Daily Tax Update - November 21, 2008

THE DAILY TAX UPDATE WILL BE PUBLISHED ON A PERIODIC BASIS UNTIL CONGRESS RETURNS DECEMBER 8th 

OBAMA REPORTEDLY NAMES GEITHNER AS TREASURY SECRETARY:  It was reported today that President-Elect Obama will nominate Timothy Geithner to serve as Secretary of the Treasury. Geithner currently serves as President and CEO of the Federal Reserve Bank of New York.

CONGRESS LIKELY TO RETURN IN DECEMBER:  Congress finished its four day lame-duck session and is likely to return the second week in December to work on an auto bailout bill if the Big 3 automakers can come up with a revitalization plan describing how they would use bailout funds. Today, House Speaker Pelosi said, “What we do will be determined by what they do.” Senate Majority Leader Reid said yesterday, “We are prepared to come back into session the week of December 8 to help the auto industry. But only if they present a responsible plan that gives us a realistic chance to get the needed votes.”  

• Before leaving town, the Senate approved a measure that would provide up to three months of extra benefits for those whose unemployment benefits have run out or are about to expire. The House passed the bill in October. House Speaker Pelosi said, “With more Americans filing jobless claims than at any time since the 1992, the Senate's passage of the House's unemployment insurance extension legislation will help speed relief to more than 2 million workers who continue to search for new jobs in these difficult economic times.” The President signed the bill into law today.

MISCELLANEOUS GUIDANCE ISSUED TODAY:
Notice 2008-107 provides adjustments to the limitation on housing expenses for specific locations outside the United States for purposes of section 911 of the Internal Revenue Code.  The adjusted housing expense limitations are to be used in determining the housing cost amount eligible for exclusion or deduction for tax year 2008.

• Notice 2008-107 will appear in Internal Revenue Bulletin 2008-50 on December 15, 2008.

TAX BILLS INTRODUCED NOVEMBER 20^TH:
H.R.7298: To amend the Internal Revenue Code of 1986 to make permanent the deduction for expensing certain depreciable business assets and to allow a deduction for the original purchase of domestically manufactured automobiles.
Sponsor: Rep Lamborn, Doug [CO-5] (introduced 11/20/2008)      Cosponsors (2)

H.R.7300: To provide for the proper application under the Internal Revenue Code of 1986 of the limitations on built-in losses following an ownership change of a bank.
Sponsor: Rep Doggett, Lloyd [TX-25] (introduced 11/20/2008)      Cosponsors (1)

H.R.7303: To amend the Internal Revenue Code of 1986 to allow a one-time, $1,500 credit against income tax for the purchase an automobile manufactured in the United States.
Sponsor: Rep Gohmert, Louie [TX-1] (introduced 11/20/2008)      Cosponsors (None)

S.19: A bill to amend the Internal Revenue Code of 1986 to allow taxpayers to designate a portion of their income tax payment to provide assistance to homeless veterans, and for other purposes.
Sponsor: Sen Clinton, Hillary Rodham [NY] (introduced 11/20/2008)      Cosponsors (None)

S.3710: A bill to amend title XVIII of the Social Security Act and the Employee Retirement Income Security Act of 1974 to provide access to Medicare benefits for individuals ages 55 to 65, to amend the Internal Revenue Code of 1986 to allow a refundable and advanceable credit against income tax for payment of such premiums, and for other purposes.
Sponsor: Sen Rockefeller, John D., IV [WV] (introduced 11/20/2008)      Cosponsors (4)

S.3717: A bill to amend the Internal Revenue Code of 1986 to allow reimbursement from flexible spending accounts for certain dental products.
Sponsor: Sen Stabenow, Debbie [MI] (introduced 11/20/2008)      Cosponsors (1)

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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