Daily Tax Update - July 11, 2008

SENATE EXPECTED TO PASS HOUSING STIMULUS BILL SOON:  Yesterday, the Senate invoked cloture on its housing stimulus bill which contains $14 billion in tax incentives and includes a refundable tax credit for first-time home buyers. Offsets would come from information reporting for payment card and third-party network transactions, denial of excludable gains from the sale of a primary residence for periods in which the home was not used as a primary residence, and imposition of or increases in several failure-to-file penalties.

SENATE COMMITTEE HOLDS HEARING ON TAX TREATIES:  Yesterday, the Senate Foreign Relations Committee held a hearing on three major US tax treaties--accords with Canada, Iceland, and Bulgaria. Because there were eleven different treaties on the agenda, only approximately a third of the hour-and-a-half hearing was spent discussing the tax treaties, although much of the discussion that was devoted to tax treaties centered on the US-Canada protocol. The discussions of the protocol mainly concerned the binding arbitration provision and the services PE provision.

TAX BILLS INTRODUCED JULY 10TH:

S.3243: A bill to amend the Internal Revenue Code of 1986 to allow expenses relating to all home schools to be qualified education expenses for purposes of a Coverdell education savings account.
Sponsor: Sen Vitter, David [LA] (introduced 7/10/2008)      Cosponsors (1)

S.3244: A bill to amend the Internal Revenue Code of 1986 to expand the Coverdell education savings accounts to allow home school education expenses, and for other purposes.
Sponsor: Sen Vitter, David [LA] (introduced 7/10/2008)      Cosponsors (None)

S.3246: A bill to amend the Internal Revenue Code of 1986 to allow the Secretary of the Treasury to set the standard mileage rate for use of a passenger automobile for purposes of the charitable contributions deduction.
Sponsor: Sen Cardin, Benjamin L. [MD] (introduced 7/10/2008)      Cosponsors (2) 

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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