Daily Tax Update - December 7, 2007

SENATE PASSES AMT PATCH WITHOUT OFFSETS, EXTENDERS:  Last night, the Senate passed a one-year fix to the alternative minimum tax by an 88-5 vote after Democrats dropped demands that the $50 billion cost of the provision be offset to meet the pay-as-you-go budget requirements. The Senate's action sets up a confrontation with the House. House Democratic leaders have said that they want a fully offset AMT provision that would meet pay/go rules. The House is expected to add offsets to the Senate package and send it back early next week.

  • Senate Finance Committee Chairman Max Baucus (D-MT) said, "Protecting working families from the alternative minimum tax is one of my top tax priorities this year. The legislation the Senate has now passed will keep millions of Americans from falling victim this year to a tax they were never meant to pay. And it remains my goal to repeal AMT altogether. I’m disappointed that the votes weren’t there to pay for this bill, but I’m not sorry for choosing to protect taxpayers from the AMT even at some cost. Too many folks are at risk of an unfair tax increase if Congress fails to act on the AMT. Now I plan to work with the House to end this drawn-out process on the AMT, and to get this tax relief signed into law as quickly as possible.”

TAX BILLS INTRODUCED DECEMBER 6TH:
H.R.4303: To amend the Internal Revenue Code of 1986 to exclude from gross income rewards received for information provided with respect to violations of Federal criminal law.
Sponsor: Rep Chabot, Steve [OH-1] (introduced 12/6/2007) Cosponsors (None)

 H.R.4306: To amend the Clean Air Act and the Internal Revenue Code of 1986 to increase the use of ethanol and bio-diesel, and for other purposes.
Sponsor: Rep King, Steve [IA-5] (introduced 12/6/2007) Cosponsors (1)

H.R.4312: To amend the Internal Revenue Code of 1986 to extend certain benefits applicable to the Gulf Opportunity Zone, and for other purposes.
Sponsor: Rep Baker, Richard H. [LA-6] (introduced 12/6/2007) Cosponsors (4)

H.R.4313: To amend the Internal Revenue Code of 1986 to allow an additional credit against income tax for the adoption of an older child.
Sponsor: Rep Bean, Melissa L. [IL-8] (introduced 12/6/2007) Cosponsors (11)

H.R.4318: To amend the Internal Revenue Code of 1986 to modify the penalty on the understatement of taxpayer's liability by tax return preparers.
Sponsor: Rep Crowley, Joseph [NY-7] (introduced 12/6/2007) Cosponsors (1)

H.R.4337: To amend the Internal Revenue Code of 1986 to allow individuals an above-the-line deduction for contributions made to the Armed Forces Relief Trust as part of filing their income tax returns.
Sponsor: Rep Shays, Christopher [CT-4] (introduced 12/6/2007) Cosponsors (6)

S.2421: A bill to amend the Internal Revenue Code of 1986 to provide tax benefits to individuals who have been wrongfully incarcerated.
Sponsor: Sen Schumer, Charles E. [NY] (introduced 12/6/2007) Cosponsors (1)  

S.2432: A bill to amend the Internal Revenue Code of 1986 to provide alternative minimum tax relief for 2007 and to provide special tax rates for certain capital grains and qualified dividend income for 2007, and for other purposes.
Sponsor: Sen Whitehouse, Sheldon [RI] (introduced 12/6/2007) Cosponsors (None)

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.