Daily Tax Update - November 24, 2009

THE DAILY TAX UPDATE WILL BE PUBLISHED ON A PERIODIC BASIS UNTIL CONGRESS RETURNS FROM ITS THANKSGIVING RECESS ON NOVEMBER 30^TH

IRS, TREASURY RELEASE 2009-2010 PRIORITY GUIDANCE PLAN: Today, the IRS and Treasury released the 2009 - 2010 Priority Guidance Plan, commonly referred to as the “business plan.”

• According to the joint statement released by IRS and Treasury, “The 2009 – 2010 Priority Guidance Plan contains 315 projects to be completed over a twelve-month period, from July 2009 through June 2010. This year’s plan will address a variety of issues, including recent legislation, the current economic environment, and important international issues. In addition to the items on this year’s plan, the Appendix lists the more routine guidance that is published each year.” The agencies also said that they plan to update the plan during the year to “reflect additional guidance that we intend to publish during the plan year.”  

FIRST-TIME HOMEBUYER CREDIT EXTENDED: Today, the IRS explained that the “Worker, Homeownership, and Business Assistance Act of 2009” extends the deadline for qualifying home purchases from November 30, 2009, to April 30, 2010. Additionally, if a buyer enters into a binding contract by April 30, 2010, the buyer has until June 30, 2010, to settle on the purchase. According to the IRS, “The maximum credit amount remains at $8,000 for a first-time homebuyer –– that is, a buyer who has not owned a primary residence during the three years up to the date of purchase. But the new law also provides a ‘long-time resident’ credit of up to $6,500 to others who do not qualify as ‘first-time homebuyers.’ To qualify this way, a buyer must have owned and used the same home as a principal or primary residence for at least five consecutive years of the eight-year period ending on the date of purchase of a new home as a primary residence. For all qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 tax returns.”

• Additional information can be accessed here.

MISCELLANEOUS GUIDANCE ISSUED TODAY:
Notice 2009-94 sets forth certain cost-of-living adjustments effective January 1, 2010, applicable to the dollar limitations on benefits and contributions under qualified retirement plans. The limitations that are adjusted by reference to § 415(d) will remain unchanged for 2010. Other limitations applicable to deferred compensation plans are also unchanged for 2010.

TD 9472 contains final regulations providing guidance relating to the application of the section 204(h) notice requirements to a pension plan amendment that is permitted to reduce benefits accrued before the plan amendment’s applicable amendment date. These regulations also reflect certain amendments made to the section 204(h) notice requirements by the Pension Protection Act of 2006. These final regulations generally affect sponsors, administrators, participants, and beneficiaries of pension plans.

Announcement 2009-85 announces that it will temporarily stop accepting determination letter applications for defined benefit plans filed on Form 5307, beginning February 22, 2010. This announcement does not affect the ability of adopting employers to apply for determination letters on Form 5307 for pre-approved defined contribution plans.

The IRS announced the release of the fall 2009 issue of the Statistics of Income Bulletin, featuring data on 143 million individual income tax returns filed for tax year 2007.

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.

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