Daily Tax Update - August 22, 2007

THE DAILY TAX UPDATE WILL BE PUBLISHED ON A PERIODIC BASIS UNTIL CONGRESS RETURNS ON SEPTEMBER 4TH

LAW FIRMS SEEK ONE-YEAR DELAY OF DEADLINE FOR SECTION 409A COMPLIANCE:  On August 21st, a group of 92 law firms, including Steptoe & Johnson LLP, sent a letter to Internal Revenue Service Acting Commissioner Kevin Brown requesting an extension of the December 31, 2007 deadline for compliance with IRC section 409A, to December 31, 2008.

  • The firms argued that the period until the current deadline is not sufficient to ensure both thorough compliance with section 409A and appropriate analysis by taxpayers of the issues raised by the required amendments.  The letter added that “attempted compliance with the deadline is imposing an undue strain on resources and administrative burdens on our clients and their service providers (including attorneys, actuaries, compensation consultants, accountants and record keepers).”
  • The firms requested that all transition relief currently scheduled to expire this year be extended to December 31, 2008, and that the applicability of the final regulations under section 409A be changed to January 1, 2009.
  • For additional information, contact  Catherine W. Wilkinson - cwilkinson@steptoe.com, Anne E. Moranamoran@steptoe.com, Don Wellington - dwellington@steptoe.com, or Ellen Kohnekohn@steptoe.com.
  • The letter can be accessed via: http://www.steptoe.com/attachment.html/3128.pdf

STEPHEN LARSON NAMED ACTING ASSOCIATE CHIEF COUNSEL, FINANCIAL INSTITUTIONS AND PRODUCTS:  Today, the IRS announced the assignment of Stephen Larson, former Acting General Counsel of the Treasury Department, to the position of Acting Associate Chief Counsel, Financial Institutions and Products.  Larson will replace Lon Smith, who was reassigned to the position of National Counsel to the Chief Counsel for Special Projects.

TRANSFER PRICING DOCUMENTATION DEADLINE ON SEPTEMBER 15, 2007 FOR CALENDAR YEAR TAXPAYERS:  To avoid penalties, taxpayers should have appropriate documentation of their transfer pricing methodologies and results by the time they file their tax returns.  For calendar year taxpayers, this means that the documentation must be completed by September 15.  IRS agents have been instructed to look critically at this documentation, so companies may want to reconsider the standards they have used in the past for determining whether their documentation is rigorous and specific enough.  Steptoe's transfer pricing group is available and particularly well-situated to assist with that work.  Click here for more information

STEPTOE’S UK AUGUST 2007 TAX LAW UPDATE CAN BE ACCESSED VIA:
http://www.steptoe.com/assets/attachments/3109.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.