Daily Tax Update - March 10, 2011: Senate Rejects House Budget Plan

SENATE REJECTS HOUSE BUDGET PLAN:  Yesterday, the Senate voted down a budget plan by House Republicans that would have cut more than $60 billion in FY 2011.  The Senate also defeated a Democratic alternative that would have cut government spending by $7 billion in FY 2011.

  • Regarding the status of the budget negotiations, House Speaker John Boehner said today, "I think it’s time for them to get serious — and they’re not serious, and it’s time to get serious about cutting spending, and the talks are going to continue but they aren’t going to get very far if they don’t get serious about doing what the American people expect them to do."  When Boehner was asked if he might be willing to compromise on the $61 billion in spending cuts approved by the House, he replied, "I’m not going to sit up here and negotiate with myself."  However, Boehner added that he was still optimistic that an agreement could be reached, stating "This is not going to be easy.  Our goal — as I’ve said many times — is to cut spending and keep the government open because cutting spending will lead to a better environment for job creation."

MISCELLANEOUS GUIDANCE RELEASED TODAY:
Notice 2011-23 addresses the requirements for tax-exemption for qualified nonprofit health insurance issuers described in Internal Revenue Code section 501(c)(29), providing guidance on the annual filing requirement for organizations that intend to apply for recognition of exempt status under section 501(c)(29) as well as the effective date of exempt status for certain applicants. The notice also includes a request for public comments.

TAX BILLS INTRODUCED MARCH 9TH:
1. [112nd] H.R.982: To amend the Internal Revenue Code of 1986 to provide a refundable credit against income tax to assist individuals with high residential energy costs.
Sponsor: Rep Owens, William L. [NY-23] (introduced 3/9/2011)      Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 3/9/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

2. [112nd] S.518: A bill to amend the Internal Revenue Code of 1986 to provide for an exclusion for assistance provided to participants in certain veterinary student loan repayment or forgiveness programs.
Sponsor: Sen Johnson, Tim [SD] (introduced 3/9/2011)      Cosponsors (13)
Committees: Senate Finance
Latest Major Action: 3/9/2011 Referred to Senate committee. Status: Read twice and referred to the Committee on Finance.

3. [112nd] S.534: A bill to amend the Internal Revenue Code of 1986 to provide a reduced rate of excise tax on beer produced domestically by certain small producers.
Sponsor: Sen Kerry, John F. [MA] (introduced 3/9/2011)      Cosponsors (18)
Committees: Senate Finance
Latest Major Action: 3/9/2011 Referred to Senate committee. Status: Read twice and referred to the Committee on Finance. 

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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