Daily Tax Update - March 15, 2006

TAX RECONCILIATION CONFEREES SCHEDULED TO MEET LATER TODAY:
The first meeting of the tax reconciliation conference committee is scheduled to meet later today. The House conferees are Ways and Means Committee Chairman William Thomas (R-CA), Reps. Jim McCrery (R-LA), Dave Camp (R-MI), ranking member Charles Rangel (D-NY), and Rep. Pete Stark (D-CA). The Senate conferees are: Finance Committee Chairman Charles Grassley (R-IA), ranking member Max Baucus (D-MT) and Sen. Jon Kyl (R-AZ).

SENATE NARROWLY DEFEATS "PAY-AS-YOU-GO" FOR TAX CUTS:
Yesterday, Senate Republicans narrowly defeated Democratic efforts to impose "pay-as-you-go" budget rules for tax cuts. Senate Budget Committee Chairman Judd Gregg (R-NH) said that the proposed pay-go rules would lead to tax increases. Gregg said, "The practical effect of this is to raise taxes. And so it is not pay-go. It is tax-go."

  • Sen. Tom Coburn (R-OK) voted in support of a similar pay-go provision last year, but voted against it yesterday. Coburn said, "I'm for pay-as-you-go. I'm very critical that we didn't offer a real legitimate [amendment] saying if you're going to raise taxes you've got to cut spending. That's not what this pay/go does."

TAX BILL INTRODUCED MARCH 14:

  • H.R. 4945 sponsored by Rep. Loretta Sanchez (D-CA) would encourage new school construction through the creation of a new class of bond.
  • H.R. 4952 sponsored by Rep. Bobby Jindal (R-LA) would expand the combat zone income tax exclusion to include income for the period of transit to the combat zone and remove the limitation on such exclusion for commissioned officers.
  • S. 2414 sponsored by Sen. Evan Bayh (D-IN) would require broker reporting of customer's basis in securities transactions.

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