Daily Tax Update - January 27, 2005

Joint Committee on Taxation Report Outlines Options to Improve Tax Compliance and Reform Tax Expenditures
Today, the Joint Committee on Taxation released a report which presents various options to reduce non compliance and reform tax expenditures by curtailing tax shelters, closing unintended loopholes, and addressing other areas of non compliance in present law. The report was prepared at the request of Senate Finance Committee Chairman Charles Grassley (R-IA) and ranking member Max Baucus (D-MT).

  • The report contains a proposal targeted specifically at tax shelter activity. According to the document, the proposal addresses these concerns by "requiring a higher level of judicial scrutiny only in the case of specific categories of uncommon transactions which have the characteristics of tax shelters."
  • In reaction to the report, Grassley said, "Its suggestions for possible ways to plug big leaks in tax compliance are important as we roll up our sleeves to deal with the deficit and address tax reform.  The Finance Committee passed into law a number of post-Enron recommendations from the Joint Tax Committee to shut down tax shelters.  These ideas plus our own work to go after abusive tax shelters recaptured more than $100 billion for the Treasury.  Today’s report will get the Finance Committee’s attention.  While we won’t embrace every recommendation, we’ll give the report a close look.  It’s a matter of credibility. Law-abiding taxpayers shouldn’t have to carry those who skirt the rules."
  • The document can be accessed here.   

Tax Bills Introduced January 26

  • H.R. 370 sponsored by Rep. Michael Bilirakis (R-FL) would allow taxpayers to designate that part or all of any income tax refund be paid over for use in biomedical research conducted through the National Institutes of Health.
  • H.R. 380 sponsored by Rep. Mark Foley (R-FL) would exclude from gross income certain hazard mitigation assistance.
  • H.R. 385 sponsored by Rep. Maurice Hinchey (D-NY) would allow a $1,000 refundable credit for individuals who are active members of volunteer firefighting and emergency medical service organizations.
  • H.R. 387 sponsored by Rep. Bobby Jindal (R-LA) would exclude disaster mitigation payments from gross income.
  • H.R. 399 sponsored by Rep. Tom Osborne (R-NE) would exclude from gross income interest received on loans secured by agricultural real property.
  • H.R. 401 sponsored by Rep. Ron Paul (R-TX) would make higher education more affordable by providing a full tax deduction for higher education expenses and interest on student loans.
  • H.R. 402 sponsored by Rep. Ron Paul (R-TX) would provide a tax credit for elementary and secondary school teachers.
  • H.R. 403 sponsored by Rep. Ron Paul (R-TX) would allow the Hope Scholarship Credit to be used for elementary and secondary expenses.
  • H.R. 404 sponsored by Rep. Ron Paul (R-TX) would allow a credit against income tax for amounts contributed to charitable organizations which provide elementary or secondary school scholarships and for contributions of, and for, instructional materials and materials for extracurricular activities.
  • H.R. 405 sponsored by Rep. Ron Paul (R-TX) would provide a tax credit for professional school personnel in grades kindergarten through grade 12.
  • H.R. 406 sponsored by Rep. Ron Paul (R-TX) would allow individuals a credit against income tax for tuition and related expenses for public and nonpublic elementary and secondary education.
  • H.R. 414 sponsored by Rep. Jim Ryun (R-KS) would allow a credit against income tax for the purchase of hearing aids.
  • H.R. 424 sponsored by Rep. Terry Lee (R-NE) would allow a credit against income tax for certain energy efficient property placed in service or installed in an existing principal residence or property used by businesses.
  • S. 171 sponsored by Sen. Lisa Murkowski (R-AK) would exempt seaplanes from certain transportation taxes.
  • S. 181 sponsored by Sen. John Ensign (R-NV) would allow a credit against income tax for taxpayers owning certain commercial power takeoff vehicles.
  • S. 196 sponsored by Sen. Byron Dorgan (D-ND) would provide for the taxation of income of controlled foreign corporations attributable to imported property.

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