Daily Tax Update - December 15, 2010: Senate Overwhelmingly Passes Tax Cut Bill With Broad Bipartisan Support

SENATE OVERWHELMINGLY PASSES TAX CUT BILL WITH BROAD BIPARTISAN SUPPORT – WILL LIKELY PASS HOUSE:  The Senate passed the $858 billion tax cut bill today by a vote 81-19 and sent it to the House. Fourteen Senate Democrats and five Republicans voted against the bill. No amendments were adopted. Senate Majority Leader Harry Reid said that it was "a tremendous accomplishment." Reid added, "Whether you agree with all the contents of the bill or not, everyone should understand this is one of the major accomplishments of any Congress where two parties, ideologically divided, have agreed on a major issue for the American people."

  • The roll call vote can be accessed here
  • It appears that a growing number of House Democrats are seemingly resigned to the increasing likelihood that the bill will pass without any major changes in order to secure Republican support and prevent the tax hikes from taking effect January 1. The House is expected to vote on the bill tomorrow. Congress had hoped to adjourn by December 17, but that timeframe may slip into this weekend or next week if any changes are made to the Senate-passed bill.
  • Regarding the estate tax issue, Rules Committee Chair Louise Slaughter (D-NY) said that she expects the rule for House floor consideration of the tax cut bill will allow for a separate vote on the estate tax provision. Slaughter said, "There'll be a vote on the estate tax to give us all a chance to express ourselves on that dog. And then people will vote their conscience on the bill." Slaughter added, "It won't be an amendment. It will be part of the rule. We will vote on that and then vote whether or not to concur with the Senate. If the estate one loses, then we'll go right to the concurrence. Of course, if it [the estate tax] wins, the bill will go back to the Senate."
  • Senate Minority Leader Mitch McConnell warned again today that any modifications to the bill by the House could wreck the entire deal. McConnell said, "This agreement is not subject to being reopened."
  • Yesterday, 31 members of the conservative Blue Dog Democrats sent a letter to House Speaker Nancy Pelosi urging quick passage of the bill. Their letter said, "It is time for us to put aside the partisan talking points and accomplish what the American people sent us here to do."
  • Numerous House Democrats continue to oppose the bill. Rep. Peter Welch (D-VT) said, "It's a fast-moving train. The momentum is all in its favor, that's for sure." Rep. Bill Pascrell, Jr. (D-NJ) said, "There's a political reality here. We can jump up and down all we want about the higher-end estate taxes, and I don't think anything's going to change because the Senate isn't going to change it." Ways and Means member Rep. Jim McDermott (D-WA) said the bill was "just awful." McDermott added, "I still have to eat the estate tax and an extension of tax benefits to people above $250,000, and an extension of unemployment benefits for only one year. When you put those three elements together, I have a hard time getting excited about what's on the Christmas tree." Another Ways and Means member Rep. Richard Neal (D-MA) said, "The clock's ticking, the end of the year is here, and members are looking at this as the last proposal. My guess is it probably gets a fair number of Democratic votes in the House." House Majority Leader Steny Hoyer said, "We don't have much time left. There are strong feelings in the House." Hoyer added, "The temperature is pretty cold" and predicted the House would ultimately pass the bill.
  • House Republican Rep. Jack Kingston (R-GA) said, "The longer we wait, the harder it's going to be."
  • This morning, President Obama said that the tax deal "can't afford to fall victim" to a delay or a defeat. Obama said, "I am absolutely convinced that this tax cut plan, while not perfect, will help our economy and create jobs in the private sector. It will help lift up middle-class families who will no longer have to worry about a New Years' Day tax hike."
  • A summary of the Senate bill can be accessed here.  

IRS REMINDS TAX PREPARERS TO GET PTINs: The IRS encouraged paid tax return preparers to register now for their new or renewed Preparer Tax Identification Numbers (PTINs). According to the IRS, "Starting January 1, 2011, use of the PTIN will be mandatory on all federal tax returns and claims for refund prepared by a paid tax preparer. Individuals who, for compensation, prepare all or substantially all of any federal tax return or claim for refund must use PTINs."

  • David Williams, head of the Return Preparer Office said, "We urge you to register now if you plan on preparing tax returns in 2011. The holidays are approaching and it may be tempting to let this slip. Our advice is to register now. It takes 15 minutes, and you’re done. Over 380,000 preparers have registered so far."
  • The IRS added, "Any preparer who obtained a PTIN prior to the new sign-up system launch on September 28, 2010, must apply again. Generally, preparers with existing PTINs will be permitted to retain their existing numbers if the information they provide during the sign-up process matches what the IRS currently has on file. The PTIN is a nine-digit number that preparers must use when they prepare and sign a tax return or claim for refund. Previously, PTIN use was optional in place of the preparer’s social security number. Mandatory use of the PTIN is part of a broader effort by the IRS to regulate the tax return preparation industry and improve services for taxpayers."
  • Additional information can be accessed here.

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.

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