Daily Tax Update - November 13, 2009

THE DAILY TAX UPDATE WILL BE PUBLISHED ON A PERIODIC BASIS UNTIL CONGRESS RETURNS FROM ITS VETERANS DAY RECESS ON NOVEMBER 16^TH

REID MAY CONSIDER RECONCILIATION PROCESS TO GET HEALTH CARE BILL THROUGH SENATE: There is some speculation that Senate Majority Leader Harry Reid may use the reconciliation process to get the health care reform bill through the Senate. Reconciliation requires only 51 votes while normal Senate rules require legislation to obtain 60 votes to pass. To get 60 votes, Reid needs all 58 Democrats and both of the Senate’s Independents to vote in support of the bill. Reid said that he hopes to bring health care reform legislation to the Senate floor next week and wants to complete work on the bill before Christmas. 

• A Reid spokesman said that he is “working tirelessly” to gather 60 votes for his health care reform bill in order to pass it under “regular order.” The spokesman added that reconciliation “is always an option, but it’s not what we’re looking at now.”

• If Reid goes the “regular option” route, Republicans are promising “weeks and weeks” of debate on “hundreds” of amendments.

MISCELLANEOUS GUIDANCE RELEASED TODAY:
Notice 2009-89 sets forth a process that allows manufacturers to certify to the Internal Revenue Service that a particular vehicle meets the requirements of § 30D of the Internal Revenue Code. Taxpayers purchasing such vehicles can rely on the domestic manufacturer’s (or, in the case of a foreign manufacturer, its domestic distributor’s) certification that both a particular make, model, and model year of vehicle qualifies as a plug-in electric drive motor vehicle under § 30D, and the amount of the credit allowable with respect to the vehicle. The notice also defines when the amended § 30D is effective.

Notice 2009-91 provides guidance to employers paying wages to nonresident alien employees for services performed within the United States. The notice indicates that effective for wages paid on or after January 1, 2010, new rules will be used in determining the amount of income tax to be withheld from the wages of nonresident alien employees performing services within the United States. These new rules will be set forth in the new revision of Publication 15 (Circular E), Employer’s Tax Guide, and other IRS publications.

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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