Daily Tax Update - July 26, 2006

HOUSE EXPECTED TO VOTE ON ESTATE TAX, EXTENDERS PACKAGE THIS WEEK:
Today, House Speaker Dennis Hastert (R-IL) said that the House would take up legislation by the end of this week that combines extensions of expired tax cuts with another version of a permanent estate tax reduction. Hastert said, "[We're going] to move forward and pass a piece of legislation that deals with the extenders and inheritance tax." Details of the new combined extenders/estate tax bill have not been released but it is expected to include a permanent reduction of the estate tax, a tax cut for gains on timber sales, and extensions of temporary tax cuts, including the research and development tax credit, tuition deduction and state sales tax deduction.

  • Senate Finance Committee Chairman Charles Grassley (R-IA) and ranking member Max Baucus (D-MT) still want to keep the tax extenders in the pension reform conference bill.

"BUSINESS TAX SIMPLIFICATION ACT" PULLED FROM HOUSE FLOOR:
The House did not vote on a bill yesterday which would have required businesses to have a physical presence in a state for 21 or more days a year to be subject to the state's business taxes, including corporate income taxes. The bill was withdrawn because of objections from state government officials about the potential loss of significant tax revenue.

TAX BILLS INTRODUCED JULY 25:

  • H.R. 5884 sponsored by Rep. Jim Ramstad (R-MN) would authorize the Secretary of the Treasury to extend the date for making a gift tax qualified terminable interest property election.
  • H.R. 5886 sponsored by Rep. Pete Stark (D-CA) would provide for an AmeriCare that assures the provision of health insurance coverage to all residents.

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