Daily Tax Update - December 02, 2005

HOUSE EXPECTED TO PASS TAX BILL NEXT WEEK:
On December 5, the House will return from its two-week Thanksgiving recess and is expected to approve its $56 billion tax bill sometime next week. The Senate will not return until December 12. The Senate tax bill includes temporary protections from the individual alternative minimum tax that are not included in the House bill. The Senate bill does not include an extension of the capital gains and dividend tax cut that is expected to remain in the House version. The Senate bill also contains numerous revenue raisers that are not included in the House bill, including a provision codifying the economic substance doctrine. Given the short time frame Congress is in session before adjourning for the year, it is questionable whether Senate and House negotiators can resolve their differences in conference before Congress adjourns in mid-December.

IRS WARNS AGAINST TAX REFUND IDENTITY THEFT E-MAIL SCAM:
This week, the IRS issued an alert about an  Internet scam in which consumers receive an e-mail claiming to be from the IRS informing them of a tax refund. The bogus IRS email then directs the consumer to a link that requests personal information, such as Social Security number and credit card information. This practice is called "phishing" for information.

  • The bogus IRS e-mail comes from the email address "tax refunds@irs.gov." The IRS stated that it does not ask for personal identifying or financial information via unsolicited e-mail. Additionally, taxpayers do not have to complete a special form to obtain a refund.
  • According to the IRS, if you receive an unsolicited e-mail purporting to be from the IRS, you should take the following steps:
    • Do not open any attachments to the e-mail, in case they contain malicious code that will infect your computer.
    • Contact the IRS at 1-800-829-1040 to determine whether the IRS is trying to contact you about a tax refund.

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