Daily Tax Update - October 9, 2009

MODERATE SENATE DEMOCRATS CAUTIOUS OF CBO COST ESTIMATES: Several moderate Senate Democrats were skeptical about the CBO’s $829 billion scoring for the Finance Committee health care bill. Sen. Ben Nelson said, “I don't know that outside the Beltway people believe those numbers...The assumptions are pretty substantial.”

• Sen. Chris Dodd said, “Scoring is important. I wouldn't minimize it.” Dodd added, “But it's not just scoring; it's actually doing something about something...There are a lot of us that care about what actually happens in this bill.” 
• Meanwhile, 30 Senate Democrats wrote Senate Majority Leader Harry Reid yesterday voicing support for a public option provision in the final bill. Their letter said, “We have spent the better part of this year fighting for health reform that would provide insurance access and continuity to every American in a fiscally responsible manner. We are concerned that—absent a competitive and continuous public insurance option—health reform legislation will not produce nationwide access and ongoing cost containment. For that reason, we are asking for your leadership on ensuring that the merged health reform bill contains a public insurance option.”
• On the House side, Speaker Nancy Pelosi asked Ways and Means Committee Chairman Charles Rangel to examine the idea of a windfall profit tax on health insurers. Pelosi said, “When we see what that is, maybe that's something we can put in the mix.” Pelosi added, “But this is very preliminary...I believe that all of the participants, whether it's the insurance companies or the pharmaceutical industries, have much more they can put on the table to help reduce cost and take us in a downward direction, in terms of spending on this health care bill.”

TAX COURT AMENDS ITS RULES OF PRACTICE & PROCEDURE: On September 18, 2009, the United States Tax Court’s Chief Judge John O. Colvin announced that the court has adopted amendments to its Rules of Practice and Procedure. The Tax Court described several of the amendments as conforming the Tax Court’s Rules, including some of the court’s discovery rules, more closely to selected procedures from the Federal Rules of Civil Procedure. Most of these amendments are effective January 1, 2010. For example, the amended rules allow a party to take the deposition of a party witness without the consent of all the parties. Under the former rules, a party witness could only be deposed upon the consent of all the parties. 

• A document containing all of the amendments and an explanation of each amendment can be accessed here.
• For additional information, contact Arthur L. Bailey – abailey@steptoe.com, J. Walker Johnson – wjohnson@steptoe.com or Matthew D. Lerner – mlerner@steptoe.com 

MISCELLANEOUS GUIDANCE RELEASED TODAY:
A-2009-77 announces the Twenty-Second Annual Institute on Current Issues in International Taxation, jointly sponsored by the Internal Revenue Service and The George Washington University Law School, to be held on December 10 and 11, 2009.

TAX BILLS INTRODUCED OCTOBER 8^TH:
H.R.3758: To amend the Internal Revenue Code of 1986 to increase, extend, and make permanent the above-the-line deduction for certain expenses of elementary and secondary school teachers.
Sponsor: Rep Reichert, David G. [WA-8] (introduced 10/8/2009)      Cosponsors (1)

H.R.3760: To amend the Internal Revenue Code of 1986 to provide a Federal income tax credit for certain home purchases.
Sponsor: Rep Biggert, Judy [IL-13] (introduced 10/8/2009)      Cosponsors (9)

H.R.3761: To amend the Internal Revenue Code of 1986 to extend the first-time homebuyer tax credit, and for other purposes.
Sponsor: Rep Biggert, Judy [IL-13] (introduced 10/8/2009)      Cosponsors (12)

H.R.3773: To amend the Internal Revenue Code of 1986 to extend the first-time homebuyer tax credit, and for other purposes.
Sponsor: Rep Edwards, Donna F. [MD-4] (introduced 10/8/2009)      Cosponsors (5)

H.R.3776: To amend the Internal Revenue Code of 1986 to provide a 100 percent deduction for the health insurance costs of individuals.
Sponsor: Rep Graves, Sam [MO-6] (introduced 10/8/2009)      Cosponsors (None)

H.R.3779: To amend the Internal Revenue Code of 1986 to extend and expand the homebuyer tax credit.
Sponsor: Rep Lance, Leonard [NJ-7] (introduced 10/8/2009)      Cosponsors (None)

H.R.3780: To amend the Internal Revenue Code of 1986 to extend the first-time homebuyer tax credit for members of the Armed Forces and certain Federal employees serving on extended duty.
Sponsor: Rep Maffei, Daniel B. [NY-25] (introduced 10/8/2009)      Cosponsors (None)

H.R.3784: To amend the Internal Revenue Code of 1986 to expand the work opportunity tax credit and increase the employer-provided child care credit.
Sponsor: Rep Rooney, Thomas J. [FL-16] (introduced 10/8/2009)      Cosponsors (1)

S.1763: A bill to amend the Internal Revenue Code of 1986 to deny the deduction for advertising and promotional expenses for prescription pharmaceuticals.
Sponsor: Sen Franken, Al [MN] (introduced 10/8/2009)      Cosponsors (2)

S.1769: A bill to amend the Internal Revenue Code of 1986 to allow certain coins to be acquired by individual retirement accounts and other individually directed pension plan accounts, and for other purposes.
Sponsor: Sen Vitter, David [LA] (introduced 10/8/2009)      Cosponsors (None)

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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