Daily Tax Update - June 10, 2005

BAUCUS FLOATS COMPROMISE OFFER ON HIGHWAYFUNDINGBILL:
Yesterday, Ranking Finance Committee member Max Baucus (D-MT) suggested that the House and Senate highway conferees agree to an amount of $290 billion. Baucus said, "The House is at $284 billion in funding and the Senate is at $295 billion.  We know where we are going to be at the end of the day:  in the middle.  We are going to split the difference -- $290 billion.  Why wait to make that decision?  I am asking my colleagues to put differences aside, work together, and get this bill done."

  • Finance Committee Chairman Charles Grassley (R-IA) concurred that a compromise was necessary in order to complete the conference. Grassley said, "At the end of the day, of course we all know that each side needs some compromise. I believe strongly in some of these provisions -- particularly those related to fuel fraud compliance. These provisions do create new tax revenue for the trust fund."
  • However, House Majority Leader Tom DeLay (R-TX) appeared less agreeable to a compromise. DeLay said, "It's not as simple as some have said."
  • The conferees will continue their deliberations next week.

TAX BILLS INTRODUCED JUNE 9:

  • H.R. 2830 sponsored by Rep. John Boehner (R-OH) would reform the pension funding rules.
  • H.R 2831 sponsored by Rep. John Boehner (R-OH) would make improvements in benefit accrual standards.
  • H.R. 2835 sponsored by Rep. George Miller (D-CA) would improve recruitment, preparation, distribution, and retention of public elementary and secondary school teachers and principals.
  • S. 1213 sponsored by Sen. Debbie Stabenow (D-MI) would allow a refundable credit against income tax for the purchase of a principal residence by a first-time homebuyer.
  • S. 1218 sponsored by Sen. Edward Kennedy (D-MA) would improve recruitment, preparation, distribution, and retention of public elementary and secondary school teachers and principals.
  • S. 1266 sponsored by Sen. Ted Stevens (R-AK) would reinstate the Oil Spill Liability Trust Fund tax and maintain a balance of $3 billion in the Oil Spill Liability Trust Fund.

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
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