Daily Tax Update - June 17, 2011: Ways and Means Announces Hearing on Effect of Tax Reform on Foreign Investment

WAYS AND MEANS ANNOUNCES HEARING ON EFFECT OF TAX REFORM ON FOREIGN INVESTMENT:  On June 23, the House Ways and Means Subcommittee on Select Revenue Measures will hold a hearing on the importance of foreign direct investment (FDI) to the U.S. economy and how tax reform might affect foreign-headquartered businesses that invest and create jobs in the United States.

  • In announcing the hearing, Subcommittee Chairman Pat Tiberi said, "Foreign direct investment is critical to growing the economy and creating jobs.  U.S. affiliates of foreign-based companies often consider themselves American businesses, and share the same concerns about U.S. tax policy as other American businesses, such as the high corporate rate.  At the same time, some tax issues are unique to foreign investment, and as part of fundamental tax reform the Subcommittee must examine those issues as well."

BIDEN NEGOTIATIONS:  "GETTING DOWN TO THE REAL HARD STUFF":  Negotiations continue on the deficit reduction/debt ceiling issue but differences on "big-ticket items" must still be reached for a bipartisan agreement.  Vice President Joe Biden said yesterday, "There are differences that are going to have to be bridged and it won't occur until the end.  We’ve gone through all those discreet elements and the really tough stuff that’s left are the really big ticket items - and philosophically big ticket items.  We’ve said, if we can agree on the pieces most important to us Democrats - revenue - we’re prepared to agree on some of the things you want in discretionary spending."  Biden added, "Everybody wants an agreement.  There’s no principal in there that doesn’t want to get an agreement that bends the curve on the long-term debt, is sufficiently realistic to get us to $4 trillion over a decade or so in terms of reduction and that in fact will meet the test that everybody has out there who is willing to vote for the debt ceiling to say, 'This is real.'"  Biden said that the negotiators will begin working "round the clock" next week to try to bridge the differences.

  • Biden added that any agreement will require Democratic and Republican votes, saying that there are some Democrats who won’t vote for any cuts and some Republicans who are demanding "60 zillion" in cuts.  Biden said, "Now we’re getting down to the real hard stuff:  I’ll trade you my bicycle for your golf clubs."
  • Rep. Chris Van Hollen (D-MD) said the group has decided that they will either have an agreement in principle by July 1 or will announce that they cannot bridge their differences.  Van Hollen said, "We have a long way to go before we resolve these issues."

MISCELLANEOUS GUIDANCE RELEASED TODAY:

Revenue Ruling 2011-14 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.

TAX BILLS INTRODUCED JUNE 16TH:

1. [112nd] H.R.2214:  To amend the Internal Revenue Code of 1986 to provide for a designation of tax overpayments to reduce the public debt, and for other purposes.
Sponsor: Rep Stivers, Steve [OH-15] (introduced 6/16/2011)   Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 6/16/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

2. [112nd] H.R.2220:  To amend the Internal Revenue Code of 1986 to assist in the recovery and development of the Virgin Islands by providing for a reduction in the tax imposed on distributions from certain retirement plans' assets which are invested for at least 30 years, subject to defined withdrawals, under a Virgin Islands investment program.
Sponsor: Rep Christensen, Donna M. [VI] (introduced 6/16/2011)   Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 6/16/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

3. [112nd] H.R.2223:  To amend the Internal Revenue Code of 1986 to extend and modify the section 45 credit for refined coal from steel industry fuel, and for other purposes.
Sponsor: Rep Gerlach, Jim [PA-6] (introduced 6/16/2011)   Cosponsors (6)
Committees: House Ways and Means
Latest Major Action: 6/16/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

4. [112nd] H.R.2224:  To amend title XVIII of the Social Security Act to provide opportunities for additional residency slots in participating teaching hospitals and to expand the primary care bonus to certain underserved specialties and to amend the Internal Revenue Code of 1986 to provide tax incentives for practicing-teaching physicians.
Sponsor: Rep Grimm, Michael G. [NY-13] (introduced 6/16/2011)   Cosponsors (9)
Committees: House Ways and Means; House Energy and Commerce
Latest Major Action: 6/16/2011 Referred to House committee. Status: Referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, 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.

5. [112nd] H.R.2230:  To amend the Internal Revenue Code of 1986 to regulate and tax Internet gambling.
Sponsor: Rep McDermott, Jim [WA-7] (introduced 6/16/2011)   Cosponsors (2)
Committees: House Ways and Means; House Education and the Workforce
Latest Major Action: 6/16/2011 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.

6. [112nd] H.R.2231:  To amend the Internal Revenue Code of 1986 to terminate the ethanol tax credits, and for other purposes.
Sponsor: Rep Noem, Kristi L. [SD] (introduced 6/16/2011)   Cosponsors (2)
Committees: House Ways and Means; House Budget
Latest Major Action: 6/16/2011 Referred to House committee. Status: Referred to the Committee on Ways and Means, and in addition to the Committee on the Budget, 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.

7. [112nd] H.R.2238:  To amend the Internal Revenue Code of 1986 to modify the incentives for the production of biodiesel, and for other purposes.
Sponsor: Rep Schock, Aaron [IL-18] (introduced 6/16/2011)   Cosponsors (1)
Committees: House Ways and Means
Latest Major Action: 6/16/2011 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.

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