Daily Tax Update - November 19, 2008

PELOSI – “NO LIKELIHOOD” OF A DECEMBER SESSION:  House Speaker Nancy Pelosi said yesterday that there was “no likelihood” of the House being in session in December to deal with the auto bailout bill. Pelosi said, “I don't see the likelihood of a [December] session. We will either have the votes to do this now or will have to take it up in early January. Not doing it now is a danger.” 

• However, if the Bush Administration or Senate Republicans were to agree to a compromise on an auto bailout bill, the House could be called back into session.
• Senate Democrats are still hopeful that $25 billion for the automakers can be used from the $700 bailout bill, but they do not have the 60 votes required to break a filibuster. 
• Senate Republicans and the Bush Administration support letting the auto manufacturers use the $25 billion Congress authorized for retrofitting auto plants to meet fuel-efficiency standards instead of coming from the bailout bill. 
• Today, Senate Majority Leader Reid lowered expectations that an agreement on the auto loans would be reached this week. Reid said, “If we can't do it here legislatively, I would hope that the secretary of the Treasury would listen loud and clear...and do what I think is appropriate from their perspective.”
• Majority Whip Durbin added, “We're told that the House is opposed to this approach, and if that's the case, then it's not likely.” Durbin said that there is not "a very strong appetite” for Congress to be in next week.

DEMOCRAT APPARENT VICTOR IN ALASKA SENATE RACE:  Yesterday, Anchorage Mayor Mark Begich claimed victory over Sen. Ted Stevens (R-AK). The victory by Begich gives the Democrats a 58-40 seat majority in the Senate in January. The Senate races in Georgia and Minnesota have yet to be determined.

MISCELLANEOUS TAX GUIDANCE ISSUED TODAY:
Revenue Ruling 2008-53 released November 18, provides various prescribed rates for federal income tax purposes including the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate, the adjusted federal long-term tax-exempt rate. These rates are determined as prescribed by § 1274. 
 
The rates are published monthly for purposes of sections 42, 382, 412, 1288, 1274, 7520, 7872, and various other sections of the Internal Revenue Code.

Revenue Procedure 2008-70 sets forth for purposes of section 846 of the Internal Revenue Code the loss payment patterns and discount factors for each property and casualty line of business for the 2008 accident year.  These factors are to be used by property and casualty insurance companies in discounting unpaid losses.  This revenue procedure also corrects the discount factors for the Composite and International (Composite) lines of business for the 2006 and 2007 accident years in Rev. Proc. 2007-9, 2007-1 C.B. 278, and Rev. Proc. 2008-10, 2008-3 I.R.B. 290, for taxpayers that use the composite method of Notice 88-100, 1988-2. C.B. 439.

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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