Daily Tax Update - February 09, 2005

IRS: $2 Billion in Unclaimed Refunds Await 2001 Non- Filers
The IRS has announced that unclaimed refunds totaling more than $2 billion are awaiting about 1.7 million people who failed to file an income tax return for 2001. However, in order to collect the money, a return must be filed with the IRS no later than April 15, 2005. The IRS estimates that half of those who could claim refunds would receive more than $484. The IRS reminded taxpayers seeking a 2001 refund that their checks would be held if they have not filed tax returns for 2002 or 2003.

  • IRS Commissioner Mark Everson said, "The window is closing for 2001 refunds. As soon as you send us your tax return, you’ll get your money. But if you don’t file, you won’t get anything."
  • Additional information can be accessed here.  

Tax Bills Introduced February 8:

  • H.R. 614 sponsored by Rep. Mike McIntyre (D-NC) would provide tax incentives and job training grants for communities affected by the migration of businesses and jobs to Canada or Mexico as a result of the North American Free Trade Agreement.
  • H.R. 621 sponsored by Rep. Bob Beauprez (R-CO) would allow penalty-free withdrawals from retirement plans during the period that a military reservist or national guardsman is called to active duty for an extended period.
  • H.R. 625 sponsored by Rep. Dave Camp (R-MI) would allow the Hope Scholarship Credit to cover fees, books, supplies, and equipment and exempt Federal Pell Grants and Federal supplemental educational opportunity grants from reducing expenses taken into account for the Hope Scholarship Credit.
  • H.R. 626 sponsored by Rep. Dave Camp (R-MI) would provide tax incentives for the production of alternative fuel vehicles.
  • H.R. 629 sponsored by Rep. Eni Faleomavaega (D-AS) would extend the possession tax credit with respect to American Samoa an additional 10 years.
  • H.R. 651 sponsored by Rep. Steve King (R-IA) would make improvements to assist young farmers and ranchers.
  • H.R. 652 sponsored by Rep. Ron Lewis (R-KY) would allow a credit against income tax for taxpayers owning certain commercial power takeoff vehicles.
  • H.R. 658 sponsored by Rep. Joseph Pitts (R-PA) would exclude from gross income gain on the sale or exchange of farmland development rights.
  • H.R. 659 sponsored by Rep. Rob Portman (R-OH) would modify the rehabilitation credit and the low-income housing credit.
  • S. 309 sponsored by Sen. Jim DeMint (R-SC) would provide for the disposition of unused health benefits in cafeteria plans and flexible spending arrangements. 
  • S. 315 sponsored by Sen. Russell Feingold (D-WI) would provide that reimbursements for costs of using passenger automobiles for charitable and other organizations are excluded from gross income.

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