Daily Tax Update - August 1, 2008

THE DAILY TAX UPDATE WILL BE PUBLISHED ON A PERIODIC BASIS UNTIL CONGRESS RETURNS FROM ITS AUGUST RECESS ON SEPTEMBER 8TH.

ACTION ON EXTENDERS DELAYED UNTIL SEPTEMBER:  The Senate failed to obtain cloture on its tax extenders/AMT bill four times before Congress recessed for its summer break. Senate Majority Leader Harry Reid said that the extenders bill would “absolutely” be on their agenda when Congress returns in September. Reid added, “We have to do that.”    

IRS RELEASES UPDATED DRAFTS OF CORPORATE AND PARTNERSHIP TAX FORMS:  The IRS has released for public comment draft revisions to Form 1065, US Return of Partnership Income, Form 1120, US Corporation Income Tax Return, and certain related schedules. Included in the release are new Schedule B for Form 1120 and Schedule C for Form 1065. These forms will be used for tax years ending on or after December 31, 2008.  The major change to Form 1120 involves reporting direct and indirect ownership. When ownership meets certain percentage thresholds, it must be reported on Schedule K. Certain questions on Schedule K have been revised for this reporting.

  • IRS Commissioner of the Large and Mid-Size Business Division Frank Ng said, “The draft revisions and new forms will increase transparency about the ownership and relationships between entities that make up complex enterprise business structures. This will enable IRS to better assess compliance risk.”
  • Additional information can be accessed here.
TAX BILLS INTRODUCED JULY 31st:
H.R.6708: To amend the Internal Revenue Code of 1986 to provide that no loan may be made from a qualified employer plan using revolving credit arrangements and to limit the number of loans that may be made from a qualified employer plan to a participant or beneficiary.
Sponsor: Rep Foster, Bill [IL-14] (introduced 7/31/2008)      Cosponsors (1)

H.R.6716: To amend the Internal Revenue Code of 1986 to reduce the recovery periods for certain energy production and distribution facilities. Sponsor: Rep Bachmann, Michele [MN-6] (introduced 7/31/2008)    Cosponsors (7)

H.R.6718: To amend the Internal Revenue Code of 1986 to provide accelerated depreciation for computer equipment placed in service by small businesses.
Sponsor: Rep Bean, Melissa L. [IL-8] (introduced 7/31/2008)    Cosponsors (None)

H.R.6719: To amend the Internal Revenue Code of 1986 to allow hardship distributions from 401(k) plans to prevent the insolvency of a trade or business of the employee.
Sponsor: Rep Bean, Melissa L. [IL-8] (introduced 7/31/2008)    Cosponsors (None)

H.R.6721: To amend the Internal Revenue Code of 1986 to allow an unlimited exclusion from transfer taxes for certain farmland and land of conservation value, and for other purposes.
Sponsor: Rep Bishop, Timothy H. [NY-1] (introduced 7/31/2008)      Cosponsors (None)

H.R.6722: To amend the Internal Revenue Code of 1986 to limit the application of tax exempt bond financing relating to newly included counties in the Gulf Opportunity Zone to property, neither the acquisition of which occurred, nor the construction, reconstruction, or renovations began, prior to the enactment of the Housing Assistance Tax Act of 2008.
Sponsor: Rep Blumenauer, Earl [OR-3] (introduced 7/31/2008)      Cosponsors (3)

H.R.6727: To amend the Internal Revenue Code of 1986 to promote charitable donations of qualified vehicles.
Sponsor: Rep Delahunt, William D. [MA-10] (introduced 7/31/2008)    Cosponsors (None)

H.R.6734: To amend the Internal Revenue Code of 1986 to encourage increased access to alternative fuels.
Sponsor: Rep Herseth Sandlin, Stephanie [SD] (introduced 7/31/2008)    Cosponsors (1)

H.R.6736: To amend the Internal Revenue Code of 1986 to provide a tax credit for the installation of residential wind systems.
Sponsor: Rep Hoekstra, Peter [MI-2] (introduced 7/31/2008)      Cosponsors (None)

H.R.6737: To amend the Internal Revenue Code of 1986 to allow individuals with children attending an elementary or secondary school a deduction for each child attending a public school equal to 25 percent of the State's average per pupil public education spending and, for each child attending a private or home school, a deduction equal to 100 percent of such average.
Sponsor: Rep Hoekstra, Peter [MI-2] (introduced 7/31/2008)      Cosponsors (5)

H.R.6741: To amend the Internal Revenue Code of 1986 to modify and extend certain energy-related tax credits.
Sponsor: Rep Israel, Steve [NY-2] (introduced 7/31/2008)      Cosponsors (None)

H.R.6749: To amend the Internal Revenue Code of 1986 to allow retail businesses a credit against income tax for a portion of the cost of recycling plastic carry-out bags and certain other types of plastic.
Sponsor: Rep Lowey, Nita M. [NY-18] (introduced 7/31/2008)    Cosponsors (None)

H.R.6755: To amend the Internal Revenue Code of 1986 to increase the alternative tax liability limitation for small property and casualty insurance companies.
Sponsor: Rep Pomeroy, Earl [ND] (introduced 7/31/2008)      Cosponsors (1)

H.R.6756: To amend the Internal Revenue Code of 1986 to provide tax incentives for clean coal technology, and for other purposes. Sponsor: Rep Pomeroy, Earl [ND] (introduced 7/31/2008)      Cosponsors (1)

H.R.6759: To amend the Internal Revenue Code of 1986 to extend the renewable electricity production credit and to require the Secretary of Labor to establish a program to provide for workforce training and education, at institutions of higher education, in the fields of renewable energy and efficiency, green technology, and sustainable environmental practices. Sponsor: Rep Space, Zachary T. [OH-18] (introduced 7/31/2008)      Cosponsors (None) 

H.R.6762: To amend the Internal Revenue Code of 1986 to provide a credit against tax for increased homeowners insurance premiums suffered by certain coastal homeowners subject to increased risk from hurricane events, and for homeowner mitigation expenditures for natural catastrophic events.
Sponsor: Rep Thompson, Bennie G. [MS-2] (introduced 7/31/2008)    Cosponsors (None)

S.3371: A bill to amend the Internal Revenue Code of 1986 to simplify the deduction for use of a portion of a residence as a home office by providing an optional standard home office deduction.
Sponsor: Sen Snowe, Olympia J. [ME] (introduced 7/31/2008)    Cosponsors (1)

S.3399: A bill to amend the Internal Revenue Code of 1986 to make permanent the reduction in the rate of tax on qualified timber gain of corporations, and for other purposes.
Sponsor: Sen Lincoln, Blanche L. [AR] (introduced 7/31/2008)    Cosponsors (9)

S.3408: A bill to amend title XI of the Social Security Act to provide for the conduct of comparative effectiveness research and to amend the Internal Revenue Code of 1986 to establish a Comparative Effectiveness Research Trust Fund, and for other purposes.
Sponsor: Sen Baucus, Max [MT] (introduced 7/31/2008)      Cosponsors (1)

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.

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