Daily Tax Update - March 26, 2010

THE DAILY TAX UPDATE WILL BE PUBLISHED ON A PERIODIC BASIS UNTIL CONGRESS RETURNS FROM ITS SPRING RECESS ON APRIL 12^TH

HOUSE PASSES RECONCILIATION BILL – AWAITS PRESIDENT’S SIGNATURE: Last night, the House approved “The Health Care and Education Reconciliation Act of 2010” (H.R. 4872) by a vote of 220 to 207. Changes contained in the reconciliation bill include higher threshold levels for a 40-percent excise tax on insurers offering so-called “Cadillac” plans, a 3.8-percent Medicare payroll tax on the unearned income of individuals making more than $200,000 ($250,000 for joint filers), and a 2.3-percent excise tax on medical devices.

• Today, at the House enrollment ceremony for the bill, House Speaker Nancy Pelosi was presented a cake for her 70^th birthday. Pelosi said, “Can you imagine a more important birthday privilege than to be signing health care for all Americans? This is our gift to the American people.” Ways and Means Chairman Sander Levin quipped, “This legislation was not a piece of cake.” Now that House has officially enrolled the bill, it was sent to President Obama for his signature.
• House Minority Leader John Boehner and other Republicans have vowed to repeal the bill. Boehner said, “The tax hikes, the Medicare cuts, the job-killing mandates, the accounting gimmicks, the backroom deals—we are going to fight to repeal them at every single turn. And the fact is, this bill should be repealed and should be replaced with commonsense steps that will help reduce the cost of insurance in America.” During a speech in Iowa yesterday, the President said, “This is the reform that some folks in Washington are still hollering about, still shouting about. Now that they passed it -- now that we passed it, they’re already promising to repeal it. They’re actually going to run on a platform of repeal in November. You’ve been hearing that. And my attitude is: Go for it.” 
• At a hearing yesterday, IRS Commissioner Doug Shulman stated that the IRS’s jurisdiction in the implementation of health care bill would cover only the tax portions. Shulman said, “We've proved quite adept with the stimulus checks under President Bush, the Recovery Act under President Obama, the [earned income tax credit] we've administered for years. The important thing for me is to be given plenty of lead time, be given administrative flexibility, and then be given the right resources to implement it." The health care bill calls for the IRS to administer a tax credit available in 2010 to help small businesses provide healthcare coverage for workers and implement beginning in 2013 a 3.8-percent Medicare payroll tax on investment income and well as collect an excise tax on high-cost insurance plans in 2018.
• A summary of the bill can be accessed here.

GRASSLEY BILL WOULD MAKE HEALTH CARE PROVISIONS APPLICABLE TO WHITE HOUSE AND ALL OF CONGRESS: Yesterday, Ranking Senate Finance member Charles Grassley introduced a bill to apply the new health care law to the President, Vice President, cabinet members, top White House staff, and the congressional staff who drafted the measure enacted this week. Grassley said that previous amendments to “establish this accountability in Congress and the administration have twice been rejected, first last December and again this week.” Grassley continued, “As a result, President Obama will not have to live under the Obama health care reforms, and neither will the congressional staff who helped to write the overhaul. The message to the people at the grassroots is that it’s good enough for you, but not for us.” Grassley added, “It’s only fair and logical that administration leaders and congressional staff, who fought so hard to overhaul America’s health care system, experience it themselves. If the reforms are as good as promised, then they’ll know it first-hand. If there are problems, public officials will be in a position to really understand the problems, as they should.” A companion bill is expected to be introduced in the House.

SCHUMER, KYL—JOINED BY 15 SENATE COLLEAGUES—UNVEIL 'PONZI VICTIMS' TAX BILL OF RIGHTS: Yesterday, Senators Charles Schumer and Jon Kyl introduced bipartisan legislation that will “provide tax relief to victims of Ponzi schemes so that small investors can recoup some of their losses from these scams. The bill is co-sponsored by 15 other Senators. The measure will assist victims of frauds such as those run by disgraced financiers Bernie Madoff and Alan Stanford.” According to the Senators, “In order to expand relief available to Madoff’s smaller investors, the Schumer-Kyl legislation would increase the amount a victimized investor can carry back on his income taxes; allow victims who lost money within an IRA to recoup some of the losses for the first time by allowing a theft loss for their basis in the account, or half their total losses; raise the limit on tax-free contributions to retirement accounts so investors can replenish losses quicker; and waive penalties for withdrawing from retirement accounts to increase daily cash flow.”

• Additional information can be accessed here.   

TAX BILLS INTRODUCED MARCH 25TH:
H.R.4940: To amend the Internal Revenue Code of 1986 to extend certain tax incentives for alcohol used as fuel and to amend the Harmonized Tariff Schedule of the United States to extend additional duties on ethanol.
Sponsor: Rep Pomeroy, Earl [ND] (introduced 3/25/2010)      Cosponsors (29)

H.R.4943: To require the Internal Revenue Service to include in the Form 1040 instruction booklet information relating to Federal Government revenues, spending, and public debt.
Sponsor: Rep McCarthy, Kevin [CA-22] (introduced 3/25/2010)      Cosponsors (4)

H.R.4957: To amend the Internal Revenue Code of 1986 to extend the funding and expenditure authority of the Airport and Airway Trust Fund, to amend title 49, United States Code, to extend authorizations for the airport improvement program, and for other purposes.
Sponsor: Rep Richardson, Laura [CA-37] (introduced 3/25/2010)      Cosponsors (None)

H.R.4964: To amend the Internal Revenue Code of 1986 to provide individuals a deduction for commuting expenses.
Sponsor: Rep Diaz-Balart, Mario [FL-25] (introduced 3/25/2010)      Cosponsors (None)

H.R.4965: To amend the Internal Revenue Code of 1986 to reduce the employer portion of payroll taxes in the case of employers who expand payroll in 2010 and 2011 in areas with high unemployment and to make permanent the research and development credit, bonus depreciation, and increased expensing limitations.
Sponsor: Rep Donnelly, Joe [IN-2] (introduced 3/25/2010)      Cosponsors (None)

H.R.4967: To amend the Internal Revenue Code of 1986 to provide an exception to the arbitrage rules for prepayments for electricity generated from renewable resources.
Sponsor: Rep Giffords, Gabrielle [AZ-8] (introduced 3/25/2010)      Cosponsors (6)

H.R.4976: To amend the Internal Revenue Code of 1986 to regulate and tax Internet gambling.
Sponsor: Rep McDermott, Jim [WA-7] (introduced 3/25/2010)      Cosponsors (3)

H.R.4981: To amend the Internal Revenue Code of 1986 to provide a religious exception to the requirement that certain tax return preparers file returns on magnetic media.
Sponsor: Rep Peterson, Collin C. [MN-7] (introduced 3/25/2010)      Cosponsors (5)

H.R.4990: To amend the Internal Revenue Code of 1986 to modify and extend the credit for alternative motor vehicles, and for other purposes.
Sponsor: Rep Sestak, Joe [PA-7] (introduced 3/25/2010)      Cosponsors (None)

S.3164: A bill to amend the Internal Revenue Code of 1986 to extend financing of the Superfund.
Sponsor: Sen Lautenberg, Frank R. [NJ] (introduced 3/25/2010)      Cosponsors (5)

S.3166: A bill to amend the Internal Revenue Code of 1986 to provide tax relief for persons with investment losses due to fraud or embezzlement.
Sponsor: Sen Schumer, Charles E. [NY] (introduced 3/25/2010)      Cosponsors (17)

S.3183: A bill to amend the Internal Revenue Code of 1986 to extend the nonbusiness energy property credit to roofs with pigmented coatings which meet Energy Star program requirements.
Sponsor: Sen Wyden, Ron [OR] (introduced 3/25/2010)      Cosponsors (1)

S.3187: A bill to amend the Internal Revenue Code of 1986 to extend the funding and expenditure authority of the airport and Airway Trust Fund, to amend title 49, United States Code, to extend authorizations for the airport improvement program, and for other purposes.
Sponsor: Sen Rockefeller, John D., IV [WV] (introduced 3/25/2010)      Cosponsors (None)

S.3188: A bill to amend the Internal Revenue Code of 1986 to provide an investment tax credit for biomass heating property.
Sponsor: Sen Shaheen, Jeanne [NH] (introduced 3/25/2010)      Cosponsors (3) 

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