Daily Tax Update - April 20, 2011: IRS Issues Proposed Regulations on Deferral of Losses for Members of Controlled Groups

THE DAILY TAX UPDATE WILL BE PUBLISHED ON A PERIODIC BASIS UNTIL CONGRESS RETURNS FROM ITS SPRING RECESS ON MAY 2ND. 

IRS ISSUES PROPOSED REGULATIONS ON DEFERRAL OF LOSSES FOR MEMBERS OF CONTROLLED GROUPS:  Today, the IRS issued proposed regulations under section 267(f) which provides guidance on taking into account deferred losses on the sale or exchange of property between members of a controlled group.

  • Certain losses on the sale or exchange of property between members of a controlled group, which have been deferred, are taken into account for either of two events: 1) the deferred loss is taken into account to the extent that the member acquiring the property recognizes corresponding gain with respect to the property; 2) the deferred loss is taken into account when the parties to the transaction cease to be in a controlled group relationship.
  • The regulations can be accessed here.
  • For additional information, contact Mark J. Silverman at msilverman@steptoe.com.

MISCELLANEOUS GUIDANCE RELEASED:
Announcement 2011-29 reinstates the renewal period for enrolled agents whose tax identification numbers end in 4, 5, or 6.

Rev. Rul. 2011-11 provides various prescribed rates for federal income tax purposes for May 2011 (the current month). 

TAX BILLS INTRODUCED APRIL 15TH:
1.  [112nd] H.R.1570: To amend the Internal Revenue Code of 1986 to provide a tax credit to employers for the value of the service not performed during the period employees are performing service as members of the Ready Reserve or the National Guard.
Sponsor: Rep Bilirakis, Gus M. [FL-9] (introduced 4/15/2011)      Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 4/15/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

2. [112nd] H.R.1576: To amend the Internal Revenue Code of 1986 to allow penalty-free withdrawals from individual retirement plans for adoption expenses.
Sponsor: Rep King, Peter T. [NY-3] (introduced 4/15/2011)      Cosponsors (6)
Committees: House Ways and Means
Latest Major Action: 4/15/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

3. [112nd] H.R.1583: To amend the Internal Revenue Code of 1986 to require that the Secretary of the Treasury provide a Tax Receipt to each taxpayer who files a Federal income tax return.
Sponsor: Rep McDermott, Jim [WA-7] (introduced 4/15/2011)      Cosponsors (8)
Committees: House Ways and Means
Latest Major Action: 4/15/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

4. [112nd] H.R.1593: To amend the Internal Revenue Code of 1986 to allow an unlimited exclusion from transfer taxes for certain farmland and land of conservation value, and for other purposes.
Sponsor: Rep Bishop, Timothy H. [NY-1] (introduced 4/15/2011)      Cosponsors (1)
Committees: House Ways and Means
Latest Major Action: 4/15/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

5. [112nd] H.R.1594: To amend the Internal Revenue Code of 1986 to clarify that installment sales treatment shall not fail to apply to property acquired for conservation purposes by a State or local government or certain tax-exempt organizations merely because purchase funds are held in a sinking or similar fund pursuant to State law.
Sponsor: Rep Bishop, Timothy H. [NY-1] (introduced 4/15/2011)      Cosponsors (1)
Committees: House Ways and Means
Latest Major Action: 4/15/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

6. [112nd] H.R.1595: To amend the Internal Revenue Code of 1986 to make all veterans eligible for home loans under the veterans mortgage revenue bond program.
Sponsor: Rep Blumenauer, Earl [OR-3] (introduced 4/15/2011)      Cosponsors (13)
Committees: House Ways and Means
Latest Major Action: 4/15/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

7. [112nd] H.R.1601: To amend the Internal Revenue Code of 1986 to permanently extend certain expiring provisions.
Sponsor: Rep Cuellar, Henry [TX-28] (introduced 4/15/2011)      Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 4/15/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

8. [112nd] H.R.1611: To amend the Internal Revenue Code of 1986 to provide for the designation of Clean Energy Business Zones and for tax incentives for the construction of, and employment at, energy-efficient buildings and clean energy facilities, and for other purposes.
Sponsor: Rep Grimm, Michael G. [NY-13] (introduced 4/15/2011)      Cosponsors (1)
Committees: House Ways and Means; House Small Business
Latest Major Action: 4/15/2011 Referred to House committee. Status: Referred to the Committee on Ways and Means, and in addition to the Committee on Small Business, 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.

9. [112nd] H.R.1614: To amend the Internal Revenue Code of 1986 to treat amounts paid for umbilical cord blood banking services as medical care expenses.
Sponsor: Rep Herger, Wally [CA-2] (introduced 4/15/2011)      Cosponsors (9)
Committees: House Ways and Means
Latest Major Action: 4/15/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

10. [112nd] H.R.1628: To amend the Internal Revenue Code of 1986 to impose a retail tax on disposable carryout bags, and for other purposes.
Sponsor: Rep Moran, James P. [VA-8] (introduced 4/15/2011)      Cosponsors (1)
Committees: House Ways and Means; House Natural Resources
Latest Major Action: 4/15/2011 Referred to House committee. Status: Referred to the Committee on Ways and Means, and in addition to the Committee on Natural Resources, 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.

11. [112nd] H.R.1631: To amend the Internal Revenue Code of 1986 to provide for adjustments in the individual income tax rates to reflect regional differences in the cost-of-living.
Sponsor: Rep Nadler, Jerrold [NY-8] (introduced 4/15/2011)      Cosponsors (2)
Committees: House Ways and Means
Latest Major Action: 4/15/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

12. [112nd] H.R.1634: To amend the Internal Revenue Code of 1986 to extend the financing of the Superfund.
Sponsor: Rep Pallone, Frank, Jr. [NJ-6] (introduced 4/15/2011)      Cosponsors (1)
Committees: House Ways and Means
Latest Major Action: 4/15/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

13. [112nd] H.R.1635: To amend the Internal Revenue Code of 1986 to provide special rules for investments lost in a fraudulent Ponzi-type scheme.
Sponsor: Rep Pascrell, Bill, Jr. [NJ-8] (introduced 4/15/2011)      Cosponsors (11)
Committees: House Ways and Means
Latest Major Action: 4/15/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

14. [112nd] H.R.1659: To amend the Internal Revenue Code of 1986 to modify the credit for qualified fuel cell motor vehicles and to allow the credit for certain off-highway vehicles, and for other purposes.
Sponsor: Rep Tonko, Paul [NY-21] (introduced 4/15/2011)      Cosponsors (1)
Committees: House Ways and Means
Latest Major Action: 4/15/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

15. [112nd] H.R.1661: To amend the Internal Revenue Code of 1986 to allow loans from certain retirement plans for the payment of certain small business expenses.
Sponsor: Rep Tsongas, Niki [MA-5] (introduced 4/15/2011)      Cosponsors (5)
Committees: House Ways and Means
Latest Major Action: 4/15/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

16. [112nd] H.R.1663: To amend the Internal Revenue Code of 1986 to temporarily provide the work opportunity tax credit for small businesses hiring unemployed individuals.
Sponsor: Rep West, Allen B. [FL-22] (introduced 4/15/2011)      Cosponsors (3)
Committees: House Ways and Means
Latest Major Action: 4/15/2011 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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