Daily Tax Update - February 14, 2008

HOUSE FARM BILL CONFEREES’ PROPOSAL CUTS TAX PROVISIONS – SENATE TO PROPOSE COUNTEROFFER:  The House conferees to the farm bill sent a new proposal to the Senate yesterday. Their proposal cost less than the earlier House plan, thereby allowing lawmakers to strike controversial tax provisions such as the economic substance codification provision. President Bush has threatened to veto the farm bill if it includes any tax increases.

  • House Agriculture Committee Chairman Collin Peterson (D-MN) said, “There will not be tax increases in this bill or we would not agree to it when it's finalized. There are a number of ways this can be paid for without having a tax increase.” 
  • However, Senators said that they expected to offer a more expensive counterproposal. Senate Finance Committee ranking member Charles Grassley (R-IA) said, “I’ll just say that we’re going to have a lot more money for our plan.” House and Senate farm bill negotiators will continue their discussions later today.

IRS SAYS IT IS SUCCESSFULLY PROCESSING TAX FORMS AFFECTGED BY AMT PATCH:  Today, the IRS said it is now processing five tax forms affected by legislation involving the Alternative Minimum Tax (AMT). The affected forms are:

  • Form 8863, Education Credits
  • Form 5695, Residential Energy Credits
  • Schedule 2, Form 1040A, Child and Dependent Care Expenses for Form 1040A Filers;
  • Form 8396, Mortgage Interest Credit
  • Form 8859, District of Columbia First-Time Homebuyer Credit

TAX BILL INTRODUCED FEBRUARY 13TH:
S.2628: A bill to amend the Internal Revenue Code of 1986 to treat income earned by mutual funds from exchange-traded funds holding precious metal bullion as qualifying income.
Sponsor: Sen Ensign, John [NV] (introduced 2/13/2008)      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
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