Daily Tax Update - February 28, 2008

WAYS AND MEANS SUBCOMMITTEE SCHEDULES HEARING ON TAX TREATMENT OF DERIVATIVES: On March 5, the House Ways and Means Select Revenue Measures will hold a hearing on the tax treatment of certain derivatives. The hearing will examine whether there is a need for more uniform tax treatment for various derivative structures.

  • In announcing the hearing, Subcommittee Chairman Neal stated, “The expanding derivatives market is already a $516 trillion global enterprise, only some of which is subject to regulation and transparency. I think it is appropriate for Congress to review the tax rules as they apply to these complex financial products and determine whether changes may be necessary.”

IRS TO BEGIN MAILING SPECIAL ECONOMIC STIMULUS LETTERS IN MARCH:  Today, the IRS said that it would start mailing letters the first week in March to more than 130 million American households, reminding taxpayers to file a 2007 tax return so they can receive a 2008 economic stimulus payment. The informational notice, titled Economic Stimulus Payment Notice, alerts people that they may be eligible for a one-time stimulus payment of up to $600 ($1,200 married filing jointly) starting in May. There also is a $300 per child payment for qualifying children younger than 17.

  • The IRS stated, “To receive a payment in 2008, individuals who qualify will not have to do anything more than file a 2007 tax return. The IRS will determine eligibility, figure the amount and send the payment. This payment should not be confused with any 2007 income tax refund that is owed to you by the federal government. Income tax refunds for 2007 will be made separately from this one-time payment.”
  • Additional information can be accessed via: http://www.ustreas.gov/press/releases/reports/economic%20stimulus%20payment%20notice.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.