Daily Tax Update - March 25, 2010

SENATE APPROVES RECONCILIATION BILL—HOUSE TO REVOTE: Today, the Senate passed the reconciliation “fix-it” bill by a vote of 56-43. Democrats voting against the bill were Senators Blanche Lincoln, Mark Pryor and Ben Nelson and all Republicans. The bill will now have to go back to the House for final approval because the Senate Parliamentarian ruled yesterday that two provisions related to Pell grants for students violated budget rules. The House is expected to approve the bill later today and it will then be sent to the President for his signature. The two-week Congressional recess begins on March 29.

• Senate Finance Chairman Max Baucus said, “The bill we passed today is a set of common-sense improvements to the historic health care reform law. Americans have been fighting for health care reform for nearly a century and today, the wait is over. Congress went through the most full and transparent process of any major piece of legislation in memory to pass the landmark bill President Obama signed into law and tackle the health care crisis head on. The new health care reform law guarantees meaningful insurance reform that covers people with pre-existing conditions, gives Americans more access to quality, affordable care and controls the growth of health care costs in years to come. The improvements passed today build on this landmark law and make health care more affordable for families, seniors, small businesses and federal and state budgets.”
• Regarding the two items the Senate Parliamentarian ruled out of order, Senate Budget Chairman Kent Conrad said, “It is such a nothing that nobody thought [it] would be an issue. It is a technical conforming amendment simply to put the legislation in line with what had already occurred and so it doesn’t [have a requisite cost estimate], and it was on that basis that it was cut out. ... That’s just not typically something that would be any kind of a flag.” Conrad added, “I could have spent two years going over that bill. I would have never thought that was a violation of budget reconciliation rules.”  
• In response to the numerous amendments offered by Republicans, Senate Majority Leader Harry Reid said yesterday, “There's no attempt to improve the bill. There's an attempt to destroy this bill.”
• Senate Minority Leader Mitch McConnell countered, “The majority leader may not think we're serious about changing the bill, but we'd like to change the bill, and with a little help from our friends on the other side we could improve the bill significantly.”

MISCELLANEOUS GUIDANCE RELEASED TODAY:
Notice 2010-29 provides interim rules to the issuers of variable annuity contracts on issues that arise under §§ 807 and 816 as a result of the adoption of Actuarial Guideline XLIII.

Notice 2010-29 will be in IRB 2010-15, dated April 12, 2010.

TAX BILL INTRODUCED MARCH 24TH:
H.R.4930: To amend the Internal Revenue Code of 1986 to provide a partial exclusion from gross income of gain from the sale of non-principal residences.
Sponsor: Rep Heller, Dean [NV-2] (introduced 3/24/2010)      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.

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