Daily Tax Update - January 6, 2011: Treasury and IRS Issue Proposed Regulations on Bank Deposit Interest Reporting

THE DAILY TAX UPDATE WILL BE PUBLISHED ON A PERIODIC BASIS UNTIL THE SENATE RETURNS ON JANUARY 25TH.

TREASURY AND IRS ISSUE PROPOSED REGULATIONS ON BANK DEPOSIT INTEREST REPORTING: Today, the Treasury Department and Internal Revenue Service ("IRS") issued proposed regulations (REG-146097-09) that would extend information reporting requirements to include bank deposit interest paid to nonresident aliens who are residents of any foreign country.

  • The IRS and Treasury Department have previously published similar proposed regulations, which were later withdrawn. In 2001, the IRS and Treasury proposed bank deposit interest to any nonresident individuals to be reported to the IRS. Those regulations were withdrawn in 2002 and replaced with narrower proposed regulations that would require reporting only on payments to nonresident alien individuals that were residents of certain countries. The current regulations under Section 6049 require reporting of US bank deposit interest paid to a nonresident only if the nonresident alien individual is a resident of Canada.
  • The IRS and Treasury state that the new proposed requirements are appropriate because there is "growing global consensus regarding the importance of cooperative information exchange for tax purposes." Further, the IRS and Treasury state that "requiring routine reporting to the IRS of all US bank deposit interest paid to any nonresident alien individual will further strengthen the United States exchange of information program, consistent with adequate provisions for reciprocity, usability, and confidentiality in respect of this information."
  • The regulations are proposed to apply to payments made after December 31 of the year in which they are published as final regulations.
  • For additional information, contact Philip R. West at pwest@steptoe.com or Amanda Varma at avarma@steptoe.com.
  • The regulations can be accessed here.

HOUSE PASSES RESOLUTION TRIMMING ITS ADMINISTRATIVE EXPENSES: Today, the House voted on a resolution to cut $35 million from administrative expenses for the House. The cuts would be made to Members’ expense accounts and committee and leadership budgets. The day began with a ceremonial reading of the Constitution on the House floor. The Senate is in recess until January 25.

  • In other news, House Budget Committee Chairman Paul Ryan (R-WI) said yesterday that the spending reduction would be about $60 billion in this fiscal year, less than the $100 billion Republicans had originally planned. Ryan said that the figure has changed because Congress passed a continuing resolution that runs through March 4 leaving only half the fiscal year to adjust spending levels. Ryan said, "We’re going to cut more than $100 billion this calendar year in spending – it’s just not all going to come" from the current fiscal year.
  • Today, Sen. Charles Schumer (D-NY) said that the House Republicans' new "cut-go" and other rules policies were "reckless" and would be "dead on arrival" in the Senate. Schumer said, "So much for cutting the deficit. On the first day on the job, Republicans are already spending trillions more than they plan to cut." Schumer added, "We know we have to reduce spending. We're going to actually do it, not just promise it and walk away from it on the first day."

TAX BILLS INTRODUCED JANUARY 5TH:
1. [112nd] H.R.21: To amend the Internal Revenue Code of 1986 to repeal the mandate that individuals purchase health insurance.
Sponsor: Rep Garrett, Scott [NJ-5] (introduced 1/5/2011)   Cosponsors (31)
Committees: House Ways and Means
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

2. [112nd] H.R.25: To promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the States.
Sponsor: Rep Woodall, Rob [GA-7] (introduced 1/5/2011)   Cosponsors (47)
Committees: House Ways and Means
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

3. [112nd] H.R.35: To amend the Internal Revenue Code of 1986 to increase the deduction for certain expenses of elementary and secondary school teachers to $500 and to extend it through 2013.
Sponsor: Rep Biggert, Judy [IL-13] (introduced 1/5/2011)   Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

4. [112nd] H.R.37: To amend the Internal Revenue Code of 1986 to improve and expand education savings accounts.
Sponsor: Rep Biggert, Judy [IL-13] (introduced 1/5/2011)   Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

5. [112nd] H.R.53: To amend the Internal Revenue Code of 1986 to deny a deduction for removal costs and damages for which taxpayers are liable under the Oil Pollution Act of 1990.
Sponsor: Rep Connolly, Gerald E. "Gerry" [VA-11] (introduced 1/5/2011)   Cosponsors (1)
Committees: House Ways and Means
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

6. [112nd] H.R.62: To amend the Internal Revenue Code of 1986 to reduce international tax avoidance and restore a level playing field for American businesses.
Sponsor: Rep Doggett, Lloyd [TX-25] (introduced 1/5/2011)   Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

7. [112nd] H.R.63: To amend the Internal Revenue Code of 1986 and title XIX of the Social Security Act to reform the provision of long-term care insurance.
Sponsor: Rep Doggett, Lloyd [TX-25] (introduced 1/5/2011)   Cosponsors (1)
Committees: House Energy and Commerce; House Ways and Means
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

8. [112nd] H.R.64: To amend the Internal Revenue Code of 1986 to prevent corporations from exploiting tax treaties to evade taxation of United States income.
Sponsor: Rep Doggett, Lloyd [TX-25] (introduced 1/5/2011)   Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

9. [112nd] H.R.65: To amend the Internal Revenue Code of 1986 to provide for the taxation of smokeless tobacco products sold as discrete single-use units.
Sponsor: Rep Doggett, Lloyd [TX-25] (introduced 1/5/2011)   Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

10. [112nd] H.R.66: To amend the Internal Revenue Code of 1986 to provide for an investment tax credit for waste-to-energy facilities.
Sponsor: Rep Doggett, Lloyd [TX-25] (introduced 1/5/2011)   Cosponsors (3)
Committees: House Ways and Means
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

11. [112nd] H.R.88: To amend the Internal Revenue Code of 1986 to change the deadline for income tax returns for calendar year taxpayers from the 15th of April to the first Monday in November.
Sponsor: Rep Bartlett, Roscoe G. [MD-6] (introduced 1/5/2011)   Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

12. [112nd] H.R.99: To amend the Internal Revenue Code of 1986 to reduce taxes by providing an alternative determination of income tax liability for individuals, repealing the estate and gift taxes, reducing corporate income tax rates, reducing the maximum tax for individuals on capital gains and dividends to 10 percent, indexing the basis of assets for purposes of determining capital gain or loss, creating tax-free accounts for retirement savings, lifetime savings, and life skills, repealing the adjusted gross income threshold in the medical care deduction for individuals under age 65 who have no employer health coverage, and for other purposes.
Sponsor: Rep Dreier, David [CA-26] (introduced 1/5/2011)   Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

13. [112nd] H.R.110: To amend the Internal Revenue Code of 1986 to allow manufacturing businesses to establish tax-free manufacturing reinvestment accounts to assist them in providing for new equipment and facilities and workforce training.
Sponsor: Rep DeLauro, Rosa L. [CT-3] (introduced 1/5/2011)   Cosponsors (1)
Committees: House Ways and Means
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

14. [112nd] H.R.119: To prohibit the hiring of additional employees by the Internal Revenue Service to implement, administer, or enforce health insurance reform.
Sponsor: Rep Fleming, John [LA-4] (introduced 1/5/2011)   Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

15. [112nd] H.R.123: To amend the Internal Revenue Code of 1986 to make certain tax relief permanent, and to repeal the estate tax.
Sponsor: Rep Gingrey, Phil [GA-11] (introduced 1/5/2011)   Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

16. [112nd] H.R.131: To amend the Internal Revenue Code of 1986 to provide a 5-year extension for the real property standard deduction and to adjust such deduction for inflation.
Sponsor: Rep Holt, Rush D. [NJ-12] (introduced 1/5/2011)   Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

17. [112nd] H.R.132: To amend the Internal Revenue Code of 1986 to increase the credit for research expenses for 2011 and 2012 and to allow the credit to be assigned.
Sponsor: Rep Holt, Rush D. [NJ-12] (introduced 1/5/2011)   Cosponsors (1)
Committees: House Ways and Means
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

18. [112nd] H.R.133: To amend the Internal Revenue Code of 1986 to allow a credit against income tax for equity investments in high technology small business concerns.
Sponsor: Rep Holt, Rush D. [NJ-12] (introduced 1/5/2011)   Cosponsors (1)
Committees: House Ways and Means
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

19. [112nd] H.R.134: To amend the Internal Revenue Code to make permanent the credit for increasing research activities.
Sponsor: Rep Holt, Rush D. [NJ-12] (introduced 1/5/2011)   Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

20. [112nd] H.R.135: To amend the Internal Revenue Code of 1986 to encourage teachers to pursue teaching science, technology, engineering, and math subjects at elementary and secondary schools.
Sponsor: Rep Holt, Rush D. [NJ-12] (introduced 1/5/2011)   Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

21. [112nd] H.R.136: To amend the Internal Revenue Code of 1986 to allow taxpayers to designate a portion of their income tax payment to provide assistance to homeless veterans, and for other purposes.
Sponsor: Rep Israel, Steve [NY-2] (introduced 1/5/2011)   Cosponsors (3)
Committees: House Ways and Means; House Veterans' Affairs
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the Committee on Ways and Means, and in addition to the Committee on Veterans' Affairs, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

22. [112nd] H.R.143: To amend the Internal Revenue Code of 1986 to repeal the estate tax and retain stepped-up basis at death.
Sponsor: Rep Latta, Robert E. [OH-5] (introduced 1/5/2011)   Cosponsors (11)
Committees: House Ways and Means
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

23. [112nd] H.R.148: To amend title II of the Social Security Act and the Internal Revenue Code of 1986 to provide prospectively that wages earned, and self-employment income derived, by individuals who are not citizens or nationals of the United States shall not be credited for coverage under the old-age, survivors, and disability insurance program under such title, and to provide the President with authority to enter into agreements with other nations taking into account such limitation on crediting of wages and self-employment income.
Sponsor: Rep Paul, Ron [TX-14] (introduced 1/5/2011)   Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

24. [112nd] H.R.149: To amend the Internal Revenue Code of 1986 to repeal the 1993 increase in taxes on Social Security benefits.
Sponsor: Rep Paul, Ron [TX-14] (introduced 1/5/2011)   Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

25. [112nd] H.R.150: To amend the Internal Revenue Code of 1986 to repeal the inclusion in gross income of Social Security benefits.
Sponsor: Rep Paul, Ron [TX-14] (introduced 1/5/2011)   Cosponsors (None)
Committees: House Ways and Means.
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

26. [112nd] H.R.158: To amend the Internal Revenue Code of 1986 to repeal certain limitations on the expensing of section 179 property, to allow taxpayers to elect shorter recovery periods for purposes of determining the deduction for depreciation, and for other purposes.
Sponsor: Rep Sessions, Pete [TX-32] (introduced 1/5/2011)   Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

27. [112nd] H.R.161: To amend the Internal Revenue Code of 1986 to allow Head Start teachers the same above-the-line deduction for supplies as is allowed to elementary and secondary school teachers.
Sponsor: Rep Shuler, Heath [NC-11] (introduced 1/5/2011)   Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

28. [112nd] H.R.170: To amend the Internal Revenue Code of 1986 to exclude from gross income certain interest amounts received by individuals.
Sponsor: Rep Stearns, Cliff [FL-6] (introduced 1/5/2011)   Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

29. [112nd] H.R.171: To amend the Internal Revenue Code of 1986 to allow a deduction for amounts paid for health insurance and prescription drug costs of individuals.
Sponsor: Rep Stearns, Cliff [FL-6] (introduced 1/5/2011)   Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

30. [112nd] H.R.185: To amend the Internal Revenue Code of 1986 to permanently reduce individual income tax rates.
Sponsor: Rep Wilson, Joe [SC-2] (introduced 1/5/2011)   Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

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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