Daily Tax Update - April 2, 2009

HOUSE EXPECTED TO PASS BUDGET RESOLUTION TODAY AS SENATE CONTINUES DEBATE:  Later today, the House is expected to complete debate and pass its budget resolution, H. Con. Res. 85. Meanwhile, the Senate continues to vote on numerous amendments to its budget resolution, S. Con. Res. 13. The timetable for Senate completion of its budget resolution is uncertain. Senate Budget Chairman Kent Conrad said, “We have over 230 amendments pending. If you divide 230 by three, that is almost 80 hours. That would mean we would be here all day today, all day tomorrow and all day Saturday. So if everyone sticks to their amendment that is what is going to happen.”

  • House Republicans plan to offer a budget alternative that would make permanent the 2001 and 2003 tax cuts, extend alternative minimum tax relief, and reduce the corporate tax rate to 25%. The Republican alternative is expected to be defeated on the House floor.
  • Today, the Senate defeated a Republican substitute amendment offered by Senator John McCain along party lines. McCain’s amendment called for “payroll tax reform that makes the tax code fair, more pro-growth, easier to administer, improves compliance and aids US international tax compliance.”
  • Yesterday, the Senate passed an amendment offered by Senator John Ensign that would require 60 votes to pass any legislation that would raise taxes on families making less than $250,000 a year or individuals making less than $200,000. The Senate also approved an amendment sponsored by Senator John Cornyn that would allow for a 60-vote point of order against legislation that would raise taxes on small businesses.
  • A conference committee will have to reconcile the differences in the House and Senate budget resolutions.

MISCELLANEOUS GUIDANCE ISSUED TODAY:
Notice 2009-32 announces the 2008 section 45K credit for fuel produced from a nonconventional source. For 2008, the section 45K credit is only available for fuel produced from coke or coke gas (other than from petroleum based products) and is not subject to phase-out.      
 
TAX BILLS INTRODUCED APRIL 1ST:
H.R.1833: To amend the Internal Revenue Code of 1986 to provide for a credit which is dependent on enactment of State qualified scholarship tax credits and which is allowed against the Federal income tax for charitable contributions to education investment organizations that provide assistance for elementary and secondary education.
Sponsor: Rep Franks, Trent [AZ-2] (introduced 4/1/2009)      Cosponsors (16)

H.R.1835: To amend the Internal Revenue Code of 1986 to encourage alternative energy investments and job creation.
Sponsor: Rep Boren, Dan [OK-2] (introduced 4/1/2009)      Cosponsors (13)

H.R.1836: To amend the Internal Revenue Code of 1986 to provide a payroll tax holiday for small businesses.
Sponsor: Rep Minnick, Walter [ID-1] (introduced 4/1/2009)      Cosponsors (1)

H.R.1857: To amend the Internal Revenue Code of 1986 to increase the limitation on the allowance of capital losses of taxpayers other than corporations.
Sponsor: Rep Marchant, Kenny [TX-24] (introduced 4/1/2009)      Cosponsors (None)

H.R.1863: To amend the Internal Revenue Code of 1986 to impose a tax on the amount of wages in excess of the contribution and benefit base, and for other purposes.
Sponsor: Rep Wexler, Robert [FL-19] (introduced 4/1/2009)      Cosponsors (None)

S.765: A bill to amend the Internal Revenue Code of 1986 to allow the Secretary of the Treasury to not impose a penalty for failure to disclose reportable transactions when there is reasonable cause for such failure, to modify such penalty, and for other purposes.
Sponsor: Sen Nelson, E. Benjamin [NE] (introduced 4/1/2009)      Cosponsors (5)

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.