Daily Tax Update - December 15, 2005

IRS ISSUES FINAL CHECK-THE-BOX REGULATIONS:
Today, the IRS issued final regulations that amend the check-the-box regulations by adding a number of European business entities to the per se corporations list. Effective December 16, 2005, the Societas Europaea (SE), Estonian Aktsiaselts, Latvian Akciju Sabiedriba, Lithuanian Akcine Bendroves, Slovenian Delniska Druzba, and Liechtenstein Aktiengesellschaft will be treated as corporations for U.S. tax purposes. The final regulations adopt, without change, proposed regulations issued earlier this year.

SENATE EXPECTED TO APPROVE MODIFIED HURRICANE RELIEF BILL:
Today, the Senate is expected to pass an amended hurricane relief tax incentives bill. The bill also contains several technical tax corrections and minor tax cut extensions previously approved by the House. The modified hurricane relief bill could then be sent back to the House, where the House could either accept the Senate version or vote to send the legislation to conference.

HOUSE EXPECTED TO TAKE UP PENSION REFORM BILL:
Later today, the House will vote on the Pension Protection Act (H.R. 2830). An agreement was reached earlier this week that provides two modest changes to the transition rules governing benefit restrictions, including shutdown benefits. The Senate has already passed its version of pension reform legislation. It is unclear whether there will be sufficient time to resolve the differences in the two bills before Congress adjourns later this week.

TAX BILLS INTRODUCED DECEMBER 14:

  • H.R. 4527 sponsored by Rep. Leonard Boswell (D-IA) would provide tax incentives to encourage small business health plans.
  • H.R. 4532 sponsored by Rep. Robert Cramer, Jr. (D-AL) would allow employers a credit against income tax to encourage them to have their employees provide volunteer services that aid science, mathematics, and engineering education in grades K-12.
  • H.R. 4534 sponsored by Rep. Phil English (R-PA) would reform the charitable contribution deduction rules on contributions of certain easements on buildings in registered historic districts.
  • S. 2100 sponsored by Sen. Gordon Smith (R-OR) would improve the deduction for depreciation.

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