Daily Tax Update - July 25, 2008

BAUCUS INTRODUCES NEW EXTENDERS, AMT BILL:  Yesterday, Senate Finance Committee Chairman Max Baucus introduced the “Jobs, Energy, Families and Disaster Relief Act of 2008” (S. 3335). Baucus is expected to offer his new extenders and AMT bill next week as a substitute amendment to the House-passed extenders bill (H.R. 6049), if Democrats can overcome an expected Republican filibuster. The new bill also contains disaster relief for Midwest flood victims and provisions to improve transportation and domestic fuel security and energy and conservation efficiency.

  • Baucus’ one-year AMT patch increases the exemption amounts to $46,200 (individuals) and $69,950 (married filing jointly) for 2008. The proposal would also allow the personal credits against the AMT.
  • The bill includes $54 billion in offsets, including a provision that would change the tax treatment of deferred compensation paid by managers of offshore hedge funds; a provision that would delay for 10 years, until 2019, the implementation of the worldwide interest allocation rule; and a provision that would mandate basis reporting by brokers for transactions involving publicly traded securities.
  • Additional information on the bill can be accessed here

SENATE INVOKES CLOTURE ON HOUSING STIMULUS BILL: Today, the Senate voted to limit debate on the housing stimulus bill (H.R. 3221). A vote on final passage is expected later this weekend. The President has indicated that he will sign the bill.

ARIZONA TAX UPDATE - THE ACTION MARINE CASE AND PERSONAL LIABILITY OF DIRECTORS AND SHAREHOLDERS FOR THE UNPAID SALES TAX LIABILITY OF THE CORPORATION: The Arizona Supreme Court recently held in the Action Marine case that the Arizona Department of Revenue may hold officers and directors of a corporation personally liable for the State transaction privilege (sales) tax when the corporation separately states the tax on its sales invoice or other sales document and collects the tax from its customers but does not remit the money collected to the Department of Revenue.

  • To read more about personal liability of officers and shareholders for the corporation’s sales tax and the Action Marine case, please click here.
  • For additional information, please contact Pat Derdenger at pderdenger@steptoe.com.

TAX BILLS INTRODUCED JULY 24th:
H.R.6595: To amend the Internal Revenue Code of 1986 to provide middle class tax relief while closing tax loopholes, and for other purposes.
Sponsor: Rep Walz, Timothy J. [MN-1] (introduced 7/24/2008)      Cosponsors (3)

H.R.6601: To amend the Internal Revenue Code of 1986 to simplify the deduction for business use of the home and to make other changes affecting small businesses.
Sponsor: Rep Velazquez, Nydia M. [NY-12] (introduced 7/24/2008)      Cosponsors (None)

H.R.6603: To amend the Social Security Act and the Internal Revenue Code of 1986 to exempt certain employment as a member of a local governing board, commission, or committee from Social Security tax coverage.
Sponsor: Rep Pomeroy, Earl [ND] (introduced 7/24/2008)      Cosponsors (3)

H.R.6605: To amend the Internal Revenue Code to provide for a refundable tax credit for heating fuels and to create a grant program for States to provide individuals with loans to weatherize their homes.
Sponsor: Rep Allen, Thomas H. [ME-1] (introduced 7/24/2008)      Cosponsors (8)

H.R.6609: To amend the Internal Revenue Code of 1986 to provide for recovery rebates for certain pension recipients.
Sponsor: Rep Brady, Kevin [TX-8] (introduced 7/24/2008)      Cosponsors (1)

H.R.6611: To amend the Internal Revenue Code of 1986 to make the research credit permanent, increase expensing for small businesses, reduce corporate tax rates, and for other purposes.
Sponsor: Rep Carney, Christopher P. [PA-10] (introduced 7/24/2008)      Cosponsors (1)

H.R.6612: To amend the Internal Revenue Code of 1986 to increase and make permanent the election to expense certain refineries.
Sponsor: Rep Cazayoux, Donald J., Jr. [LA-6] (introduced 7/24/2008)      Cosponsors (2)

H.R.6614: To amend the Internal Revenue Code of 1986 to repeal the limitation on the amount of foreign earned income excludible from gross income by citizens or residents of the United States living abroad, and for other purposes.
Sponsor: Rep Garrett, Scott [NJ-5] (introduced 7/24/2008)      Cosponsors (10)

S.3330: A bill to amend the Internal Revenue Code of 1986 to modify the deduction for domestic production activities for film and television productions, and for other purposes.
Sponsor: Sen Feinstein, Dianne [CA] (introduced 7/24/2008)      Cosponsors (1)

S.3331: A bill to amend the Internal Revenue Code of 1986 to require that the payment of the manufacturers' excise tax on recreational equipment be paid quarterly.
Sponsor: Sen Baucus, Max [MT] (introduced 7/24/2008)      Cosponsors (1)

S.3335: A bill to amend the Internal Revenue Code of 1986 to extend certain expiring provisions, and for other purposes.
Sponsor: Sen Baucus, Max [MT] (introduced 7/24/2008)      Cosponsors (1)

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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