Daily Tax Update - February 25, 2009

PRESIDENT VOWS TO CLOSE CORPORATE LOOPHOLES:  In last night’s address to Congress, President Obama said, “[W]e will restore a sense of fairness and balance to our tax code by finally ending the tax breaks for corporations that ship our jobs overseas.” The President continued, “In order to save our children from a future of debt, we will also end the tax breaks for the wealthiest 2% of Americans. But let me perfectly clear, because I know you’ll hear the same old claims that rolling back these tax breaks means a massive tax increase on the American people: if your family earns less than $250,000 a year, you will not see your taxes increased a single dime. I repeat: not one single dime. In fact, the recovery plan provides a tax cut – that’s right, a tax cut – for 95% of working families. And these checks are on the way.”    

  • House Ways and Means Committee member Earl Pomeroy (D-ND) said, “We’ve been frustrated within Ways and Means about our inability to address what have become openly tax avoidance practices. With White House leadership, we can change this.” Pomeroy added, “It's simple in concept, but a little tougher in execution.”
  • The President’s speech can be accessed here

IRS PROVIDES INFORMATION ABOUT FIRST-TIME HOMEBUYER TAX CREDIT:  Today, the IRS announced that taxpayers who qualify for the first-time homebuyer credit and purchase a home this year before December 1 have a special option available for claiming the tax credit either on their 2008 tax returns due April 15 or on their 2009 tax returns next year. Qualifying taxpayers who buy a home before December 1, 2009 can get a credit of up to $8,000, or $4,000 for married filing separately.

  • IRS Commissioner Doug Shulman said, “For first-time homebuyers this year, this special feature can put money in their pockets right now rather than waiting another year to claim the tax credit,” said IRS Commissioner Doug Shulman. “This important change gives qualifying homebuyers cash they do not have to pay back.”
  • Additional information can be accessed here.

TAX BILLS INTRODUCED FEBRUARY 24TH
H.R.1159: To amend the Internal Revenue Code of 1986 to provide special rules for investments lost in a fraudulent Ponzi-type scheme.
Sponsor: Rep Meek, Kendrick B. [FL-17] (introduced 2/24/2009)      Cosponsors (None)

S.461: A bill to amend the Internal Revenue Code of 1986 to extend and modify the railroad track maintenance credit.
Sponsor: Sen Lincoln, Blanche L. [AR] (introduced 2/24/2009)      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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