Daily Tax Update - April 4, 2011: Joint Committee On Taxation To Convene Discussion On Tax Reform

JOINT COMMITTEE ON TAXATION TO CONVENE DISCUSSION ON TAX RFORM:  On April 6, Joint Committee on Taxation (JCT) Chairman Dave Camp and Vice Chairman Max Baucus will hold a meeting of the Joint Committee for a roundtable discussion on ideas for reforming the US Internal Revenue Code.

  • The two committees considering comprehensive tax reform – the House Ways and Means Committee and the Senate Finance Committee – will hear directly from two architects of the 1986 tax reform plan: The Honorable James A. Baker III and The Honorable Richard “Dick” Gephardt on lessons learned from the 1986 reform effort as they again consider reform.

BAUCUS TO EXAMINE TAX ADMINISTRATION PRACTICES FROM AROUND THE WORLD:  On April 12, the Senate Finance Committee will continue its series of hearings on tax reform.   The upcoming hearing is titled, “Best Practices in Tax Administration: A Look across the Globe.” Committee Chairman Max Baucus will look at both corporate and individual taxes and find examples of the tax administration practices that work best.  He will consider what makes these practices so successful and how the Internal Revenue Service (IRS) could benefit from them.  Baucus will examine various aspects of tax administration, including how countries narrow the tax gap, how they ensure that tax incentives properly encourage their intended investments and how they minimize the stress and overhead costs involved in paying taxes.  Baucus will also ask how other nations build and maintain a positive relationship between taxpayers and government and what steps the IRS could take to improve that relationship here in the United States. The witnesses at the hearing will be:

  • Mr. Michael Brostek, Director, Tax Policy and Administration, Strategic Issues, Government Accountability Office
  • Mr. Brian Erard, Ph.D, B.E. & Associates
  • Mr. Michael Gaffney, Tax Partner, PricewaterhouseCoopers

MISCELLANEOUS GUIDANCE RELEASED TODAY:
Revenue Procedure 2011-22 provides a safe harbor method of accounting for determining the recovery periods for depreciation of certain tangible assets used by wireless telecommunications carriers. The revenue procedure also explains how a taxpayer may obtain automatic consent from the Commissioner of Internal Revenue to change to the safe harbor method of accounting provided.

Revenue Procedure 2011-27 provides two alternative safe harbor approaches that taxpayers may use to determine whether expenditures to maintain, replace, or improve wireline network assets must be capitalized under § 263(a) of the Internal Revenue Code: a network asset maintenance allowance method or a units of property method. This revenue procedure also provides procedures for obtaining automatic consent to change to either safe harbor method of accounting permitted by the revenue procedure.

Revenue Procedure 2011-28 provides two alternative safe harbor approaches that taxpayers may use to determine whether expenditures to maintain, replace, or improve wireless network assets must be capitalized under § 263(a) of the Internal Revenue Code: a network asset maintenance allowance method or a units of property method. This revenue procedure also provides procedures for obtaining automatic consent to change to either safe harbor method of accounting permitted by the revenue procedure.

TAX BILLS INTRODUCED APRIL 1ST:
1. [112nd] H.R.1310: To amend the Internal Revenue Code of 1986 to exempt certain emergency medical devices from the excise tax on medical devices, and for other purposes.
Sponsor: Rep Turner, Michael R. [OH-3] (introduced 4/1/2011) Cosponsors (9)
Committees: House Ways and Means
Latest Major Action: 4/1/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

2. [112nd] H.R.1312: To amend the Internal Revenue Code of 1986 to allow an increased work opportunity credit with respect to recent veterans, and for other purposes.
Sponsor: Rep King, Peter T. [NY-3] (introduced 4/1/2011) Cosponsors (7)
Committees: House Ways and Means; House Veterans' Affairs
Latest Major Action: 4/1/2011 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.

3. [112nd] H.R.1313: To amend the Internal Revenue Code of 1986 to encourage investment in certain industries by providing an exclusion from tax on certain gains.
Sponsor: Rep Polis, Jared [CO-2] (introduced 4/1/2011) Cosponsors (1)
Committees: House Ways and Means
Latest Major Action: 4/1/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

4. [112nd] H.R.1327: To amend the Internal Revenue Code of 1986 to provide for collegiate housing and infrastructure grants.
Sponsor: Rep Gerlach, Jim [PA-6] (introduced 4/1/2011) Cosponsors (5)
Committees: House Ways and Means
Latest Major Action: 4/1/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

5. [112nd] H.R.1329: To amend the Internal Revenue Code of 1986 to make the credit for research activities permanent and to provide an increase in such credit for taxpayers whose gross receipts are predominantly from domestic production activities.
Sponsor: Rep Lance, Leonard [NJ-7] (introduced 4/1/2011) Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 4/1/2011 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.

STEPTOE & JOHNSON LLP - TAX PRACTICE
Steptoe & Johnson LLP has one of the largest and most diverse law firm tax practices in the country.  The practice covers the entire spectrum of federal taxation, including representation of businesses before the Congress, Treasury and the national office of the IRS; transactional planning for domestic and multinational corporations; complex audit and controversy work for corporations and other business interests contesting IRS adjustments; litigation before the Tax Court, Court of Federal Claims, district courts, courts of appeals and the Supreme Court.  The firm's tax practice also encompasses all aspects of employee benefits (ERISA), executive compensation, tax-exempt organizations and charitable giving.  Steptoe has an extensive state and local tax practice, representing an array of business clients on complex sales and use tax, corporate income tax and property tax matters, both advising those clients and handling audits, administrative appeals, and litigation for them.  Read more information on Steptoe's tax practice.