Daily Tax Update - March 11, 2009

DRAFT TAX HAVENS LEGISLATION CIRCULATED BY FINANCE COMMITTEE:  The Senate Finance Committee is circulating a draft proposal of provisions designed to improve tax compliance with respect to offshore transactions. 

  • The legislation focuses on eight areas, including requiring certain entities transferring funds offshore to report to the IRS the amount and account destination; extending the statute of limitation from three years to six years for certain offshore transactions; requiring the Report of Foreign Bank and Financial Accounts to be filed with the tax return; and doubling fines and penalties on underpayments attributable to certain offshore transactions.
  • The Committee has scheduled a hearing on March 17 titled, “Tax Issues Related to Ponzi Schemes and an Update on Offshore Tax Evasion Legislation.” The witness list will be available at a later date.
  • The draft legislation can be accessed here

PELOSI SAYS ANOTHER STIMULUS BILL MAY BE NEEDED:  Yesterday, House Speaker Nancy Pelosi said that Congress may have to pass another stimulus bill to help improve the economy.  Pelosi said, “We have to keep the door open to see how this goes.” The White House press secretary declined to comment yesterday on the likelihood that President Obama would request additional stimulus funds.

MISCELLANEOUS GUIDANCE ISSUED TODAY:
Revenue Ruling 2009-07 provides the rates for interest on tax overpayment and underpayments for the calendar quarter beginning April 1, 2009. The interest rates will be 4 percent for overpayments (3 percent in the case of a corporation), 4 percent for underpayments, 1.5 percent for the portion of a corporation overpayment exceeding $10,000, and 6 percent for large corporation underpayments. The quarterly determination is required by section 6621 of the Internal Revenue Code.

  • Revenue Ruling 2009-07 will appear in IRB 2009-13, dated March 30, 2009. 

TAX BILLS INTRODUCED MARCH 10th:
H.R.1405: To amend the Internal Revenue Code of 1986 to allow Head Start teachers the same above-the-line deduction for supplies as is allowed to elementary and secondary school teachers.
Sponsor: Rep Wilson, Charles A. [OH-6] (introduced 3/10/2009)      Cosponsors (None)

H.R.1413: To amend the Internal Revenue Code of 1986 to allow certain public employees a deduction for distributions from governmental plans for health and long-term care insurance, and for other purposes.
Sponsor: Rep Crowley, Joseph [NY-7] (introduced 3/10/2009)      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
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.