Daily Tax Update - July 8, 2011: Sunday Key Date In Debt Limit Negotiations

SUNDAY KEY DATE IN DEBT LIMIT NEGOTIATIONS -- BOEHNER:  SERIOUS DISAGREEMENTS EXIST:  House Speaker John Boehner and Senate GOP leader Mitch McConnell said that they would know by Sunday if an agreement can be reached with President Obama on deficit reduction and the debt ceiling.  A Republican Senator said, "What they said is they expect to have an agreement or no agreement by Sunday.  If there’s going to be an agreement, we’ll have it by Sunday.  We almost have to have it by Sunday in order to get it written, debated, voted on and enacted by the end of July."  Obama has said that he would veto a short-term debt ceiling increase.

  • Today, Boehner downplayed expectations for an agreement.  The Speaker said, "There are a lot of conversations continuing but I don't, in all honesty… I don't think this problem has narrowed at all in the last several days.  It's not like there's some imminent deal about to happen.  There are serious disagreements about how to deal with this very serious problem."  Boehner added, "While some think we can go past August 2, I frankly think it puts us in an awful lot of jeopardy and puts our economy in jeopardy, risking even more jobs. I believe it's important we come to an agreement but it has to be an agreement that really does fundamentally change the spending and our debt situation."

SENATE PASSES NON-BINDING RESOLUTION ON MILLIONAIRES TAX:  Yesterday, the Senate voted 74 to 22 to advance a non-binding resolution that would express the "sense of the Senate" that Americans who earn $1 million or more per year should pay a greater share of taxes.  The resolution required 60 votes to advance.  Senate Republican Leader Mitch McConnell said that although he opposed the resolution he viewed the vote as an opportunity to force vulnerable Democratic incumbents to take tough votes on raising taxes.  McConnell said, "I oppose the resolution, but I’ll vote to move to it so we can finally have a real debate about ... the economic crisis we face."  The sense of the Senate resolution contains no specific recommendations on how much taxes should be raised on high-income earners, and is simply a recommendation that those taxpayers pay more.

TAX BILLS INTRODUCED JULY 7TH:

1. [112nd] H.R.2443 : To amend the Internal Revenue Code of 1986 to increase the limitation on expensing certain depreciable assets for certain businesses that hire veterans.
Sponsor: Rep Miller, Jeff [FL-1] (introduced 7/7/2011) Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 7/7/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

2. [112nd] H.R.2454 : To amend the Internal Revenue Code of 1986 to make residents of Puerto Rico with one child or two children eligible for the refundable portion of the child tax credit.
Sponsor: Rep Pierluisi, Pedro R. [PR] (introduced 7/7/2011) Cosponsors (9)
Committees: House Ways and Means
Latest Major Action: 7/7/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

3. [112nd] S.1337 : A bill to amend the Internal Revenue Code of 1986 to permanently extend existing elective tax treatment for Alaska Native Settlement Trusts.
Sponsor: Sen Murkowski, Lisa [AK] (introduced 7/7/2011) Cosponsors (1)
Committees: Senate Finance
Latest Major Action: 7/7/2011 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
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.