Daily Tax Update - June 4, 2009

IRS TO PROPOSE RECOMMENDATIONS AFFECTING TAX RETURN PREPARERS AND IMPROVE TAXPAYER COMPLIANCE:  Today, IRS Commissioner Doug Shulman said that he would propose a comprehensive set of recommendations by the end of this year to help improve taxpayer compliance and ensure “uniform and high ethical standards of conduct for tax preparers.”

  • The IRS said that some of the recommendations could focus on a new model for the regulation of tax return preparers; service and outreach for return preparers; education and training of return preparers; and enforcement related to return preparer misconduct. The IRS will also seek input from enrolled agents, lawyers and accountants, unlicensed tax preparers and software vendors as well as consumer groups and taxpayers.
  • Shulman said, “Tax return preparers help Americans with one of their biggest financial transactions each year. We must ensure that all preparers are ethical, provide good service and are qualified. At the end the day, tax preparers and the associated industry must be part of our overall game plan to strengthen the integrity of the tax system. We plan to have a transparent and open dialogue about the issues. At this early and critical stage of the process, we need to hear from the broadest possible range of stakeholders.”

Notice 2009-49 provides that, if the Treasury Department (or an entity acting on its behalf) acquires preferred stock, common stock, warrants to purchase common stock or other types of equity of a financial institution or other entity pursuant to the Emergency Economic Stabilization Act of 2008, then such acquisition is not a change in control event with respect to which a payment can be made under a nonqualified deferred compensation plan pursuant to § 409A(a)(2)(A)(v) of the Internal Revenue Code.
H.R.2672: To amend the Internal Revenue Code of 1986 to allow credits for the establishment of franchises with veterans.
Sponsor: Rep Schock, Aaron [IL-18] (introduced 6/3/2009)      Cosponsors (1)

S.1166: A bill to amend the Internal Revenue Code of 1986 to allow taxpayers to designate part or all of any income tax refund to support reservists and National Guard members.
Sponsor: Sen Reid, Harry [NV] (introduced 6/3/2009)      Cosponsors (None)

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 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.