Daily Tax Update - January 21, 2011: Bill Eliminating Patenting Of Tax Strategies To Be Introduced

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

BILL ELIMINATING PATENTING OF TAX STRATEGIES TO BE INTRODUCED:  Yesterday, Senate Finance Committee Chairman Max Baucus (D-MT) and Senator Chuck Grassley (R-IA) released language of legislation they intend to introduce to "protect taxpayers and fight tax evasion."  According to Baucus and Grassley, "The bill would prevent any individual or firm from being able to receive patents on tax strategies.  If firms or individuals were able to hold patents for these strategies, some taxpayers could face fees simply for complying with the tax code.  And, tax patents provide windfalls to lawyers and patent holders by granting them exclusive rights to use tax loopholes, which could provide some businesses with an unfair advantage." 

  • Baucus said, "Patenting common tax strategies undermines the fairness of our tax system.  Taxpayers shouldn’t have to pay royalties to others just to file their tax returns and comply with the tax code.  Tax patents would create an incentive for accountants to develop tax shelters, and worse, could give a false implication that we condone tax loopholes that violate the letter or the spirit of tax laws.  This bill will fight tax evasion and ensure all taxpayers have a right to use the tax code fairly."
  • Grassley said, "Tax patents prevent taxpayers from being able to use certain tax strategies unless they’re willing to pay for them.  It’s unfair for taxpayers to have to pay for these methods.  Also, tax patents undermine a tax system based on voluntary compliance.  Our legislation reins in the cottage industry of those trying to own tax planning strategies that should be available to everyone or that would encourage inappropriate tax avoidance."  
  • The text of the bill can be accessed here.

JOINT TAX RELEASES LIST OF EXPIRING PROVISIONS:  The Joint Committee on Taxation released its list of expiring Federal tax provisions for 2010-2020.

  • The document can be accessed here.

TAX BILLS INTRODUCED JANUARY 20TH:
1.  [112nd] H.R.369: To amend the Internal Revenue Code of 1986 to improve access to health care by allowing a deduction for the health insurance costs of individuals, expanding health savings accounts, and for other purposes.
Sponsor: Rep Austria, Steve [OH-7] (introduced 1/20/2011)      Cosponsors (13)
Committees: House Ways and Means
Latest Major Action: 1/20/2011 Referred to House committee.  
Status: Referred to the House Committee on Ways and Means.

2.  [112nd] H.R.376: To amend the Internal Revenue Code of 1986 to provide recruitment and retention incentives for volunteer emergency service workers.
Sponsor: Rep King, Peter T. [NY-3] (introduced 1/20/2011)      Cosponsors (9)
Committees: House Ways and Means; House Education and the Workforce
Latest Major Action: 1/20/2011 Referred to House committee.  
Status: Referred to the Committee on Ways and Means, and in addition to the Committee on Education and the Workforce, 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.

3.  [112nd] H.R.382:  To amend the Internal Revenue Code of 1986 to limit the deductibility of excessive rates of executive compensation.
Sponsor: Rep Lee, Barbara [CA-9] (introduced 1/20/2011)      Cosponsors (1)
Committees: House Ways and Means
Latest Major Action: 1/20/2011 Referred to House committee.
Status: Referred to the House Committee on Ways and Means.

4.  [112nd] H.R.387:  To amend the Internal Revenue Code of 1986 to provide that reimbursements for costs of using passenger automobiles for charitable and other organizations are excluded from gross income.
Sponsor: Rep Petri, Thomas E. [WI-6] (introduced 1/20/2011)      Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 1/20/2011 Referred to House committee.
Status: Referred to the House Committee on Ways and Means.

5.  [112nd] H.R.390:  To amend the Internal Revenue Code of 1986 to provide an exclusion from the gross estate for certain farmlands and lands subject to qualified conservation easements, and for other purposes.
Sponsor: Rep Thompson, Mike [CA-1] (introduced 1/20/2011)      Cosponsors (None)
Committees: House 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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