Daily Tax Update - March 11, 2005

HOUSE AND SENATE TO ACT ON FY 2006 BUDGET RESOLUTIONS:
Next week, the House and Senate will vote on their Fiscal Year 2006 budget resolutions. The House Budget provides $106 billion of tax relief over five years, including $45 billion to be protected under reconciliation instructions. Although the House Ways and Means Committee will determine which specific tax cuts will fall under reconciliation protection, it is expected that $42 billion will be for expiring tax provisions passed in 2001 and 2003.

  • The Senate Budget Committee's version provides $70 billion in reconciliation instructions for tax cuts.

TAX BILLS INTRODUCED MARCH 10:

  • H.R. 1212 sponsored by Rep. Jerry Weller (R-IL) would provide tax credits for making energy efficiency improvements to existing homes and for constructing new energy efficient homes.
  • H.R. 1231 sponsored by Rep. Tom Cole (R-OK) would restore and make permanent the exclusion from gross income for amounts received under qualified group legal services plans and to repeal the limitation on the amount of the exclusion.
  • H.R. 1234 sponsored by Rep. Lloyd Doggett (D-TX) require greater transparency of corporate tax accounting measures, facilitate analysis of financial statements, permit inspection of true corporate tax liability and understand the tax strategies undertaken by corporations, discourage abusive tax sheltering activities, and restore investor confidence in publicly traded corporations.
  • H.R. 1241 sponsored by Rep. Peter Hoekstra (R-MI) would provide a shorter recovery period for the depreciation of certain systems installed in nonresidential buildings.
  • H.R. 1255 sponsored by Rep. Collin Peterson (D-MN) would extend the tax incentives for biodiesel.
  • H.R. 1258 sponsored by Rep. Jim Ramstad (R-MN) would provide parity with respect to substance abuse treatment benefits under group health plans and health insurance coverage.
  • S. 595 sponsored by Sen. Rick Santorum (R-PA) would modify the work opportunity credit and the welfare-to-work credit.
  • S. 601 sponsored by Sen. Kent Conrad (D-ND) would include combat pay in determining an allowable contribution to an individual retirement plan.

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