Daily Tax Update - November 30, 2007

THE DAILY TAX UPDATE WILL BE PUBLISHED ON A PERIODIC BASIS UNTIL CONGRESS RETURNS ON DECEMBER 4^TH.

STEPTOE & JOHNSON LLP ATTORNEYS REQUEST TAX-WRITERS RECONSIDER ECONOMIC SUBSTANCE DOCTRINE CODIFICATION:  In a November 28 letter to the Chairmen and ranking members of the House Ways and Means and Senate Finance Committees, Steptoe & Johnson LLP tax attorneys Mark J. Silverman, Philip R. West, and Gregory N. Kidder requested that the codification of the economic substance doctrine be reconsidered due to concerns that codification would increase complexity without improving compliance.

• The letter states, “In February 2007 and November 2005, we submitted letters explaining our opposition to the codification of the economic substance doctrine.  In recent weeks, both the House and the Senate have again introduced economic substance codification legislation. The new codification proposals make certain modifications to the past ones, but remain significantly flawed. The current proposals would likely increase the ambiguity and complexity of the Tax Code, hinder legitimate tax planning, and potentially make enforcement more difficult. Although economic substance codification has been labeled a revenue raiser, the estimates of the revenue impact have been uncertain and changing. Given the government's recent victories in economic substance cases, it is questionable whether codification will raise any revenue at all. For these reasons and others, Assistant Treasury Secretary for Tax Policy Eric Solomon and IRS Chief Counsel Donald L. Korb have both expressed opposition to the codification proposals.”
• The letter can be accessed via:
• For additional information, contact Mark J. Silverman msilverman@steptoe.com, Philip R. West pwest@steptoe.com, or Gregory N. Kidder gkidder@steptoe.com.

INTERNAL REVENUE SERVICE - CIRCULAR 230 DISCLOSURE:
As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any plan or arrangement addressed herein.

STEPTOE & JOHNSON LLP - TAX PRACTICE
Steptoe & Johnson LLP has one of the largest and most diverse law firm tax practices in the country. The practice covers the entire spectrum of federal taxation, including representation of businesses before the Congress, Treasury and the national office of the IRS; transactional planning for domestic and multinational corporations; complex audit and controversy work for corporations and other business interests contesting IRS adjustments; litigation before the Tax Court, Court of Federal Claims, district courts, courts of appeals and the Supreme Court. The firm's tax practice also encompasses all aspects of employee benefits (ERISA), executive compensation, tax-exempt organizations and charitable giving. Steptoe has an extensive state and local tax practice, representing an array of business clients on complex sales and use tax, corporate income tax and property tax matters, both advising those clients and handling audits, administrative appeals, and litigation for them. Read more information on Steptoe's tax practice.

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