Daily Tax Update - September 25, 2008

DODD: “FUNDAMENTAL AGREEMENT” REACHED ON BAILOUT BILL:  Lawmakers are scheduled to meet with President Bush later this afternoon to discuss the details of the $700 billion financial rescue plan. Senate Banking Committee Chairman Chris Dodd said that the proposal will help homeowners, curb executive pay packages at participating firms, and provide oversight of Treasury's actions. It appears that Congress will work into the weekend to pass the plan.  

• Dodd said, “We've reached a fundamental agreement on a set of principles, one, for taxpayers, which is tremendously important. We're very confident we can act expeditiously.”
• Sen. Bob Bennett (R-UT) said, “I now expect that we will indeed have a plan that can pass the House, pass the Senate (and) be signed by the president.”
• A White House spokesman said, “We'll want to hear from Secretary Paulson, and take a look at the details. We look forward to a good discussion at the meeting this afternoon.”

HOUSE PASSES AMT PATCH BILL WITHOUT OFFSETS, EXTENDERS BILL VOTE LATER TODAY: Yesterday, by a vote of 393-30, the House passed a one-year alternative minimum tax patch bill. The bill now goes back to the Senate. The House is expected to consider its version of an extenders bill later today.  

HOUSE EXPECTED TO CONSIDER STIMULUS BILL FRIDAY:  House Speaker Pelosi said that an economic stimulus package in the range of $50 billion should be on the House floor tomorrow. However, Pelosi added that the package “may need a little more” than that amount. Pelosi said that the bill would have “a strong emphasis” on infrastructure spending and will probably include unemployment insurance, state Medicaid assistance, and food stamps. 

HOUSE APPROVES CONTINUING RESOLUTION:  Last night, the House approved a $600 billion continuing resolution bill that would fund the federal government through March 6. The continuing resolution is expected to be considered in the Senate this weekend. 

• House Majority Leader Steny Hoyer said yesterday, “We are debating a CR today because we did not complete the appropriations process. Very frankly, we were confronted with an administration who wanted to limit funding far below what was possible in order to meet the responsibilities that we have to this nation and to our people.”

MISCELLANEOUS GUIDANCE RELEASED TODAY:

The IRS Will Address Technical Terminations of Certain Publicly Traded Partnerships: The IRS announced today that it plans to issue guidance regarding technical terminations of a publicly traded partnership (PTP) resulting in multiple short tax years within one calendar year.

• Additional information can be accessed via:  http://www.irs.gov/newsroom/article/0,,id=187131,00.html  

Examination of returns and claims for refund, credit, or abatement; determination of correct tax liability: Revenue Procedure 2008-59 updates the rules for determining the amount of an employee's ordinary and necessary business expenses for lodging, meals, and incidental expenses incurred while traveling away from home that are deemed substantiated under § 1.274-5 of the Income Tax Regulations.

TAX BILLS INTRODUCED SEPTEMBER 24th:
H.R.7035: To amend the Internal Revenue Code of 1986 to increase the exclusion for employer-provided dependent care assistance.
Sponsor: Rep Shea-Porter, Carol [NH-1] (introduced 9/24/2008)      Cosponsors (4)

H.R.7036: To amend the Internal Revenue Code of 1986 to modify the dependent care credit to take into account expenses for care of parents and grandparents who do not live with the taxpayer.
Sponsor: Rep Boyda, Nancy E. [KS-2] (introduced 9/24/2008)      Cosponsors (6)

H.R.7043: To amend the Internal Revenue Code of 1986 to provide for expensing of installing underground electric lines within the Hurricane Gustav disaster area, and for other purposes.
Sponsor: Rep Cazayoux, Donald J., Jr. [LA-6] (introduced 9/24/2008)      Cosponsors (None)

H.R.7044: To amend the Internal Revenue Code of 1986 to allow a temporary dividends received deduction for taxable years beginning in 2008 or 2009.
Sponsor: Rep English, Phil [PA-3] (introduced 9/24/2008)      Cosponsors (1)

H.R.7055: To amend the Internal Revenue Code of 1986 to allow individuals either a credit against income tax or a deduction for expenses paid or incurred by reason of a voluntary or mandatory evacuation.
Sponsor: Rep Paul, Ron [TX-14] (introduced 9/24/2008)      Cosponsors (None)

S.3561: A bill to amend the Internal Revenue Code of 1986 to provide a refundable credit against income tax to assist individuals with high residential energy costs, and for other purposes.
Sponsor: Sen Clinton, Hillary Rodham [NY] (introduced 9/24/2008)      Cosponsors (None)

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.

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