Daily Tax Update - March 3, 2008

IRS SEEKS NEW ISSUES FOR INDUSTRY ISSUE RESOLUTION PROGRAM:  Today, the IRS encouraged business taxpayers, associations and other interested parties to submit to the Industry Issue Resolution (IIR) Program tax issues for resolution involving a controversy, a dispute or an unnecessary burden on taxpayers.

• Though submissions can be made at anytime for consideration in the IIR program, submitted issues received by March 31, 2008, will be considered for acceptance in April.
• According to the IRS, “The objective of the IIR program is to resolve business tax issues common to significant numbers of taxpayers through new and improved guidance. In past years, issues have been submitted by associations and others representing both small and large business taxpayers, resulting in tax guidance that has affected thousands of taxpayers.”
• Additional information can be accessed via: http://www.irs.gov/pub/irs-drop/rp-03-36.pdf

INTEREST RATES DROP FOR THE SECOND QUARTER OF 2008:  Today, the IRS announced that interest rates for the calendar quarter beginning April 1, 2008, will drop by one percentage point.

• The new rates will be:
  • six (6) percent for overpayments [five (5) percent in the case of a corporation];
  • six (6) percent for underpayments;
  • eight (8) percent for large corporate underpayments; and
  • three and one-half (3.5) percent for the portion of a corporate overpayment exceeding $10,000.
• Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points. Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points.
• According to the IRS, “The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.”
• Additional information can be accessed via: http://www.irs.gov/pub/irs-drop/rr-08-10.pdf

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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