Daily Tax Update - February 07, 2005

President Submits $2.57 Trillion Fiscal Year 2006 Budget to Congress
Today, President Bush sent the 2006 fiscal year budget to Congress which proposes to cut discretionary domestic spending outside national security by 0.7 percent. The budget includes $1.3 trillion in tax cuts through 2014. The budget requests $10.679 billion for the Internal Revenue Service, which includes an additional $500 million for IRS enforcement activities, representing a 7.8 percent increase in enforcement funding over FY 2005. The Treasury Department’s budget invests $265 million in new initiatives designed to help bring about fairer and more efficient tax compliance at a lower cost, which includes providing additional audits, collection efforts, and tax fraud enforcement to increase revenue and promote compliance.

  • In the President’s overview of the budget, he said, "We must ensure that America remains the best place in the world to do business by keeping taxes low. . ."
  • Additional information on the budget can be accessed here.  

Treasury Department Releases 2005 "Blue Book"
Today, the Treasury Department released the "General Explanations of the Administration’s Fiscal Year 2006 Revenue Proposals" commonly referred to as the "Blue Book." The report covers proposals making permanent the tax cuts enacted in 2001 and 2003, closing loopholes, extending several expiring tax provisions, and improving tax compliance and administration. The report also discusses the Advisory Panel on Federal Tax Reform which is scheduled to release a report by July 31 detailing options to reform the tax code.

  • The document can be accessed here

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 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