Daily Tax Update - December 8, 2009

ADMINISTRATION ISSUES STATEMENT IN SUPPORT OF EXTENDERS BILL WITH CARRIED INTEREST OFFSET: The Administration issued a statement today in support of a bill (H.R. 4213) to extend expiring tax provisions. The Administration's statement said, "The Administration strongly supports House passage of the Tax Extenders Act of 2009. Passage of this bill will provide much-needed relief to families and businesses who are struggling in the current economic downturn. As the Nation’s economy recovers from the economic crisis, this legislation includes several provisions that will encourage companies to invest in new technologies and hire more workers. H.R. 4213 will extend the research and experimentation (R&E) tax credit for another year, encouraging businesses to increase investments in technology and create more high-tech jobs for the twenty-first century. The legislation also extends the tax credit for biodiesel and renewable diesel, providing clean energy companies with the certainty they need to make critical investments in the Nation’s energy future. The Administration is also pleased with the extension of the new markets tax credit. Since its establishment in 2000, this credit has stimulated private investment in economically depressed communities, helping to build schools and health care facilities as well as providing entrepreneurs with the resources to succeed." The statement concluded, "Finally, the Administration commends the House for paying for this job-creating legislation in a fiscally-responsible manner that is consistent with other legislative priorities including health care. The legislation would fulfill the Administration’s commitment to crack down on overseas tax havens and put a stop to billions of dollars worth of tax abuse and would end the special preferential tax treatment for carried interest income."

  • The House is scheduled to take up the bill tomorrow.

MISCELLANEOUS GUIDANCE ISSUED:
Notice 09-90 (released yesterday) sets forth guidance relating to the tax credit under § 45 of the Internal Revenue Code for refined coal. The notice (1) provides for a definition of refined coal; (2) does not require that the producer of the refined coal own the facility; (3) provides for (a) permissible emissions reductions testing, (b) the frequency of such testing, and (c) for the certification of emissions reduction.

TAX BILLS INTRODUCED DECEMBER 7th:
H.R.4213: To amend the Internal Revenue Code of 1986 to extend certain expiring provisions, and for other purposes.
Sponsor: Rep Rangel, Charles B. [NY-15] (introduced 12/7/2009)      Cosponsors (None)

S.2841: A bill to amend the Internal Revenue Code of 1986 to allow S corporations the deduction for charitable contribution of inventory.
Sponsor: Sen Burris, Roland [IL] (introduced 12/7/2009)      Cosponsors (None)

S.2842: A bill to amend the Internal Revenue Code of 1986 to deny the deduction for direct to consumer advertising expenses for prescription pharmaceuticals and to provide a deduction for fees paid for the participation of children in certain organizations which promote physical activity.
Sponsor: Sen Begich, Mark [AK] (introduced 12/7/2009)      Cosponsors (None)

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.