Daily Tax Update - April 19, 2007

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HOUSE DEMOCRATS CONSIDER AMT REFORM:  House Democrats are considering an alternative minimum tax (AMT) reform plan that would raise income tax rates on the wealthiest Americans as part of a plan to pay for eliminating the AMT for middle-income taxpayers.

  • Democratic Ways and Means Committee members met on April 18 to discuss options for a long-term AMT fix, in a discussion led by Select Revenue Subcommittee Chairman Richard Neal (D-MA).  One option being discussed would shield families with incomes of less than $250,000 from the tax altogether.  Families with income between $250,000 and $500,000 would be subject to AMT, but with less AMT liability than under current law.  The tax rollback for middle-income taxpayers would be financed by raising regular income tax rates on taxpayers earning $1 million or more.
  • Republicans say they will oppose any AMT fix that is paid for by increasing taxes.  "It's a bad tax -- they've got an opportunity to repeal it.  They know that it's an expensive repeal, but to raise the tax rates is a tax increase," Rep. Thomas Reynolds (R-NY) said yesterday. "The fact is that we need to look at finding a solution that does permanent repeal, not just some sort of gimmick that takes some few people and relieves it while the rest of the middle class takes a hit."
  • House Ways and Means Committee ranking minority member Jim McCrery (R-LA) said April 18 that the current focus on reform of the AMT offers an opportunity to examine fundamental tax reform.  "What I suggested to the chairman was that since repeal of the AMT would cost close to $1 trillion over 10 years, it would seem to me that that would be the perfect opportunity to examine broader tax reform, which could include going to a different form of taxation like a flat tax or like a consumption tax of some sort," McCrery said.

TAX BILLS INTRODUCED APRIL 18:
H.RES.317: Providing for consideration of the bill (H.R. 1905) to provide for the treatment of the District of Columbia as a Congressional district for purposes of representation in the House of Representatives, and for other purposes and providing for consideration of the bill (H.R. 1906) to amend the Internal Revenue Code of 1986 to adjust the estimated tax payment safe harbor based on income for the preceding year in the case of individuals with adjusted gross income greater that $5 million.
Sponsor: Rep Arcuri, Michael A. [NY-24] (introduced 4/18/2007)      Cosponsors (None)
Committees: House Rules
House Reports: 110-98
Latest Major Action: 4/18/2007 Placed on the House Calendar, Calendar No. 39.

H.R.1906: To amend the Internal Revenue Code of 1986 to adjust the estimated tax payment safe harbor based on income for the preceding year in the case of individuals with adjusted gross income greater than $5 million.
Sponsor: Rep Norton, Eleanor Holmes [DC] (introduced 4/18/2007)      Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 4/18/2007 Rules Committee Resolution H. Res. 317 Reported to House. Rule provides for consideration of H.R. 1905 and H.R. 1906. With respect to H.R. 1905, all points of order against the bill and against its consideration are waived except those arising under clause 9 or 10 of rule XXI. The bill shall be considered as read. The bill is closed to amendments and shall be considered in the House. With respect to H.R. 1906, all points of order against the bill and against its consideration are waived except those arising under clause 9 or 10 of rule XXI. The bill shall be considered as read. The bill is closed to amendments and shall be considered in the House.

H.R.1921: To affirm the religious freedom of taxpayers who are conscientiously opposed to participation in war, to provide that the income, estate, or gift tax payments of such taxpayers be used for nonmilitary purposes, to create the Religious Freedom Peace Tax Fund to receive such tax payments, to improve revenue collection, and for other purposes.
Sponsor: Rep Lewis, John [GA-5] (introduced 4/18/2007)      Cosponsors (16)
Committees: House Ways and Means
Latest Major Action: 4/18/2007 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

H.R.1923: To amend the Internal Revenue Code of 1986 to modify the exemption amount for the alternative minimum tax.
Sponsor: Rep McCarthy, Kevin [CA-22] (introduced 4/18/2007)      Cosponsors (None)
Committees: House Ways and Means
Latest Major Action
: 4/18/2007 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

H.R.1924: To amend the Internal Revenue Code of 1986 to provide credit rate parity for all renewable resources under the electricity production credit.
Sponsor: Rep Meek, Kendrick B. [FL-17] (introduced 4/18/2007)      Cosponsors (1)
Committees: House Ways and Means
Latest Major Action: 4/18/2007 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

H.R.1929: To amend the Internal Revenue Code of 1986 to exempt certain farmland from the estate tax.
Sponsor: Rep Salazar, John T. [CO-3] (introduced 4/18/2007)      Cosponsors (2)
Committees: House Ways and Means
Latest Major Action: 4/18/2007 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

S.1140: A bill to amend the Internal Revenue Code of 1986 to eliminate the limitation on the foreign earned income exclusion, and for other purposes.
Sponsor: Sen DeMint, Jim [SC] (introduced 4/18/2007)      Cosponsors (None)
Committees: Senate Finance
Latest Major Action: 4/18/2007 Referred to Senate committee. Status: Read twice and referred to the Committee on Finance.

S.1141: A bill to amend the Internal Revenue Code of 1986 to allow employees not covered by qualified retirement plans to save for retirement through automatic payroll deposit IRAs, to facilitate similar saving by the self-employed, and for other purposes.
Sponsor: Sen Bingaman, Jeff [NM] (introduced 4/18/2007)      Cosponsors (4)
Committees: Senate Finance
Latest Major Action: 4/18/2007 Referred to Senate committee. Status: Read twice and referred to the Committee on Finance.

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.

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