Daily Tax Update - May 6, 2010

LEVIN: TAX EXTENDERS ON HOUSE FLOOR BY MAY 21: Today, House Ways and Means Chairman Sander Levin said that the House would consider the final tax extenders bill by May 21. House and Senate leaders have been working to resolve the differences between the House and Senate extenders bills and how to pay for the package. Levin said, “It will be on the floor in the next two weeks.”

• Meanwhile, on the Senate side, Democratic leaders want to pass a package of small business tax incentives by Memorial Day. The House approved the bill (H.R. 4849 - The Small Business and Infrastructure Jobs Tax Act of 2010) on March 24. Today, Finance Chairman Max Baucus said he was hopeful to bring the bill to the Committee on Wednesday and did not want unrelated items attached to it.

MISCELLANEOUS GUIDANCE RELEASED TODAY:
Notice 2010-40 provides guidance as to the corporate bond weighted average interest rate and the permissible range of interest rates specified under § 412(b)(5)(B)(ii)(II) of the Internal Revenue Code. It also provides guidance on the corporate bond monthly yield curve (and the corresponding spot segment rates), the 24-month average segment rates, and the funding transitional segment rates under § 430(h)(2). In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under § 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008, and the minimum present value segment rates under § 417(e)(3)(D) as in effect for plan years beginning after 2007.

TAX BILLS INTRODUCED MAY 5TH:
H.R.5207: To amend the Internal Revenue Code of 1986 to improve the operation of employee stock ownership plans, and for other purposes.
Sponsor: Rep Boustany, Charles W., Jr. [LA-7] (introduced 5/5/2010)      Cosponsors (1)

H.R.5215: To amend the Internal Revenue Code of 1986 to repeal the $2,500 limitation on health flexible spending arrangements.
Sponsor: Rep Akin, W. Todd [MO-2] (introduced 5/5/2010)      Cosponsors (None)

S.3309: A bill to amend the Internal Revenue Code of 1986 to modify the rate of tax for the Oil Spill Liability Trust Fund.
Sponsor: Sen Murkowski, Lisa [AK] (introduced 5/5/2010)      Cosponsors (None)

S.3319: A bill to amend the Internal Revenue Code of 1986 to provide recruitment and retention incentives for volunteer emergency service workers.
Sponsor: Sen Collins, Susan M. [ME] (introduced 5/5/2010)      Cosponsors (1)

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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