Daily Tax Update - November 14, 2008

CONGRESS TO HOLD LAME-DUCK SESSION ON AUTO AID BILL:  The House is expected to return for a lame-duck session next Wednesday and may take up a bill to aid the auto industry and possibly a new stimulus bill. However, the Administration has not endorsed another stimulus bill and has not come out in support of aid to the auto industry. 

• Senate Majority Leader Harry Reid (D-NV) said that he would convene a lame-duck session on Monday and hoped to move forward with legislation that would extend unemployment benefits and provide aid for the automobile companies. A spokesman for Reid said, “We cannot do it without the support of Senate Republicans, who I hope will join us to pass a bill that saves the jobs and protects the livelihoods of millions of hard-working Americans.” It appears that the Senate will try to hold a vote on the auto bailout/unemployment benefits bill Wednesday.
• House Democrats said that an auto aid bill would need to be passed in the Senate first, which some Democrats said was very unlikely. The bill would need 60 votes to pass. The Chairman of the Senate Banking Committee Chris Dodd (D-CT) said yesterday, “Right now, I don’t think there are the votes.” Dodd added, “I want to be careful about bringing up a proposition that might fail in light of the fact the authority exists, and under an Obama administration there seems to be a greater willingness to deal with the issue. So there are some political considerations to be made.”
• Yesterday, Treasury Secretary Henry Paulson said, “I cannot imagine anything else will have a bigger stimulus impact than getting credit going again, getting lending going again.” Paulson also said that he did not believe that aid to the automobile industry should be funded by from the $700 bailout bill. Paulson said, “We care about our automotive industry, when you look at autos and that whole food chain, it is critical.” Paulson added, “We need a solution, but that solution has got to be one that leads to viability...The intent of the TARP was to deal with the financial industry.”

MISCELLANEOUS GUIDANCE ISSUED THIS WEEK:
Revenue Procedure 2008-69 released November 13, provides REITs with a method for applying the prohibited transactions tax safe harbor under §§ 857(b)(6)(C)(iii) and (D)(iv) of the Internal Revenue Code for a taxable year that begins on or before July 30, 2008, and ends on or after July 31, 2008.

Notice 2008-106 released November 13, informs taxpayers that the new 9 percent applicable percentage floor for certain buildings that are placed in service after July 30, 2008, and before December 31, 2008, enacted pursuant to § 3002(a)(1) of the Housing Assistance Tax Act of 2008, applies notwithstanding a pre-Act irrevocable election by the taxpayer to apply to these buildings an applicable percentage that is less than 9 percent.

Revenue Procedure 2008-67 released November 12, sets forth the procedure by which the sponsor of a multiemployer pension plan may request and obtain approval of an extension of an amortization period in accordance with § 431(d) of the Internal Revenue Code (Code) and § 304(d) of the Employee Retirement Income Security Act of 1974 (ERISA). This revenue procedure supersedes Rev. Proc. 2004-44, 2004-31 I.R.B.134.

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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