Daily Tax Update - July 21, 2005

HIGHWAY CONFEREES STALLED AGAIN:
Yesterday, House and Senate highway conferees cancelled their scheduled meeting suggesting the necessity of yet another short term extension to fund highway programs. The conferees have yet to reach a compromise on a formula for distributing federal highway aid to states as well as other transit policy issues. The latest extension expires at midnight tonight.

PENSION REFORM BILL TO BE INTRODUCED TOMORROW:
On July 22, Senate Finance Committee Chairman Charles Grassley (R-IA) and ranking member Max Baucus (D-MT) will introduce comprehensive pension funding and reform legislation.

  • According to the Committee, "The wide-ranging pension bill will build upon the legislation that Grassley and Baucus re-introduced in January. That bill, the National Employee Savings and Trust Equity Guarantee (NESTEG) Act, contains a series of worker pension protections developed after the Enron debacle and reforms to ensure much more adequate, reliable pension funding. The bill expands protections for retirement plan participants and requires companies to allow their employees to diversify out of company stock, adopts a permanent yield curve replacement for the 30-year Treasury rate used for pension funding purposes, expands the portability of retirement plan assets, and simplifies pension laws and regulation. The newly revised version of NESTEG – to be released Friday – further develops these proposals."

TAX REFORM PANEL TO RECOMMEND INDIVIDUAL AMT REPEAL:
Yesterday, President Bush’s tax reform panel indicated in a public hearing that it would recommend repeal of the individual AMT. The panel did not suggest any potential recommendations to pay for AMT repeal, nor did it indicate any conclusions with respect to the corporate AMT. Panel chairman Connie Mack said, ""We didn’t end up with a consensus on the corporate side even though I think it’s fair to say that all panel members felt the corporate AMT was really not an effective way to tax, but they want to address that in discussions about how to deal with overall corporate taxes."

TAX BILLS INTRODUCED JULY 20:

  • H.R. 3360 sponsored by Rep. Jim Nussle (R-IA) would enhance tax incentives for small property and casualty insurance companies.
  • H.R. 3367 sponsored by Rep. Kenny Hulshof (R-MO) would include wireless telecommunications equipment in the definition of qualified technological equipment for purposes of determining the depreciation treatment of such equipment.

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

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