Daily Tax Update - March 14, 2007

WAYS AND MEANS COMMITTEE HEARS TESTIMONY ON REVENUE RAISERS IN SENATE MINIMUM WAGE BILLToday, the House Ways and Means Committee heard from various private sector witnesses on the impact of several of the revenue raisers in the Senate-passed minimum wage bill.

  • The President of the Equipment Leasing and Finance Association testified that “The Senate proposal to make Section 470 retroactively applicable to transactions entered into prior to March 12, 2004, coupled with a current change in the GAAP treatment of leveraged leases, could have potentially significant adverse financial statement consequences to many U.S. corporations.”
  • The Vice President of Benefits from PepsiCo, Inc. discussed the executive compensation provisions.  His statement said, “Prior to any new legislation, we would like to see final guidance on current 409A regulations.  The impact of the recently enacted sweeping new reforms of 409A is still being absorbed by most companies.  Enacting new changes before we know how the current rules work seems premature.”
  • A representative on behalf of the Securities Industry and Financial Markets Association testified in opposition to Section 230 of the Senate-passed version of H.R. 2, which would “reverse settled law by changing the taxation of ‘contingent convertible’ debt instruments.”
  • The testimony can be accessed via: http://waysandmeans.house.gov/hearings.asp?formmode=detail&hearing=538

TAX BILLS INTRODUCED MARCH 13TH CAN BE ACCESSED VIA:
http://www.steptoe.com/assets/attachments/2902.pdf

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.