Daily Tax Update - July 21, 2006

PENSION NEGOTIATIONS CONTINUE:
House and Senate conferees to the pension reform bill continue to try to finalize the specifics of the bill's pension funding provisions. It is unclear which provisions extending several expiring tax cuts will be included in the bill.

  • Senate Republican leaders want to include a proposal to cut the estate tax as part of the pension package. Senate Finance Chairman Charles Grassley (R-IA), ranking member Max Baucus (D-MT), House Speaker Dennis Hastert (R-IL) and others oppose attaching an estate tax provision to the pension conference report for fear it will jeopardize the entire pension reform package. Senate Minority Leader Harry Reid (D-NV) said, "I hope my Republican colleagues will move in a new direction by dropping the estate tax giveaway so we can quickly pass the pensions conference report. It is time to put American workers before special interests." Ranking Senate Finance Committee member Max Baucus (D-MT) said, "Estate tax is out. That's not going to be in it."

IRS WARNS AGAINST NEW E-MAIL SCAM:
The IRS is warning taxpayers to be alert for e-mail from a fictitious group called the "IRS Antifraud Commission." According to the IRS, "The e-mail claims someone has enrolled the taxpayer's credit card in Electronic Federal Tax Payment System (EFTPS) and has tried to pay taxes with it. The e-mail also says there have been fraud attempts involving the taxpayer's bank account. The e-mail claims money was lost and 'remaining founds' (sic) are blocked. Recipients are asked to click on a link that will help them recover their funds, but the subsequent site asks for personal information that the thieves could use to steal the taxpayer's identity."

  • IRS Commissioner Mark Everson said, "The IRS does not send out unsolicited e-mails asking for personal information. Don't be taken in by these criminals."
  • Additional information can be accessed here.

TAX BILLS INTRODUCED JULY 20:

  • H.R. 5855 sponsored by Rep. Benjamin Cardin (D-MD) would provide for the exclusion from gross income of certain wages of a certified master teacher.
  • H.R. 5856 sponsored by Rep. Rosa DeLauro (D-CA) would allow the allocation of the alternative fuel vehicle refueling property credit to patrons of agricultural cooperatives.
  • H.R. 5860 sponsored by Rep. Ron Paul (R-TX) would allow an above-the-line deduction for State and local, and foreign, real property taxes.
  • S. 3706 sponsored by Sen. Mel Martinez (D-FL) would treat spaceports like airports under the exempt facility bond rules.

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