Daily Tax Update - January 22, 2010

BAUCUS VOWS TO PASS HEALTH REFORM: Yesterday, Senate Finance Chairman Max Baucus was optimistic that Congress would still be able to pass a health care reform bill. Baucus said, “We’re going to pass health care reform. There are lots of options, and we’re just talking about the pros and cons.” Baucus added that “it might take a day or two” to figure out how to accomplish this goal and he didn’t elaborate on what form the bill might take. Democrats are still weighing their options on how to proceed.

  • Republican Senator Olympia Snowe said, “It's a question of going back to the drawing board.” Snowe said that the President “has to build a consensus, broader support. People were really very much concerned, if not opposed, to the size and scope of this legislation and the uncertainty that emanated from it.”
  • Rank-and-file House Democrats said that they would not support the Senate bill’s excise tax on “Cadillac” insurance plans. Rep. Bill Pascrell said, “The excise tax is dead. Both of these bills as they stand now are dead.” Pascrell added, “I got the sense that we wanted to move on and not move back to the House and Senate bills.”

MISCELLANEOUS GUIDANCE RELEASED TODAY:

  • Notice 2010-16 designates the Haiti earthquake occurring in January 2010 as a qualified disaster for purposes of § 139 of the Internal Revenue Code.

TAX BILLS INTRODUCED JANUARY 21st:

H.R.4486: To amend the Internal Revenue Code of 1986 to treat distributions of debt securities in a tax free spin-off transaction in the same manner as distributions of cash or other property.
Sponsor: Rep Hodes, Paul W. [NH-2] (introduced 1/21/2010) Cosponsors (21)

H.R.4494: To amend the Internal Revenue Code of 1986 to allow a credit for lightweight coal freight cars.
Sponsor: Rep Davis, Danny K. [IL-7] (introduced 1/21/2010) 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.

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