Daily Tax Update - January 19, 2011: House Votes To Repeal Health Care Law

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

HOUSE PASSES BILL TO REPEAL HEALTH CARE LAW:  Today, the House voted to repeal the "Job-Killing Health Care Law Act" or "ObamaCare" as referred to by Republicans.   The vote was 245 to 189.

  • House Republicans are then expected to begin a piecemeal effort to dismantle the bill by trying to cut off funding for the various provisions in the bill through the appropriations process.  House Majority Leader Eric Cantor said, "We’ll do everything we can to delay and defund the provisions of the bill so that we can get some discussion going on how we can replace it."  House Speaker John Boehner said, "The Congress can do better in terms of replacing ObamaCare with common-sense reforms that will bring down the cost of health insurance and expand access for more Americans."
  • Senate Democrats have said that they will block any effort to repeal the health care law in the Senate and are not expected to take it up on the Senate floor.  House Majority Leader Eric Cantor criticized Senate Majority Leader Harry Reid, who has said he won't even take up the repeal measure.  Cantor said, "I've got a problem with the assumption here that somehow the Senate can be a place for a legislation to go into a cul-de-sac or a dead end.  The American people deserve a full hearing. They deserve to see this legislation go to the Senate for a full vote."
  • The President said that he was "willing and eager" to work with Congress on improving the existing law but added, "but we can’t go backward."
  • In other news, Senate Finance Committee member and Budget Committee Chairman Kent Conrad (D-ND) announced yesterday that he would not seek re-election in 2012. 

WITNESSES ANNOUNCED FOR TOMORROW'S TAX REFORM HEARING:  The witnesses for the House Ways and Means Committee's hearing on fundamental tax reform include: Nina Olson, the National Taxpayer Advocate; Robert McDonald, the Chief Executive of Procter & Gamble; Warren Hudak, owner of a Pennsylvania firm focusing on small business accounting; Kevin Hassett of the American Enterprise Institute; and Martin Sullivan, a contributing editor to Tax Analysts. 

  • In advance of tomorrow's hearing, the Joint Committee on Taxation has released a report titled, "Present Law And Historical Overview Of The Federal Tax System."
  • The document can be accessed here

MISCELLANEOUS GUIDANCE RELEASED:
Revenue Ruling 2011-4 provides various prescribed rates for federal income tax purposes including the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate, the adjusted federal long-term tax-exempt rate. These rates are determined as prescribed by § 1274. The rates are published monthly for purposes of sections 42, 382, 412, 1288, 1274, 7520, 7872, and various other sections of the Internal Revenue Code.

Notice 2011-10 (released January 18) provides rules under which taxpayers may make a one-time claim for payment of the credits and payments allowable under §§ 6426 and 6427 of the Internal Revenue Code for biodiesel (including renewable diesel) mixtures, alternative fuels, and alternative fuel mixtures sold or used during calendar year 2010.

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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