Daily Tax Update - April 14, 2008

SENATE MAKES COUNTEROFFER TO HOUSE FARM BILL:  On April 11, the Senate farm bill conferees released their $12.5 billion counteroffer to the House’s $5.5 billion proposal. The $7 billion difference in proposals is largely due to the Senate's addition of a $4 billion permanent agricultural disaster fund and $2.5 billion in tax incentives. According to Senate Finance Committee Chair Max Baucus, the House has already agreed to the additional farm spending. Baucus said, “In farm country, a handshake is your word, and the framework Senate conferees are sending to the House today reflects the agreement both sides made back in February for $10 billion in additional farm spending, including $4 billion for disaster assistance.” The two sides will meet again today to discuss the bill.

IRS OVERSIGHT BOARD RELEASES 2007 ANNUAL REPORT:  Today, the Internal Revenue Service Oversight Board released its Annual Report. The report concludes that the “IRS should not settle for good performance—it must set its sights on great performance.” Board Chairman Paul Cherecwich said, “The IRS has made enormous across-the-board improvements since the enactment of the IRS Restructuring and Reform Act of 1998. It has created a solid foundation upon which to build.” In the Board’s view, taking that important step will require increased management focus and “breakthrough” performances in four key areas: (1) taxpayer service, (2) enforcement, (3) human capital, and (4) information technology. Further, the report finds that for the IRS to take taxpayer service to the next level, it must do more than respond to taxpayer inquires. “It must understand taxpayers’ needs better through new research and implement education and outreach services tailored to the needs of specific groups of taxpayers.”

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 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.