Daily Tax Update - July 2, 2008

THE DAILY TAX UPDATE WILL BE PUBLISHED ON A PERIODIC BASIS UNTIL CONGRESS RETURNS ON JULY 8TH

STEPTOE & JOHNSON LLP ATTORNEYS REQUEST WITHDRAWAL AND REPLACEMENT OF GUIDANCE ON INTERMEDIARY TRANSACTIONS:  In a July 1 letter to Treasury and the IRS, Steptoe & Johnson LLP tax attorneys Mark J. Silverman and Keith Sieverding requested that Treasury and the IRS withdraw and replace Notice 2008-20. Notice 2008-20 provides guidance on whether a transaction will be the same as or substantially similar to the listed transaction described in Notice 2001-16 (an “Intermediary Transaction”). The letter observes that Notice 2008-20 proceeds from erroneous assumptions regarding the knowledge of participants, applies to the most basic stock and asset transactions, and requires tax advisors to issue burdensome covered opinions that clients never requested and do not want to pay for. Accordingly, the letter requests that Treasury and the IRS withdraw Notice 2008-20 and adopt a new approach for identifying Intermediary Transactions. The letter also sets forth several suggested alternatives and also suggests specific changes in the event Notice 2008-20 is not withdrawn.  

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.