Daily Tax Update - January 28, 2009

HOUSE EXPECTED TO APPROVE STIMULUS BILL:  Later tonight, the House is expected to pass the $825 billion “American Recovery and Reinvestment Act of 2009.” A substitute stimulus proposal offered by Republicans is expected to be defeated. 

  • Today, in a meeting with several business leaders, President Obama said, “I'm confident we're going to get it passed.” Obama added, “I know that some are skeptical about the size and scale of this recovery plan. I understand that skepticism, which is why this recovery plan will include unprecedented measures that will allow the American people to hold my administration accountable.”

FINANCE COMMITTEE PASSES STIMULUS BILL WITH AMT PATCH:  Last night, the Senate Finance Committee approved the “American Recovery and Reinvestment Act of 2009” by a vote of 14-9. The legislation now includes $342 billion in tax cuts for families and businesses after adding a $70 billion, unoffset, one-year alternative minimum tax patch. The House bill does not contain the AMT patch.

  • Among the changes in the Finance bill is a provision that would prospectively repeal Treasury Notice 2008-83, which liberalized rules in the tax code that are intended to prevent taxpayers that acquire companies from claiming losses that were incurred by the acquired company prior to the taxpayer’s ownership of the company.
  • Senators also agreed to a modification to the Chairman's Mark that makes language for the extension of the net operating loss carryback provision to five years more similar to that of the House bill.

TAX BILLS INTRODUCED JANUARY 27TH:
H.R.705: To amend the Internal Revenue Code of 1986 to encourage teachers to pursue teaching science, technology, engineering, and math subjects at elementary and secondary schools.
Sponsor: Rep Ehlers, Vernon J. [MI-3] (introduced 1/27/2009)      Cosponsors (11)

H.R.716: To amend the Public Health Service Act, the Employee Retirement Income Security Act of 1974, and the Internal Revenue Code of 1986 to require group and individual health insurance coverage and group health plans to provide coverage for individuals participating in approved cancer clinical trials.
Sponsor: Rep Israel, Steve [NY-2] (introduced 1/27/2009)      Cosponsors (2)

H.R.717: To amend the Internal Revenue Code of 1986 to provide incentives to improve America's research competitiveness, and for other purposes.
Sponsor: Rep Johnson, Eddie Bernice [TX-30] (introduced 1/27/2009)      Cosponsors (1)

H.R.719: To amend the Internal Revenue Code of 1986 to extend relief from the alternative minimum tax.
Sponsor: Rep Lee, Christopher J. [NY-26] (introduced 1/27/2009)      Cosponsors (None)

H.R.721: To amend the Internal Revenue Code of 1986 to modify the exception from the 10 percent penalty for early withdrawals from governmental plans for qualified public safety employees.
Sponsor: Rep Meek, Kendrick B. [FL-17] (introduced 1/27/2009)      Cosponsors (1)

H.R.726: To amend the Internal Revenue Code of 1986 to provide a credit and a deduction for small political contributions.
Sponsor: Rep Petri, Thomas E. [WI-6] (introduced 1/27/2009)      Cosponsors (1)

S.333: A bill to amend the Internal Revenue Code of 1986 to allow an above-the-line deduction against individual income tax for interest on indebtedness and for State sales and excise taxes with respect to the purchase of certain motor vehicles.
Sponsor: Sen Mikulski, Barbara A. [MD] (introduced 1/27/2009)      Cosponsors (3)

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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