Daily Tax Update - June 27, 2007

FINANCE HEARS TESTIMONY ON AMT REFORM OPTIONS: Today, the Senate Finance Committee held a hearing on the alternative minimum tax.  Committee Chairman Max Baucus (D-MT) said that a short-term AMT "patch" would move this year but "not right away."

  • Ranking member Charles Grassley (R-IA) announced plans to introduce legislation that would provide taxpayers a “safe harbor from being punished for the fact that Congress has failed to deal with the AMT.”  Grassley said, “Under my proposal, in computing tax for purposes of the penalties in the tax code dealing with estimated tax, a taxpayer would be permitted to disregard the alternative minimum tax if the individual was not liable for the alternative minimum tax for the preceding tax year.  So if you didn’t have to pay AMT last year we aren’t going to penalize you if you don’t file estimated taxes for AMT this year.”

UK-SWITZERLAND: PROTOCOL TO THE DOUBLE TAXATION CONVENTION:  A Protocol amending the current Double Taxation Convention between the United Kingdom and Switzerland has been signed in London.  It will enter into force once both states have completed their legislative procedures.

UK-THE FAROE ISLANDS: DOUBLE TAXATION CONVENTION:  A Double Taxation convention between the United Kingdom and the Faroe Islands has been signed in London.  It will enter into force once both parties have completed their legislative procedures. 

TAX BILLS INTRODUCED JUNE 26TH:
H.R. 2873: To amend the Internal Revenue Code of 1986 to exempt disaster relief distributions from retirement plans from the penalty for early withdrawal.
Sponsor: Rep. Weldon, Dave [FL-15] (introduced 6/26/2007)      Cosponsors (11)

S. 1697: A bill to amend the Internal Revenue Code of 1986 to provide a credit for residential biomass fuel property expenditures.
Sponsor: Sen. Sununu, John E. [NH] (introduced 6/26/2007)

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
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