Daily Tax Update - April 15, 2010

HOUSE SENDS TAXPAYER ASSISTANCE BILL TO SENATE: Yesterday, the House voted 399 to 9 to pass the “Taxpayer Assistance Act of 2010 (H.R. 4994).” It is unclear when the Senate will act on the bill.

  • The bill would:
    • Eliminate the strict substantiation rules requiring individuals to keep detailed records regarding cell phones and similar equipment used for business purposes.
    • Require the IRS to pay interest on refunds related to individual income tax returns that are filed electronically if the refund is not paid within 30 days of the later of the return due date or the date the return is filed.
    • Help taxpayers enter into offer-in-compromise agreements to settle their federal tax liabilities, and increase the likelihood that some amount of tax is collected by repealing the partial payment requirement.
  • The two revenue provisions in the bill would:
    • Clarify that the penalty applicable to bad checks or money orders extends to all commercially acceptable instruments of payment (i.e., electronic payments).
    • Increase the penalties for failing to file correct returns, failing to furnish correct payee statements, and failing to comply with other information reporting requirements.

MISCELLANEOUS GUIDANCE RELEASED TODAY: Notice 2010-30 provides an extension of time to pay tax until October 15, 2010 to civilian spouses of military service members working in American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, or the US Virgin Islands (“US territory”) but claiming residence or domicile for tax purposes in a State or the District of Columbia pursuant to the Military Spouses Residency Relief Act (“MSRRA”). In addition, this notice provides procedures for filing claims for refund of federal income taxes to civilian spouses of military service members working in a State or the District of Columbia but claiming residence or domicile for tax purposes in a US territory under MSRRA.

TAX BILL INTRODUCED APRIL 14TH:
S.3205: A bill to amend the Internal Revenue Code of 1986 to provide that fees charged for baggage carried into the cabin of an aircraft are subject to the excise tax imposed on transportation of persons by air.
Sponsor: Sen Schumer, Charles E. [NY] (introduced 4/14/2010)      Cosponsors (11)

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.