Daily Tax Update - February 3, 2009

SENATE DEBATES STIMULUS BILL AS REPUBLICANS SEEK COMPROMISE:  Senate debate on the $888 billion economic stimulus bill (H.R. 1, the American Recovery and Reinvestment Act of 2009) continues today. Democrats are not imposing any restrictions on amendments to the bill, meaning any Senator can request a vote on his or her proposals. However, 60 votes are required to approve an amendment. 

  • Today, on the Senate floor, Ranking Senate Finance member Charles Grassley said, “First off, I want to make it clear that most on our side agree with President Obama that a stimulus is necessary. The economy is flat on its back. Too many Americans who want to find work can’t find jobs. A lot of Americans are worried that their job will be the next to go. We get that on our side. Everyone here knows we need to do everything we can to get the economy moving again. Where we differ is the degree to which the engine ought to be government or the private sector, especially America’s biggest job creator, our small business sector. These are honest, well-intentioned philosophical differences, but they are there. On our side, we want the new jobs to come from the private sector. On the other side, the preference is to grow employment through an expansion of government. Many on the other side and opinion makers who agree with them are invoking the example of President Hoover. They seem to be doing it to portray anyone who questions the trillion-dollar package as a reincarnation of Hoover economics. It’s an unfair characterization. Again, let’s be clear, folks on our side recognize the need for action.” 
  • Senate Minority Leader Mitch McConnell has said that the final bill that most Senate Republicans would support will be “dramatically different” than either the bill that passed the House or the Senate Finance version. Republicans are pushing for cutting spending in the bill and greater tax cuts. McConnell said, “Republicans believe we must put money back into the pockets of taxpayers.”
  • McConnell said, “I've indicated where we think it ought to go: fix housing first, tax relief for middle- and lower- income taxpayers to put money back into their pockets immediately.” McConnell added, “Nobody that I know of is trying to keep a package from passing...We need to fix housing first.”

MISCELLANEOUS GUIDANCE ISSUED TODAY:
Notice 2009-14 expands, clarifies, and supersedes previously issued Notice 2008-100, 2008-44 I.R.B. 1081.  It will provide guidance relating to new programs established under the Emergency Economic Stabilization Act of 2008, P.L. 110-343, after Notice 2008-100 was published.

  • Notice 2009-14 will be in IRB 2009-7, dated February 17, 2009.

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
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.