Daily Tax Update - August 5, 2005

PRESIDENT DISCUSSES PRIORITIES FOR UPCOMING LEGISLATIVE SESSION:
In a speech on August 3, President Bush discussed his second term accomplishments and priorities for Congress after Labor Day. The President said, "In Washington, we're working on two great goals; one, strengthening our economy so people can realize their dreams, and defending this country. And we're making good progress on both. This economy of ours is strong, it is getting stronger, and the amazing thing is to remember where we have come from. We went through a recession, and a stock market correction, and a terrorist attack, and corporate scandals, and war. And in spite of that, this economy is growing at some of the highest levels ever." The President added, "I hope Congress gets a good rest because they got a lot of work to do when they get back. . . Congress needs to continue debating Social Security. . . let's work together to fix it."

  • On the issue of taxes, the President said, "When Congress gets back, I think they ought to do two things. One, I think they ought to make the tax cuts we passed permanent. And that includes getting rid of the death tax forever. (And as I mentioned, I'm looking forward to -- to the tax simplification ideas. It's not going to be easy, but it's necessary.)"

TAX BILLS INTRODUCED JULY 29:

  • H.R. 3629 sponsored by Rep. Lloyd Doggett (D-TX) would allow the subchapter S election to be made on a return filed before the due date with extensions, reduce the payroll deposit penalties for failures to make deposits in the prescribed manner, and allow a married couple who operates a unincorporated business as co-owners to file separate self-employment tax returns.
  • H.R. 3632 sponsored by Rep. Steve LaTourette (R-OH) would allow a deduction for expenses related to the purchase and installation of qualifying electronic premise security systems. 
  • H.R. 3643 sponsored by Rep. Dave Weldon (R-FL) would treat spaceports like airports under the exempt facility bond rules.
  • S.1553 sponsored by Sen. Christopher Bond (R-MO) would enhance tax incentives for small property and casualty insurance companies.
  • S. 1559 sponsored by Sen. Mary Landrieu (D-LA) would provide taxpayers a tax check-off to designate certain annual contributions to the Armed Forces Relief Trust for an above-the-line deduction not to exceed $1,000.
  • S. 1573 sponsored by Sen. Elizabeth Dole (R-NC) would encourage the funding of collectively bargained retiree health benefits.
  • S. 1584 sponsored by Sen. Orrin Hatch (R-UT) would provide for a nonrefundable tax credit against income tax for individuals who purchase a residential safe storage device for the safe storage of firearms.
  • S. 1590 sponsored by Sen. Evan Bayh (D-IN) would increase participation and savings in cash or deferred plans through automatic contribution and default investment arrangements.
  • S. 1591 sponsored by Sen. Max Baucus (D-MT) would modify the rules relating to the suspension of interest and certain penalties where the taxpayer is not contacted by the Internal Revenue Service within 18 months. 
  • S. 1595 sponsored by Sen. Maria Cantwell (D-WA) would provide for a 3-year recovery period for depreciation of qualified energy management devices. 
  • S. 1598 sponsored by Sen. Orrin Hatch (R-UT) would provide for a nonrefundable tax credit against income tax for individuals who purchase a residential safe storage device for the safe storage of firearms.

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