amended Forms 1042-S, which has completely changed from previous years. Files containing information returns and requests for IRS magnetic media and electronic filing information should be sent to IRS Enterprise Computing Center--Martinsburg, Attn: 1042-S Reporting, 230 Murall Drive, Kearneysville, W.Va. 25430. Electronic filing via the FIRE system is available at: http://fire.irs.gov. Requests for extensions and for undue hardship waivers filed on Form 8508 should be sent to: IRS Enterprise Computing Center--Martinsburg, Information Reporting Program, Attn: Extension of Time Coordinator, 240 Murall Drive, Kearneysville, W.Va. 25430. The telephone number for magnetic media inquiries or electronic submissions is 1-866-455-7438 inside the U.S. and 304-263-8700 outside the U.S., and the e-mail address is mccirp@irs.gov. Rev. Proc. 2004-63, 2004-2 CB 795, is superseded. (Rev. Proc. 2006-34, I.R.B. 2006-38, 460, September 18, 2006.)
PBGC Increases Single-Employer Flat Rate Premium to $31 for 2007. The Deficit Reduction Act of 2005 increased the PBGC's per participant flat premium rates for the 2006 plan year to $30.00 for the Single-Employer Program and $8.00 for the Multiemployer Program. The Act provided for these flat premium rates to be adjusted each year for inflation, based on changes in the national average wage index, as defined in the Social Security Act. The 2007 flat premium rates for the Pension Benefit Guaranty Corporation’s (PBGC) two insurance programs will be $31.00 per participant for the Single-Employer Program and $8.00 per participant for the Multiemployer Program. When the PBGC announces the new rates in a Federal Register Notice, the Notice will be accessible through the "What's New" page on the PBGC's website at: http://www.pbgc.gov/practitioners/Whats-New/whatsnew/page15560.html. Senators Grassley and Baucus Seek GAO Review of PBGC Structure. Senator Chuck Grassley, chairman of the Committee on Finance, and Senator Max Baucus, ranking member, have asked the Government Accountability Office to review whether the Pension Benefit Guaranty Corporation has adequate resources and is properly structured to handle the largest demands on services in its history. The senators asked for preliminary findings before the Senate confirms an agency executive director for the first time next year. Both the Finance Committee and the Health, Education, Labor and Pensions Committee are required to consider the nomination of future executive directors and recommend nominees for full Senate consideration. PBGC explains impact of PPA changes on reporting and disclosure requirements. The PBGC has issued guidance in the form of a Technical Update explaining the impact of Pension Protection Act of 2006 (PPA, P.L. 109-280) changes affecting the variable rate premium on reporting and disclosure requirements. The PPA reinstated retroactively to January 2006 the assumptions affecting the variable rate premium interest rate (VRP). The PBGC recently issued guidance revising the 2006 VRP interest rates that were published prior to enactment of the PPA to reinstate the rate calculations that were effective under the Pension Funding Equity Act of 2004 (PFEA, P.L. 108-218) for 2004 and 2005. In particular, this guidance explains the impact of the PPA on employer annual reporting for controlled groups, and certain post-event reporting, advance reporting, and Participant Notice requirements.
Social Security Adminstration announces 3.3% benefit increase for 2007; wage base increases to $97,500. Social Security beneficiaries in 2007 will see a relatively large increase in their monthly checks. As a result of inflation, an increase of 3.3 percent will be applied to this coming year’s benefits, starting with December 2006 benefits, which are paid in January 2007. Though not as large as last year’s 4.1 percent increase, this is still the third largest annual increase since 1991. The 3.3 percent cost-of-living adjustment, or COLA, will produce an estimated monthly benefit of $1,044 for all retired workers in 2007, $42 a month more than in 2006. However, $5.00, or 11.9 percent, of that increase will be eaten up by a rise in the standard premium paid by beneficiaries enrolled in Medicare Part B in 2007. With a total monthly Medicare Part B standard premium of $93.50 in 2007, Social Security beneficiaries enrolled in Medicare Part B will see that average $42 benefit increase reduced to $36 after rounding required by law. For the first time, a relatively small number of Medicare Part B enrollees with higher incomes, approximately 4 percent, will pay a higher premium based on their income. A typical married couple, both receiving benefits, can expect to find $1,713 in their monthly benefit checks in 2007, $65 more than the comparable 2006 benefit, while the average widow or widower living alone will receive an average benefit of $1,008, an increase of $41. These amounts do not reflect deductions for Medicare premiums. The maximum monthly benefit payable to an individual reaching full retirement age, which is age 65 and 10 months for those born in 1942, will be $2,116. This is $63 more per month than what was payable to someone retiring at full retirement age in January 2006 and $118 per month more than the maximum benefit of $1,998 payable to someone born in 1942 who still wishes to retire upon reaching age 65 in 2007. The Social Security COLA is applied to several types of benefits: retirement, disability, survivors – such as children and widow(er)s – and to the maximum family benefit, which is the maximum that can be paid if more than one family member is receiving benefits based on one wage earner’s account. SSA issues official correction to regulation amended on March 31. Corrected amendment. The Social Security Administration has published an official correction to the amendment of Reg. §404.1526 in the final regulations published in the March 31, 2006, Federal Register. As originally published, instruction 12 of the amendments states that the first sentence of paragraph (c) should be revised. However, the instruction failed to take into account a prior revision, on March 1, 2006, that had renamed paragraph (c) as (d) and added a new paragraph (c). This was brought to the attention of the Social Security Administration by CCH. The official correction reflects the original intention to amend paragraph (d) and not (c). As published by CCH in Report 615 (September 18, 2006), Reg. §404.1526 reflects the amendment, as intended and, as now officially stated in the official correction in 71 Federal Register 57415, September 29, 2006. SSA to require SSNs of attorneys for direct fee payment. Beginning in 2007, the Social Security Administration (SSA) will require of both attorneys and non-attorneys who represent claimants before the SSA submission of the representative's Social Security Number (SSN) as a condition for SSA to directly pay a fee or a portion of the fee to the representative from a claimant's past-due benefits. Direct payment of fees out of a portion of a successful claimant's past due benefits is provided for under Section 206 of the Social Security Act. IRS regulations now require anyone engaged in a trade or business who pays in one year aggregated fees of $600 or more to a professional to file an information return with the IRS. The requirement is set forth in Internal Revenue Code §6041(a) and is implemented by 26 CFR 1.6041-1. To meet this requirement, anyone who is appointed by a claimant to represent him or her before the SSA after December 31, 2006, who is otherwise eligible for direct fee payment, and an attorney for whom a Federal court has approved a fee after December 31, 2006, will be required to provide the SSA with his or her social Security Number as a prerequisite for direct fee payment.
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