[Senate Report 114-30]
[From the U.S. Government Publishing Office]


                                                        Calendar No. 53
114th Congress     }                                      {      Report
                                 SENATE
 1st Session       }                                      {      114-30

======================================================================



 
               MILITARY SPOUSE JOB CONTINUITY ACT OF 2015

                                _______
                                

                 April 14, 2015.--Ordered to be printed

                                _______
                                

               Mr. Hatch, from the Committee on Finance, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 920]

    The Committee on Finance, having considered an original 
bill, S. 920, to amend the Internal Revenue Code of 1986 to 
allow a credit against income tax for amounts paid by a spouse 
of a member of the Armed Forces for a new State license or 
certification required by reason of a permanent change in the 
duty station of such member to another State, having considered 
the same, reports favorably thereon without amendment and 
recommends that the bill do pass.

                                CONTENTS

                                                                   Page
 I. LEGISLATIVE BACKGROUND............................................1
II. EXPLANATION OF THE BILL...........................................2
        A. Credit for State Licensure and Certification Costs of 
            Military Spouses Arising by Reason of a Permanent 
            Change in the Duty Station of the Member of the Armed 
            Forces to Another State (sec. 2 of the bill and sec. 
            25(e) of the Code)...................................     2
        B. Increase Continuous Levy Authority on Payments to 
            Medicare Providers and Suppliers (sec. 3 of the bill 
            and sec. 6331 of the Code)...........................     3
III.BUDGET EFFECTS OF THE BILL........................................5

IV. VOTES OF THE COMMITTEE............................................7
 V. REGULATORY IMPACT AND OTHER MATTERS...............................7
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED.............8

                       I. LEGISLATIVE BACKGROUND

    The Committee on Finance, having considered S. 920, the 
``Military Spouse Job Continuity Act of 2015,'' to amend the 
Internal Revenue Code of 1986 to allow a credit against income 
tax for amounts paid by a spouse of a member of the Armed 
Forces for a new State license or certification required by 
reason of a permanent change in the duty station of such member 
to another State, reports favorably thereon without amendment 
and recommends that the bill do pass.

Background and need for legislative action

    Background.--Based on a proposal recommended by Senators 
Casey and Roberts, the Committee on Finance marked up original 
legislation (the Military Spouse Job Continuity Act of 2015) on 
February 11, 2015, and, with a majority present, ordered the 
bill favorably reported.
    Need for legislative action.--Spouses of members of the 
Armed Forces often relocate to a different State when their 
husband or wife receives a change of station order. This 
relocation can be particularly disruptive and costly where the 
service member's spouse has a profession that requires a State 
license or certification. Supporting military spouses and 
families helps the morale and combat readiness of the Armed 
Forces. Tax incentives may therefore be necessary to defray the 
State relicensing and recertification costs borne by military 
spouses, where such costs result from a service member's 
permanent changes of station order.
    In addition, it has been reported that many thousands of 
Medicare providers and suppliers have outstanding Federal 
employment and income tax liability, which contribute to the 
tax gap. The permissible percentage of payments to a Medicare 
provider subject to levy should be increased.

                      II. EXPLANATION OF THE BILL


   A. Credit for State Licensure and Certification Costs of Military 
Spouses Arising by Reason of a Permanent Change in the Duty Station of 
the Member of the Armed Forces to Another State (sec. 2 of the bill and 
                        sec. 25(e) of the Code)


                              PRESENT LAW

    Under the Code, currently, there are no credits or special 
benefits for costs incurred by military spouses for 
transferring professional licenses or certifications arising by 
reason of a permanent change of duty station of a military 
service member.\1\
---------------------------------------------------------------------------
    \1\Sec. 7508. Unless otherwise stated, all section references are 
to the Internal Revenue Code of 1986, as amended (the ``Code'').
---------------------------------------------------------------------------

                           REASONS FOR CHANGE

    A spouse of a member of the Armed Forces often relocates to 
a different State when the military spouse receives a change of 
station order. This relocation can be particularly disruptive 
and costly where the service member's spouse has a profession 
that requires a State license or certification. The Committee 
believes that supporting military spouses and families helps 
the morale and combat readiness of the Armed Forces. The 
Committee therefore believes that it is appropriate to offer a 
tax credit to help defray the State relicensing and 
recertification costs borne by military spouses, where such 
costs result from a service member's permanent changes of 
station order.

                        EXPLANATION OF PROVISION

    The provision allows a credit to military spouses of up to 
$500 for each change of duty station for qualified relicensing 
costs. Eligible individuals are those who are married to and 
move with a member of the Armed Forces of the United States at 
the time the member moves to another State under a permanent 
change of station order. Qualified relicensing costs are costs 
required by the new State for a license or certification to 
engage in the same profession as in the previous State. Costs 
must be paid or incurred beginning after the change order has 
been issued and within one year from the reporting date.

                             EFFECTIVE DATE

    The provision applies to taxable years beginning after 
December 31, 2014.

B. Increase Continuous Levy Authority on Payments to Medicare Providers 
      and Suppliers (sec. 3 of the bill and sec. 6331 of the Code)


                              PRESENT LAW

In general

    Levy is the administrative authority of the IRS to seize a 
taxpayer's property, or rights to property, to pay the 
taxpayer's tax liability.\2\ Generally, the IRS is entitled to 
seize a taxpayer's property by levy if a Federal tax lien has 
attached to such property,\3\ the property is not exempt from 
levy,\4\ and the IRS has provided both notice of intention to 
levy\5\ and notice of the right to an administrative hearing 
(the notice is referred to as a ``collections due process 
notice'' or ``CDP notice'' and the hearing is referred to as 
the ``CDP hearing'')\6\ at least 30 days before the levy is 
made. A levy on salary or wages generally is continuously in 
effect until released.\7\ A Federal tax lien arises 
automatically when: (1) a tax assessment has been made; (2) the 
taxpayer has been given notice of the assessment stating the 
amount and demanding payment; and (3) the taxpayer has failed 
to pay the amount assessed within 10 days after the notice and 
demand.\8\
---------------------------------------------------------------------------
    \2\Sec. 6331(a). Levy specifically refers to the legal process by 
which the IRS orders a third party to turn over property in its 
possession that belongs to the delinquent taxpayer named in a notice of 
levy.
    \3\Ibid.
    \4\Sec. 6334.
    \5\Sec. 6331(d).
    \6\Sec. 6330. The notice and the hearing are referred to 
collectively as the CDP requirements.
    \7\Secs. 6331(e) and 6343.
    \8\Sec. 6321.
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    The notice of intent to levy is not required if the 
Secretary finds that collection would be jeopardized by delay. 
The standard for determining whether jeopardy exists is similar 
to the standard applicable when determining whether assessment 
of tax without following the normal deficiency procedures is 
permitted.\9\
---------------------------------------------------------------------------
    \9\Secs. 6331(d)(3) and 6861.
---------------------------------------------------------------------------
    The CDP notice (and pre-levy CDP hearing) is not required 
if: (1) the Secretary finds that collection would be 
jeopardized by delay; (2) the Secretary has served a levy on a 
State to collect a Federal tax liability from a State tax 
refund; (3) the taxpayer subject to the levy requested a CDP 
hearing with respect to unpaid employment taxes arising in the 
two-year period before the beginning of the taxable period with 
respect to which the employment tax levy is served; or (4) the 
Secretary has served a Federal contractor levy. In each of 
these four cases, however, the taxpayer is provided an 
opportunity for a hearing within a reasonable period of time 
after the levy.\10\
---------------------------------------------------------------------------
    \10\Sec. 6330(f).
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Federal payment levy program

    To help the IRS collect taxes more effectively, the 
Taxpayer Relief Act of 1997\11\ authorized the establishment of 
the Federal Payment Levy Program (``FPLP''), which allows the 
IRS to continuously levy up to 15 percent of certain 
``specified payments'' by the Federal government if the payees 
are delinquent on their tax obligations. With respect to 
payments to vendors of goods, services, or property sold or 
leased to the Federal government, the continuous levy may be up 
to 100 percent of each payment.\12\ For payments to Medicare 
providers and suppliers, the levy is up to 15 percent for 
payments made within 180 days after December 19, 2014. For 
payments made after that date, the levy is up to 30 
percent.\13\
---------------------------------------------------------------------------
    \11\Pub. L. No. 105-34.
    \12\Sec. 6331(h)(3).
    \13\Pub. L. No. 113-295, Division B.
---------------------------------------------------------------------------
    Under FPLP, the IRS matches its accounts receivable records 
with Federal payment records maintained by the Department of 
the Treasury's Bureau of Fiscal Service (``BFS''), such as 
certain Social Security benefit and Federal wage records. When 
these records match, the delinquent taxpayer is provided both 
the notice of intention to levy and the CDP notice. If the 
taxpayer does not respond after 30 days, the IRS can instruct 
the BFS to levy the taxpayer's Federal payments. Subsequent 
payments are continuously levied until such time that the tax 
debt is paid or the IRS releases the levy.

                           REASONS FOR CHANGE

    It has also been reported that many thousands of Medicare 
providers and suppliers have outstanding Federal employment and 
income tax liability, which contribute to the tax gap. 
Consequently, the Committee believes that it is appropriate to 
increase the permissible percentage of payments to a Medicare 
provider subject to levy.

                        EXPLANATION OF PROVISION

    The provision provides that the present limitation of 30 
percent of certain specified payments be increased by an amount 
sufficient to offset the estimated revenue loss of the 
provision described in Part A, above.

                             EFFECTIVE DATE

    The provision is effective for payments made after 180 days 
after the date of enactment.

                    III. BUDGET EFFECTS OF THE BILL


                         A. Committee Estimates

    In compliance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 308(a)(1) of the 
Congressional Budget and Impoundment Control Act of 1974, as 
amended (the ``Budget Act''), the following statement is made 
concerning the estimated budget effects of the revenue 
provisions of the ``Military Spouse Job Continuity Act of 
2015'' as reported.
    The provisions of the bill are estimated to alter Federal 
fiscal year budget receipts by the following amounts for the 
period 2015-2025.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                B. Budget Authority and Tax Expenditures


Budget authority

    In compliance with section 308(a)(1) of the Budget Act, the 
Committee states that no provisions of the bill as reported 
involve new or increased budget authority.

Tax expenditures

    In compliance with section 308(a)(1) of the Budget Act, the 
Committee states that certain provisions affect the levels of 
tax expenditures (see revenue table in part A., above).

            C. Consultation with Congressional Budget Office

    In accordance with section 402 of the Budget Act, the 
Committee advises that the Congressional Budget Office has not 
submitted a statement on the bill. The letter from the 
Congressional Budget Office will be provided separately.

                       IV. VOTES OF THE COMMITTEE

    In compliance with paragraph 7(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee states that, with a 
majority present, the ``Military Spouse Job Continuity Act of 
2015,'' was ordered favorably reported by voice vote on 
February 11, 2015.

                 V. REGULATORY IMPACT AND OTHER MATTERS


                          A. Regulatory Impact

    Pursuant to paragraph 11(b) of rule XXVI of the Standing 
Rules of the Senate, the Committee makes the following 
statement concerning the regulatory impact that might be 
incurred in carrying out the provisions of the bill as amended.

Impact on individuals and businesses, personal privacy and paperwork

    The bill allows a credit against income tax for amounts 
paid by a spouse of a member of the Armed Forces for a new 
State license or certification required by reason of a 
permanent change in the duty station of such member to another 
State. It also increases the IRS's continuous levy authority on 
payments to Medicare providers and suppliers. The provisions of 
the bill are not expected to impose significant additional 
administrative requirements or regulatory burdens on 
individuals or businesses.
    The provisions of the bill do not impact personal privacy.

                     B. Unfunded Mandates Statement

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
    The Committee has determined that the tax provisions of the 
reported bill do not contain Federal private sector mandates or 
Federal intergovernmental mandates on State, local, or tribal 
governments within the meaning of Public Law 104-4, the 
Unfunded Mandates Reform Act of 1995.

                       C. Tax Complexity Analysis

    Section 4022(b) of the Internal Revenue Service Reform and 
Restructuring Act of 1998 (``IRS Reform Act'') requires the 
staff of the Joint Committee on Taxation (in consultation with 
the Internal Revenue Service and the Treasury Department) to 
provide a tax complexity analysis. The complexity analysis is 
required for all legislation reported by the Senate Committee 
on Finance, the House Committee on Ways and Means, or any 
committee of conference if the legislation includes a provision 
that directly or indirectly amends the Internal Revenue Code 
and has widespread applicability to individuals or small 
businesses. The staff of the Joint Committee on Taxation has 
determined that there are no provisions that are of widespread 
applicability to individuals or small businesses.

       VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    In the opinion of the Committee, it is necessary in order 
to expedite the business of the Senate, to dispense with the 
requirements of paragraph 12 of rule XXVI of the Standing Rules 
of the Senate (relating to the showing of changes in existing 
law made by the bill as reported by the Committee).

                                  [all]