Daily Tax Update - October 29, 2008

THE DAILY TAX UPDATE WILL BE PUBLISHED ON A PERIODIC BASIS UNTIL CONGRESS RETURNS NOVEMBER 17^TH:

WAYS AND MEANS COMMITTEE HOLDS HEARING ON ECONOMY:  Today, the House Ways and Means Committee held a hearing focusing on economic recovery and job creation through investment. Testimony came from several governors and mayors as well as numerous private sector witnesses. 

• In announcing the hearing, Committee Chairman Charles Rangel said, “American families are hurting and they are looking to Congress for solutions to help our economy recover and create new jobs. This hearing will examine the growing challenges facing working families as well as State and local governments to determine how we can best restore economic security throughout our nation.”  
• Democratic leaders have been discussing the possibility of a stimulus plan in the $150 billion range. Today, Rangel cautioned that “there is no $150 billion package and we will not have any package at all unless the president agrees.”  
• House Speaker Nancy Pelosi said earlier this week that the new Democratic stimulus package would address long- and short-term needs, including the creation of “good paying” domestic jobs. Pelosi said, “We must create millions of green jobs pursuing energy independence, educate a skilled workforce to make American innovation the engine for economic growth, and build a high-tech infrastructure that brings the power of renewable energy and broadband to every small business and home in America.” 
• Testimony from the hearing can be accessed here.   
• In connection with the hearing, the Joint Committee on Taxation has released four reports:
  • Present Law Related to the Individual Income and Social Insurance Taxes as in Effect for 2009 and Background Data Related to the Distribution of Federal Taxes
  • Present Law and Issues Related to Infrastructure Finance
  • Present Law and Background Relating to Valuing Assets in Defined Benefit
  • Present Law Tax Treatment of the Cost of Health Care 

INFORMATION REPORTING PROGRAM ADVISORY COMMITTEE’S RECOMMENDATIONS RELEASED:  Today, the Information Reporting Program Advisory Committee (IRPAC) released the advisory group’s recommendations on a wide range of tax administration issues. Based on its findings and discussions, IRPAC made more than 60 recommendations on a broad array of issues and concerns Service-wide, key among them:

• Masking the Taxpayer Information Number (TIN) on information reporting forms.
• Improving instructions for disaster reporting of postponed annual tax year contributions to IRAs.
• Improving the reporting return (Form 990) for tax-exempt organizations.
• Providing guidance for taxpayers receiving Form 1099 or 1042-S0 and Schedules K-1 for the same partnership income.
• Providing tax professionals hypothetical situations which describe Circular 230 violations and their corresponding sanction ranges.
• Additional information can be accessed here.   

MISCELLANEOUS GUIDANCE ISSUED THIS WEEK:
REG-115457-08 provides notice of a public hearing on proposed regulations by cross-reference to temporary regulations relating to the simplification of procedures for automatic extensions of time to file certain returns. These simplified procedures are aimed at reducing overall taxpayer burden.

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.

• Learn more about the members of the tax practice group.