Daily Tax Update - April 23, 2010

SENATE BUDGET COMMITTEE APPROVES FY 2011 BUDGET RESOLUTION: Yesterday, the Senate Budget Committee passed its Fiscal Year 2011 budget resolution by a vote of 12-10. The resolution now goes to the full Senate. House Majority Leader Steny Hoyer said yesterday that he hopes the House can pass its budget resolution before the Memorial Day recess.

  • According to the Committee, “The Chairman’s Mark provides net tax relief of $780 billion over the five years of the plan, targeted largely on the middle-class. It reflects the permanent extension of the 2001 and 2003 income tax provisions for couples with incomes below $250,000 and singles with income below $200,000. This is consistent with the exemptions provided in the statutory pay go law enacted earlier this year. The policies extended include: the 10 percent bracket; the Child Tax Credit; marriage penalty relief; the 25 and 28 percent brackets, and part of the 33 percent bracket; capital gains and dividends tax relief; and tax incentives for families.
  • The Chairman’s Mark provides for two years of AMT relief and for two years of estate tax reform reflecting the 2009 estate tax levels, with an exemption of $3.5 million ($7 million for a couple) indexed for inflation. These policies are also consistent with the exemptions included in the new statutory pay-go law. For the AMT and estate tax, the Chairman’s Mark assumes the cost beyond two years will either be paid for or resolved in the context of tax reform being considered by the President’s fiscal commission. 
  • The Chairman’s Mark also provides for continuing through 2011 expiring tax provisions (“extenders”), such as the R&E tax credit, the deduction for state and local sales taxes, and a range of energy incentives. It includes provisions to promote small business investment, manufacturing, and infrastructure. And it includes a reserve fund for additional tax relief and tax reform.”

MISCELLANEOUS GUIDANCE RELEASED:

Announcement 2010-32 informs taxpayers and practitioners that the IRS has revised Form 3115, Application for Change in Accounting Method, and its instructions. The Form 3115 (Rev. December 2009) replaces the December 2003 version. This announcement also provides a transition period and transition guidance.

REG-134235-08 provides notice of public hearing on a notice of proposed rulemaking providing guidance to tax return preparers on furnishing an identifying number on tax returns and claims for refund of tax that they prepare. 

TAX BILL INTRODUCED APRIL 22nd:

H.R.5129: To amend the Internal Revenue Code of 1986 to treat carsharing and ridesharing reimbursement arrangements as qualified transportation fringe benefits.
Sponsor: Rep Hodes, Paul W. [NH-2] (introduced 4/22/2010) Cosponsors (1)

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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