Daily Tax Update - June 23, 2006

TIMING, OUTLOOK FOR SENATE ACTION ON ESTATE TAX BILL UNCERTAIN:
Yesterday, after House passage of legislation which would permanently reduce, but not repeal the estate tax, House Ways and Means Committee Chairman Bill Thomas (R-CA) reiterated his position that he wants the Senate to act on the House-approved bill. Thomas said, "We will send it over to the Senate and see if there are 60 members of the Senate who want to once and for all do away with the uncertainty of the estate tax. . . This is not a first offer. It is the only offer to the majority leader's request that the chairman will offer." Thomas said, "I think people over there [Senate] need to know that this is it, and they have the opportunity to pass it or not pass it. I'm not interested in ping-pong."

  • Senate Majority Leader Bill Frist (R-TN) said earlier this month he wanted the Senate to vote on a compromise bill before the July 4th recess. However, following yesterday's vote, Frist was uncertain of the Senate schedule for action. The Majority Leader said he would not bring a bill to the Senate floor unless there are 60 votes to pass it, stating that he would "wait to get feedback over the next 48 hours" before deciding how to proceed. Frist could bring up the House-passed bill or an alternative by Sen. Jon Kyl (R-AZ). Regarding the House-passed bill yesterday, Frist said, "We don't know yet. We will look at it, and see what the reaction of our colleagues is and make a decision."
  • A summary of the House-passed bill can be accessed here.

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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
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