Daily Tax Update - June 22, 2005

ADMINISTRATION REITERATES SUPPORT FOR $284 BILLION HIGHWAY BILL:
During a meeting yesterday with Senate Republicans at the White House, President Bush again expressed support for the level of funding for the highway reauthorization bill as passed by the House. White House press spokesperson Scott McClellan said, "Our commitment continues to be to the level of $284 billion." Earlier this week, the Senate highway conferees proposed an offer of $290 billion.

  • The House is expected to formally respond to the Senate offer later this week.

DELAY SAYS TAX REFORM ON TRACK FOR 2006:
House Majority Leader Tom DeLay (R-TX) said yesterday that efforts to reform the tax code were on schedule for 2006. The tax reform commission was recently given a two-month extension until September 30th to submit their recommendations to the Treasury Department.

  • DeLay said, "We cannot put it off. I’m glad to see the tax reform commission is being serious about what they may recommend." DeLay said that he had talked with the tax reform commission’s chairman and vice chairman. DeLay added, "I asked them not to assume what we can or cannot do in making their decision. Keep an open mind and don't be afraid of being bold."
  • Sen. Jon Kyl (R-AZ) said yesterday, "[T]hat it's probably better to try to do it next year, and if you can't get it completed next year, it doesn't bother me to have an election cycle intervene."

TAX BILLS INTRODUCED JUNE 21:

  • H.R. 3012 sponsored by Rep. Robert Andrews (D-NJ) would exclude from gross income health care subsidy payments made to employers by local governments on behalf of volunteer firefighters.
  • H.R. 3019 sponsored by Rep. Jim Ramstad (R-MN) would permit the consolidation of life insurance companies with other companies.

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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