Daily Tax Update - June 2, 2009

IRS COMMISSIONER ADDRESSES OECD:  Today, IRS Commissioner Doug Shulman spoke on international issues to the Organization for Economic Co-Operation and Development (OECD). Among the topics Shulman discussed were the Administration’s proposals on deferral and the “check-the-box” rules. Shulman said, “US multinational corporations that invest overseas can take immediate deductions on their US tax returns for certain expenses but defer paying US taxes on the income. The Administration proposes to reform these rules so that companies cannot take the deductions on their US tax returns until they repatriate these offshore profits – with the exception of research and experimentation expenses. And let me be clear here too. The President is not repealing deferral. The Administration is simply proposing that deductions for expenses should match the deferred income.”  

  • Shulman continued, “Another example of a corporate tax reform proposal is to change the “check-the-box” rules that can make foreign subsidiaries “disappear” for US tax purposes. The Administration’s proposals restrict the use of the check-the-box rules for certain foreign entities. The proposals also would restrict the ability to use foreign tax credits in certain situations. The goal of these proposals is to ensure a level playing field and fairness in the tax code. This Administration is also committed to ensuring US businesses remain competitive globally.”
  • The Commissioner’s remarks can be accessed here.

OBAMA MEETS WITH SENATE DEMOCRATS ON HEALTH CARE:  Today, President Obama will meet with Senate Democrats to discuss health care reform. The White House Counsel of Economic Advisers issued a report today titled "The Economic Case for Health Care Reform."

  • The President has indicated that he wants health care reform passed by the August recess. House Ways and Means Committee Chairman Charles Rangel said that he would make health care the Committee’s top agenda item.

Notice 2009-53 provides procedures that manufacturers may follow to certify property as qualified nonbusiness energy property under § 25C of the Internal Revenue Code, as well as guidance regarding the conditions under which taxpayers seeking to claim the § 25C credit may rely on a manufacturer’s certification.  This notice also includes transition rules to provide taxpayers with guidance concerning the interaction of the effective date and timing provisions of the Energy Policy Act, the Energy Improvement and Extension Act, and the American Recovery and Reinvestment Act.

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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