Daily Tax Update - April 26, 2007

AMT PROPOSAL EXPECTED TO BE CONSIDERED BY HOUSE AROUND MEMORIAL DAY:  Yesterday, House Ways and Means Committee Chairman Charles Rangel (D-NY) said that the Committee’s long-term proposal to prevent the alternative minimum tax's spread into the middle class will likely be considered on the House floor around Memorial Day.  Rangel was not specific about timing, stating: "May or June.  If we don't get it done before the recess, immediately after."

  • The proposal is expected to exempt families with income less than $250,000 from the AMT, while families with income above that amount would pay some AMT, and families with income above $500,000 would shoulder most of the cost.

SENATE PASSES SUPPLEMENTAL WAR SPENDING BILL WITH TAX PROVISIONS: Today, the Senate approved a $124.2 billion emergency war supplemental spending measure (H.R. 1591) that includes nearly $5 billion in small business tax breaks intended to ease the burden of an accompanying minimum wage increase.  The House approved the bill yesterday. However, the bill is likely to be vetoed by President Bush because of language regarding troop withdrawal from Iraq.

TELECONFERENCE ON 409A REGULATIONS:  On May 1, 2007, Steptoe & Johnson LLP will host a free teleconference from 2:00 - 3:30 p.m. EDT on the recent 409A regulations.  These regulations potentially affect all employers’ deferred compensation, equity, severance, change of control, and supplemental pension plans, and employment agreements.  The teleconference is hosted by Steptoe’s employee benefits’ tax partners, Anne Moran and Don Wellington, and features guest speakers Dan Hogans, Attorney Advisor, Office of Benefits Tax Counsel at the US Treasury Department, and Cheryl Harwick of Marathon Oil.  This timely teleconference will cover compliance with key problem areas, and strategies for the final months of the transition period.  Please click here for additional details and registration.  Virginia CLE application is pending.

H.R. 2039: To amend the Internal Revenue Code of 1986 to modify the alternative fuel vehicle refueling property credit.
Sponsor: Rep Levin, Sander M. [MI-12] (introduced 4/25/2007)      Cosponsors (None)

S. 1207: A bill to amend the Internal Revenue Code of 1986 to increase and extend the energy efficient commercial buildings deduction.
Sponsor: Sen. Landrieu, Mary L. [LA] (introduced 4/25/2007)      Cosponsors (None)

S. 1214: A bill to amend the Internal Revenue Code of 1986 to modify the partial exclusion for gain from certain small business stocks.
Sponsor: Sen. Kerry, John F. [MA] (introduced 4/25/2007)      Cosponsors (1)

S. 1219: A bill to amend the Internal Revenue Code of 1986 to provide taxpayer protection and assistance, and for other purposes.
Sponsor: Sen. Bingaman, Jeff [NM] (introduced 4/25/2007)      Cosponsors (5)

S. 1220: A bill to increase the standard mileage rate for use of an automobile for business, medical, and moving deduction purposes for 2007 and permanently increase such rate for charitable deduction purposes under the Internal Revenue Code of 1986 and to temporarily increase the reimbursement rate for use of an automobile by Federal employees.
Sponsor: Sen. Schumer, Charles E. [NY]

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.