Daily Tax Update - January 29, 2009

HOUSE APPROVES STIMULUS BILL ALONG PARTY LINES:  Last night, the House passed the economic stimulus bill by a vote of 244-to-188 vote. All but 11 Democrats voted for the bill, and 177 Republicans voted against it. The $825 billion bill (H.R. 1) contains approximately $275 billion in tax incentives for individuals and businesses. No changes were made to the tax title approved by the House Ways and Means Committee.

  • The Senate is expected to begin debating its version of the stimulus bill on February 2nd. Senate Majority Leader Reid wants to finish work on the bill by February 6th to allow a week to conference the bill with the House before the Presidents’ Day recess. Reid added, “We’re going to work until we complete the legislation. I’m not going to have a recess until the President has a bill on his desk to sign.”
  • Today, Reid said that the conference committee negotiations would result in a bill that would gain more Republican votes. Reid said that President Obama “will see a number of House Republicans that will vote for whatever we do in the conference.” Reid added, “Is everything that we have in this perfect? Of course not. And that’s why we’re going to have a bill that’s different from the House. But they are both good packages. They both are directed toward the same thing, bringing about change in this country’s economy.” 
  • Today, when asked if the House would consider accepting the AMT patch that is part of the Senate Finance bill, House Speaker Nancy Pelosi said, “As you know, I have been very resisting [of] all the calls for a much, much bigger package. We'll see how their bill ends up and if that becomes a priority.” 
  • Tax provisions in the House-passed bill include:
    • Tax Relief for Individuals:
    • Making Work Pay Credit”
    • Expand Earned Income Tax Credit (EITC)
    • Increase in child tax credit, $0 floor
    • Business Tax Provisions:
    • Bonus depreciation
    • 5-year carryback of net operating losses (excluding companies receiving TARP benefits, Fannie Mae, and Freddie Mac)
    • Extension of increased small business expensing
    • Expand work opportunity tax credit for disconnected youth and unemployed, recently-discharged veterans
    • Prospectively repeal Treasury Section 382 ruling
  • A summary of the tax provisions can be accessed here

TAX BILLS INTRODUCED JANUARY 28TH:
H.R.735: To amend the Internal Revenue Code of 1986 to provide that penalties and interest will not be imposed on individuals who are citizens of the United States.
Sponsor: Rep Carter, John R. [TX-31] (introduced 1/28/2009)      Cosponsors (None)

H.R.755: To amend the Internal Revenue Code of 1986 to exclude from gross income the gain from the sale or exchange of certain residences acquired before 2013.
Sponsor: Rep Calvert, Ken [CA-44] (introduced 1/28/2009)      Cosponsors (None)

H.R.760: To amend the Internal Revenue Code of 1986 to provide an income tax credit to holders of bonds financing new advanced broadband infrastructure, and for other purposes.
Sponsor: Rep Eshoo, Anna G. [CA-14] (introduced 1/28/2009)      Cosponsors (2)

H.R.779: To amend the Internal Revenue Code of 1986 to provide that tips shall not be subject to income or employment taxes.
Sponsor: Rep Paul, Ron [TX-14] (introduced 1/28/2009)      Cosponsors (None)

H.R.782: To amend the Internal Revenue Code of 1986 to repeal the alternative minimum tax on individuals and replace it with an alternative tax individuals may choose.
Sponsor: Rep Ryan, Paul [WI-1] (introduced 1/28/2009)      Cosponsors (17)

H.R.783: To amend the Internal Revenue Code to make permanent the credit for increasing research activities.
Sponsor: Rep Sensenbrenner, F. James, Jr. [WI-5] (introduced 1/28/2009)      Cosponsors (6)

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.

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