Daily Tax Update - July 28, 2006

NEW SCENARIO DEVISED FOR PASSING PENSION, TAX EXTENDERS AND ESTATE TAX BILL:
Today, House and Senate Republican leaders are working on an alternative plan for passing pension reform, tax, and minimum-wage measures by the August recess. Under the new "trifecta" strategy, a package of tax extenders, a permanent reduction in the estate tax and an increase in the minimum wage would be combined into a single bill. The House may take up the "trifecta" bill later today and a separate pension bill. The House is scheduled to recess later tonight or tomorrow. It is unclear whether there are enough Senate Democrats to pass the "trifecta" bill. The Senate is scheduled to recess at the end of next week.

FINANCE COMMITTEE SCHEDULES HEARING ON TAX REFORM:
On August 3, the Senate Finance Committee will hold a hearing titled "Kick-Off for Tax Reform: Tackling the Tax Code." Several panel members from the President's Advisory Panel on Federal Tax Reform are scheduled to testify.

TAX BILLS INTRODUCED JULY 27:

  • H.R. 5917 sponsored by Rep. Michael Sodrel (R-IN) would provide that tips received for certain services shall not be subject to income or employment taxes.
  • H.R. 5920 sponsored by Rep. Frank Wolf (R-VA) would exclude from gross income certain combat zone compensation of civilian employees of the United States.
  • H.R. 5932 sponsored by Rep. Terry Everett (R-AL) would authorize agricultural producers to establish and contribute to tax-exempt farm risk management accounts in lieu of obtaining federally subsidized crop insurance or noninsured crop assistance, provide for contributions to such accounts by the Secretary of Agriculture, specify the situations in which amounts may be paid to producers from such accounts, and limit the total amount of such distributions to a producer during a taxable year.
  • S. 3745 sponsored by Sen. Debbie Stabenow (D-MI) would allow a tax credit for certain employer-provided retiree health care coverage.
  • S. 3754 sponsored by Sen. Mel Martinez (D-FL) would allow individuals a refundable credit against income tax for the purchase of private health insurance.

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