Daily Tax Update - February 6, 2007

IRS RELEASES 2004 CORPORATION SOURCE BOOK: The IRS Statistics of Income Division has released the 2004 Corporation Source Book. The Corporation Source Book presents balance sheet, income statement, tax, and other selected items by size of total assets for all returns with and without net income. Statistical tables are available by industrial sectors, major groups within a sector, and minor industries within a major group.

IRS BEGINS PROCESSING TAX RETURNS CLAIMING EXTENDER DEDUCTIONS: Today, the IRS started processing returns for tax provisions renewed by legislation enacted in December. While taxpayers using software will fill out their returns as normal, taxpayers claiming the extender provisions on paper returns will have to take certain steps. Because the extender legislation was enacted after the new tax forms went to print last year, separate lines for the affected deductions were omitted from 2006 individual income tax forms. For that reason, people filling out a paper return must use existing lines on the current Form 1040 and Schedule A to claim the three major extenders provisions (state and local general sales tax deduction, higher education tuition and fees deduction, and the educator expense adjustment to income).

TAX BILLS INTRODUCED FEBRUARY 5TH CAN BE ACCESSED VIA: http://www.steptoe.com/assets/attachments/2843.pdf

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.