Daily Tax Update - September 21, 2009

IRS EXTENDS DEADLINE FOR DISCLOSING HIDDEN OFFSHORE ACCOUNTS: The IRS announced today a one-time extension of the deadline for special voluntary disclosures by taxpayers with unreported income from hidden offshore accounts. These taxpayers now have until October 15, 2009. Under special provisions issued in March, taxpayers with these hidden accounts originally had until September 23, 2009 to come forward

• According to the IRS, they “decided to extend this deadline after receiving repeated requests from tax practitioners and attorneys around the country following an influx of taxpayer requests. By extending the deadline for a short period of time, the IRS is providing relief for those taxpayers who had intended to come forward prior to the deadline, but faced logistical and administrative challenges in meeting it. The extension will allow tax preparers and attorneys the necessary time to interview and advise their backlog of taxpayers with these hidden accounts, and prepare the necessary paperwork to qualify for the special penalty provisions. The IRS also announced that there will be no further extensions.”
• For additional information, contact Philip R. West - pwest@steptoe.com or Catherine W. Wilkinson - cwilkinson@steptoe.com

FINANCE HEALTH AMENDMENTS POSTED:  Over 560 amendments have been filed that may be offered to Senate Finance Committee Chairman Baucus’ “America’s Health Future Act of 2009.” The markup begins tomorrow and is expected continue for the next several days.  

MISCELLANEOUS GUIDANCE RELEASED TODAY:
REG-159704-03 contains proposed amendments to 20 CFR part 901 relating to the enrollment of actuaries under section 3042 of the Employee Retirement Income Security Act of 1974 (ERISA).  The proposed amendments would update the eligibility requirements for performing actuarial services for ERISA-covered employee pension benefit plans, including the continuing education requirements, and the standards for performing such actuarial services.  The proposed amendments would affect employee pension benefit plans and the actuaries providing actuarial services to those plans.

Announcement 2009-69 includes changes to Revenue Procedure 2007-65.  Specifically, the announcement expands the rights of developers and owners to enter into agreements for the purchase of the wind energy property owned by the partnership to permit a purchase price determined prior to exercise if the parties reasonably believe that the price will not be less than the fair market value of the energy property at the time the right may be exercised, clarifies how section 469 applies to credits generated by wind energy facilities, clarifies that the revenue procedure only provides safe harbor requirements and makes conforming changes to the revenue procedure to reflect these three changes.

Notice 2009-81 explains the circumstances under which the 4-year replacement period under section 1033(e)(2) is extended for livestock sold on account of drought.   The Appendix to this notice contains a list of counties that experienced exceptional, extreme, or severe drought conditions during the 12-month period ending August 31, 2009.  Taxpayers may use this list to determine if an extension is available.

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.