Daily Tax Update - April 28, 2010

SENATE FINANCE TO HOLD SECOND HEARING ON BANK TAX:  On May 4, Treasury Secretary Timothy Geithner and other industry leaders will testify before the Senate Finance Committee on a proposed fee on large financial institutions, commonly referred to as the bank tax.  The hearing is entitled, “The President’s Proposed Fee on Financial Institutions Regarding TARP: Part 2.”

  • President Obama proposed the Financial Crisis Responsibility Fee, a fee on financial institutions with over $50 billion in assets, to recover losses from the Troubled Asset Relief Program (TARP).  According to the Committee, “Tuesday’s hearing will be the second Finance Committee hearing to explore the effects of a bank tax and potential structures of such a tax.”

Notice 2010-35 containing a correction of an error relating to reimbursement of eligible expenses with proceeds of specified tax credit bonds under section 6431(f) of the Internal Revenue Code.  The second paragraph of section 6.4 of the released notice on page 14 provides that under 54A(d)(2)(D) of the Code only eligible expenses incurred after the enactment of the HIRE Act may be reimbursed.  The corrected notice provides instead that under section 54A(d)(2)(D) of the Code eligible expenses may be reimbursed regardless of whether such expenses were paid or incurred before or after the date of enactment of the HIRE Act.  

H.R.5147: To amend the Internal Revenue Code of 1986 to extend the funding and expenditure authority of the Airport and Airway Trust Fund, to amend title 49, United States Code, to extend authorizations for the airport improvement program, and for other purposes.
Sponsor: Rep Oberstar, James L. [MN-8] (introduced 4/27/2010)      Cosponsors (5)

S.3262: A bill to amend the Internal Revenue Code of 1986 to provide that the volume cap for private activity bonds shall not apply to bonds for facilities for the furnishing of water and sewage facilities.
Sponsor: Sen Menendez, Robert [NJ] (introduced 4/27/2010)      Cosponsors (3)

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.