Daily Tax Update - June 5, 2009

WAYS AND MEANS EXPECTED TO MARK UP HEALTH CARE REFORM PACKAGE AFTER JULY 4TH:  The House Ways and Means Committee is expected to introduce a health care reform plan in mid-June followed by hearings later this month. The Committee is expected to mark up the bill soon after the July 4th recess.

  • When asked if all of the financing options are still being considered, Ways and Means Committee Chairman Charles Rangel said, “Yes,” but added that “even things that we're not thinking about doing are on the table, to me, it's just a way to avoid answering the question.” Rangel later said, “Some people think it would be better if I said everything is on the table…there are a lot of bad ideas on the table.”

IRS CLARIFIES REQUIREMENT FOR FILING FBAR FORM DUE THIS MONTH: Today, the IRS announced that they would allow taxpayers to rely on the definition of a United States person as set forth in the prior instructions to the FBAR form when determining their filing requirement. This announcement affects those preparing for the coming June 30, 2009 deadline. 

  • The IRS took this action to reduce burden after concerns and questions were raised regarding the new instructions issued last year on who must file the revised Form TD F 90-22.1 (Report of Foreign Bank and Financial Accounts, or FBAR).

  • For this year, taxpayers and others can rely on the definition of a United States person included in the prior instruction: "United States Person The term “United States person" means (1) a citizen or resident of the United States, (2) a domestic partnership, (3) a domestic corporation, or (4) a domestic estate or trust.”

  • According to the IRS, “All other requirements of the current version of the FBAR form and instructions (revised in October 2008) are still in effect. The current version of the form must be used when filing an FBAR. This substitution affecting who must file the FBAR applies only to FBARs due on June 30, 2009. The IRS will be following up with additional guidance on the requirement to file for future years.”

  • The announcement can be accessed here.

MISCELLANEOUS GUIDANCE RELEASED TODAY:
Notice 2009-52 provides a description of the procedures that taxpayers will be required to follow to make an irrevocable election to take the investment tax credit for energy property under section 48 of the Internal Revenue Code in lieu of the production tax credit under section 45 of the Internal Revenue Code.

TAX BILLS INTRODUCED JUNE 4th:
H.R.2705 : To amend the Internal Revenue Code of 1986 to allow a refundable credit for advance directives.
Sponsor: Rep McDermott, Jim [WA-7] (introduced 6/4/2009) Cosponsors (None)  

H.R.2720 : To amend the Internal Revenue Code of 1986 to make permanent the election to treat the cost of qualified film and television productions as an expense which is not chargeable to capital account.
Sponsor: Rep Crowley, Joseph [NY-7] (introduced 6/4/2009) Cosponsors (1)

H.R.2725 : To amend the Internal Revenue Code of 1986 to provide a 5-year extension for the real property standard deduction and to adjust such deduction for inflation.
Sponsor: Rep Holt, Rush D. [NJ-12] (introduced 6/4/2009) Cosponsors (5)

H.R.2739 : To amend the Internal Revenue Code of 1986 to treat trees and vines producing fruit, nuts, or other crops as placed in service in the year in which it is planted for purposes of special allowance for depreciation.
Sponsor: Rep Thompson, Mike [CA-1] (introduced 6/4/2009) Cosponsors (3)

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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