Daily Tax Update - April 07, 2005

HOUSE SCHEDULED TO TAKE UP PERMANENT ESTATE TAX REPEAL BILL
Next week, the House is scheduled to consider legislation to make the estate tax repeal permanent at an estimated cost of $256 billion over 10 years. While the measure is expected to easily pass the House, its fate in the Senate is less certain. Both the Senate sponsor, Sen. Jon Kyl (R-AZ) and Senate Finance Committee Chairman Charles Grassley (R-IA) have suggested that they might be willing to compromise if support is lacking for a full repeal.

TAX BILLS INTRODUCED APRIL 6:

  • H.R. 1499 sponsored by Rep. Virginia Foxx (R-NC) would allow a deduction to members of the Armed Forces serving in a combat zone for contributions to their individual retirement plans even if the compensation on which such contribution is based is excluded from gross income.
  • H.R. 1500 sponsored by Rep. David Dreier (R-CA) would make the 2003 reduction in the individual capital gains tax rates permanent and further reduce and simplify such rates and reduce the corporate capital gains rate.
  • H.R. 1504 sponsored by Rep. Rob Bishop (R-UT) would increase the deduction for host families of foreign exchange and other students from $50 per month to $200 per month.
  • H.R. 1508 sponsored by Rep. Rahm Emanuel (D-IL) would facilitate automatic enrollment in 401(k) plans.
  • H.R. 1510 sponsored by Rep. Mark Foley (R-FL) would reduce the depreciation recovery period for roof systems.
  • H.R. 1511 sponsored by Rep. Mark Foley (R-FL) would provide a 5-year extension of the credit for electricity produced from wind.
  • H.R. 1516 sponsored by Rep. Bobby Jindal (R-LA ) would allow a credit against income tax for expenditures incurred by the taxpayer to restore or protect wetlands from coastal erosion.
  • H.R. 1517 sponsored by Rep. Sam Johnson (R-TX) would repeal the 1993 income tax increase on Social Security benefits.
  • H.R. 1518 sponsored by Rep. Ric Keller R-FL) would expand the exclusion for employer-provided educational assistance to include educational assistance provided to dependents of employees.
  • H.R. 1520 sponsored by Rep. Ron Lewis (R-KY) would provide for the tax on distilled spirits, wine, and beer to be collected quarterly from certain small taxpayers.
  • H.R. 1521 sponsored by Rep. Carolyn Maloney (D-NY) would deny all deductions for business expenses associated with the use of a club that discriminates on the basis of sex, race, or color.
  • S. 713 sponsored by Sen. Pat Roberts (R-KS) would provide for collegiate housing and infrastructure grants.
  • S. 715 sponsored by Sen. Tom Harkin (D-IA) would encourage investment in facilities using wind to produce electricity.
  • S. 720 sponsored by Sen. Jeff Bingaman (D-MN) would eliminate unnecessary paperwork burdens on government and small businesses by reducing the number of excise tax returns filed by small taxpayers that pay the Federal excise tax on wines and beer.
  • S. 722 sponsored by Sen. Rick Santorum (R-PA) would reduce the tax on beer to its pre-1991 level.
  • S. 723 sponsored by Sen. Olympia Snowe (R-ME) would allow small businesses to set up simple cafeteria plans to provide nontaxable employee benefits to their employees, make changes in the requirements for cafeteria plans, flexible spending accounts, and benefits provided under such plans or accounts.

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