Daily Tax Update - March 1, 2010

STEPTOE OPENS OFFICE IN BEIJING, CHINA: Steptoe & Johnson LLP today announced the opening of an office in Beijing, China. With offices in the world’s major regulatory centers including Washington, DC, Brussels, London, and now Beijing, Steptoe advises international companies on the legal and regulatory developments that affect their businesses. Steptoe advises companies doing business in and from China on a wide range of matters, including international trade, market access, export control, antitrust, and compliance with US and European environmental, product safety, and other regulations. The opening of a Beijing office will help Steptoe expand its work in these areas and better serve its clients.

  • “Our long history serving US and international clients with Asian business interests provides a strong foundation on which to build in Beijing,” said Roger E. Warin, Steptoe’s Chair. “This new office will enhance our ability to provide services to multinational companies operating in China as well as Chinese companies expanding beyond the People’s Republic of China.”
  • Additional information can be accessed here

WHITE HOUSE SUGGESTS IT MAY UTILIZE “UP OR DOWN” VOTE ON HEALTH CARE REFORM: Yesterday, White House health reform director Nancy-Ann DeParle suggested President Obama is ready to use reconciliation procedures to pass a health care reform bill. DeParle said, “We're not talking about changing any rules here. All the president's talking about is: Do we need to address this problem and does it make sense to have a simple, up-or-down vote on whether or not we want to fix these problems?” Under reconciliation procedures, the bill can be passed in the Senate without the threat of a filibuster.

  • According to White House Press Secretary Robert Gibbs today, the President will discuss both the “process and policy” of his health care plan on Wednesday.
  • House Majority Leader Steny Hoyer said yesterday, “Within the next couple of weeks we're going to have a specific proposal and start counting votes to see whether or not those proposals could pass.”
  • In remarks yesterday on the issue of using reconciliation, Budget Committee Chairman Sen. Kent Conrad (D-ND) said, “Let’s just understand the question of reconciliation. I have said all year as chairman of the Budget Committee, reconciliation cannot be used to pass comprehensive health care reform. It won’t work. It won’t work because it was never designed for that kind of significant legislation. It was designed for deficit reduction. So, let’s be clear. On the major Medicare or health care reform legislation, that can’t move to reconciliation. The role for reconciliation would be very limited. It would be on sidecar issues designed to improve what passed the Senate and what would have to pass the House for health care reform to move forward. So, using reconciliation would not be for the main package at all. It would be for certain sidecar issues like how much does the federal government put up to pay for the Medicaid expansion? What is done to improve the affordability of the package that’s come out of the Senate?”
  • Today, House Speaker Nancy Pelosi said, “In a matter of days, we will have a proposal. It will be a much smaller proposal than we had in the House bill because that's where we can gain consensus. But it will be big enough to put us on a path of affordable, quality health care for all Americans that holds insurance companies accountable.”

SENATE TO CONSIDER TAX EXTENDERS PACKAGE THIS WEEK: The Senate is expected to consider a $31 billion package of expired tax provisions this week. The extenders package is part of a larger bill that also includes long-term extensions of expiring unemployment benefits, COBRA healthcare subsidies for laid-off workers with an increase in Medicaid reimbursements to states, and farm disaster aid and other provisions. It is unclear which revenue raisers will be used to pay for the bill. Senate Finance Committee Chairman Max Baucus said that the carried interest provision, which was in the House-passed bill, is unlikely to survive in the Senate.

Revenue Ruling 2010-09 (released February 26th) announces the rates of interest. 

H.R.4713: To amend the Internal Revenue Code of 1986 to allow the first-time homebuyer credit in the case of joint returns of long-time residents where only 1 spouse meets the ownership and use requirements.
Sponsor: Rep Moore, Gwen [WI-4] (introduced 2/26/2010)      Cosponsors (2)

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.