Daily Tax Update - December 3, 2009

HOUSES PASSES PERMANENT ESTATE TAX BILL: Today, by a vote of 225 to 200, the House passed legislation (H.R. 4154) that would make permanent the current estate tax rate of 45 percent and the $3.5 million per person exemption (not indexed for inflation) at a $233.6 billion cost. No Republicans voted for the bill and 26 Democrats voted in opposition. The bill is not offset but will later be attached to the House-passed “Statutory Pay-As-You-Go Act of 2009.”

  • Republicans said that the bill didn’t go far enough. House Ways and Means Committee ranking member Dave Camp said, “We're for total repeal; we don't think death in and of itself should be a taxable event.”
  • It is unclear when the Senate might act.
  • The technical explanation of the bill can be accessed here
  • The text of the bill can be accessed here.

MISCELLANEOUS GUIDANCE RELEASED TODAY:
Revenue Procedure 2009-54 updates Rev. Proc. 2008-72, 2008-2 C.B. 1286, and provides optional standard mileage rates for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes. This revenue procedure also provides rules under which the amount of ordinary and necessary expenses of local travel or transportation away from home that are paid or incurred by an employee are deemed substantiated under § 1.274-5 of the Income Tax Regulations if a payor (an employer, its agent, or a third party) provides a mileage allowance under a reimbursement or other expense allowance arrangement.

TAX BILLS INTRODUCED DECEMBER 2ND:
H.R.4169: To amend the Internal Revenue Code of 1986 to make technical corrections, and for other purposes.
Sponsor: Rep Rangel, Charles B. [NY-15] (introduced 12/2/2009)      Cosponsors (1)

H.R.4174: To amend the Internal Revenue Code of 1986 to provide relief with respect to estate and gift taxes, small businesses, and government contractors.
Sponsor: Rep Nye, Glenn C., III [VA-2] (introduced 12/2/2009)      Cosponsors (None)

H.R.4179: To amend the Internal Revenue Code of 1986 to keep Americans working by creating a refundable work-sharing tax credit that stimulates demand in the private sector labor market and provides employers with an alternative to layoffs.
Sponsor: Rep Conyers, John, Jr. [MI-14] (introduced 12/2/2009)      Cosponsors (3)

H.R.4184: To amend the Internal Revenue Code of 1986 to make permanent the qualified tuition deduction.
Sponsor: Rep Pomeroy, Earl [ND] (introduced 12/2/2009)      Cosponsors (None)

H.R.4185: To amend the Social Security Act and the Internal Revenue Code of 1986 to exempt certain employment as a member of a local governing board, commission, or committee from Social Security tax coverage.
Sponsor: Rep Pomeroy, Earl [ND] (introduced 12/2/2009)      Cosponsors (None)

H.R.4186: To amend the Internal Revenue Code of 1986 to extend for 2 years the treatment of certain farming business machinery and equipment as 5-year property for purposes of depreciation.
Sponsor: Rep Pomeroy, Earl [ND] (introduced 12/2/2009)      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
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.