Daily Tax Update - October 2, 2008

IRS CHIEF COUNSEL KORB ANNOUNCES JANUARY DEPARTURE:  Today, IRS Chief Counsel Donald Korb said he will step down from his post “no later than January 19.” Korb said that he was making his announcement now in order to give IRS Commissioner Schulman sufficient time to consider whom he may recommend to the president as a replacement. Korb said, “I'm very proud of our history of litigation.” Korb added, “We had a good run here.” Korb did not announce his future plans.

SENATE OVERWHELMINGLY APPROVES BAILOUT / TAX EXTENDERS / AMT BILL—HOUSE VOTE  FRIDAY:  Last night, by a vote of 74-25, the Senate passed the “Emergency Economic Stabilization Act of 2008.” Forty Democrats and 34 Republicans voted for it, while nine Democrats, one Independent and 15 Republicans opposed it. The package includes the financial rescue bill with a one-year patch for the AMT plus dozens of expiring tax provisions. 

• Today, President Bush said, “This issue has gone way beyond New York and Wall Street...A lot of people are watching the House of Representatives now to determine whether or not they will be able to act positively on a bill that has been improved.”
  • The President’s remarks can be accessed here. 
• House Majority Leader Steny Hoyer said that he has been talking with House Minority Whip Blunt “three, four, five times a day” about shoring up enough votes to pass the bill.  Hoyer said, “I know he is working this issue; I think many of his members are going to find the [tax extenders] and the FDIC provisions to their liking, so hopefully he'll be able to have some progress. But he'll need 100 Republican votes to pass this.”
• Hoyer added, “Changes are possible...but I don’t think probable because if you make changes, you’re going to slow this process down.” Hoyer said that the Blue Dog Democrats would likely still vote for the package, despite the Senate’s inclusion of the tax extenders. Hoyer said, “They don’t like the fact—I don’t like the fact—that the Senate jammed on us the tax extension,” he added that the loss of Blue Dog votes is “going to be minimal.”
• The Senate roll call vote can be accessed here. 

MISCELLANEOUS GUIDANCE ISSUED TODAY:
Revenue Procedure 2008-60 informs all taxpayers who hold a surety bond or a Treasury Direct Account pursuant to former § 42(j)(6) of the Internal Revenue Code how to make the election, allowed by § 3004(i)(2)(B)(ii) of the Housing Assistance Tax Act of 2008, to discontinue the surety bond or Treasury Direct Account.

TAX BILLS INTRODUCED OCTOBER 1^ST :
S.3659: A bill to amend the Internal Revenue Code of 1986 to provide for the disclosure of schedule M-3 to the Securities and Exchange Commission, to provide for the public disclosure of certain information on such schedule, to provide penalties for failure to file such schedule or inaccurately reporting information on such schedule, and for other purposes.
Sponsor: Sen Schumer, Charles E. [NY] (introduced 10/1/2008)      Cosponsors (None)

S.3675: A bill to amend the Internal Revenue Code of 1986 to provide for the treatment of certain excessive employee remuneration, and for other purposes.
Sponsor: Sen Kerry, John F. [MA] (introduced 10/1/2008)      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.

STEPTOE & JOHNSON LLP - TAX PRACTICE
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