Daily Tax Update - March 23, 2010

PRESIDENT SIGNS HEALTH CARE REFORM BILL INTO LAW—SENATE BEGINS DEBATE ON RECONCILIATION BILL: Today, President Obama signed the Patient Protection and Affordable Care Act (H.R. 3590) into law. H.R. 3590 was passed by the House on March 21 and by the Senate in December 2009. The Senate began debate on the health care reconciliation bill (The Health Care and Education Affordability Reconciliation Act of 2010—H.R. 4872) this afternoon. Senate Majority Leader Harry Reid says he has the 51 required votes to pass the reconciliation bill. Meanwhile, Senate Republicans plan to offer dozens of amendments and utilize parliamentary tactics to try to slow or change the reconciliation bill.

  • Today, Senate Finance Chairman Max Baucus said that the Senate might be forced to make some “minor” changes to the health care reconciliation bill. Baucus said, “We think we’re pretty much in the clear all the way around. There’s one or two [items] that might have to be changed...in the whole scheme of things, they’re not going to defeat the bill. They’re not poison pills; they’re not game-changers. They’re minor, and we can deal with minor changes.” However, Baucus said that it is his goal to pass the bill “as is—no changes.” In the event that changes are made to the reconciliation bill by the Senate, the House would have to hold another vote on the Senate bill.
  • At today’s bill signing ceremony, the President said, “Our presence here today is remarkable and improbable. With all the punditry, all of the lobbying, all of the game-playing that passes for governing in Washington, it’s been easy at times to doubt our ability to do such a big thing, such a complicated thing; to wonder if there are limits to what we, as a people, can still achieve. It’s easy to succumb to the sense of cynicism about what’s possible in this country. But today, we are affirming that essential truth—a truth every generation is called to rediscover for itself—that we are not a nation that scales back its aspirations. We are not a nation that falls prey to doubt or mistrust. We don't fall prey to fear. We are not a nation that does what’s easy. That’s not who we are. That’s not how we got here.” The President added, “We are a nation that faces its challenges and accepts its responsibilities. We are a nation that does what is hard. What is necessary. What is right. Here, in this country, we shape our own destiny. That is what we do. That is who we are. That is what makes us the United States of America. And we have now just enshrined, as soon as I sign this bill, the core principle that everybody should have some basic security when it comes to their health care. And it is an extraordinary achievement that has happened because of all of you and all the advocates all across the country.”
  • The President’s remarks can be accessed here
  • A summary of the bill can be accessed here

MISCELLANEOUS GUIDANCE RELEASED TODAY:
Notice 2010-28 provides interim guidance on stripping transactions for qualified tax credit bonds under section 54A of the Internal Revenue Code and on certain income tax accounting matters associated with holding and stripping qualified tax credit bonds. In addition, this Notice describes associated information reporting requirements and solicits public comments. 

TAX BILLS INTRODUCED MARCH 22ND:
S.3146: A bill to amend the Internal Revenue Code to provide a tax credit to individuals who enter into agreements to protect the habitats of endangered and threatened species, and for other purposes.
Sponsor: Sen Crapo, Mike [ID] (introduced 3/22/2010)      Cosponsors (9)

S.3148: A bill to amend the Internal Revenue Code of 1986 to provide for the treatment of Department of Defense health coverage as minimal essential coverage.
Sponsor: Sen Webb, Jim [VA] (introduced 3/22/2010)      Cosponsors (None)

S.3149: A bill to amend the Internal Revenue Code of 1986 to limit certain executive compensation paid by systemically significant financial institutions.
Sponsor: Sen Nelson, Bill [FL] (introduced 3/22/2010)      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.

STEPTOE & JOHNSON LLP - TAX PRACTICE
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