Daily Tax Update - February 2, 2012: Ways and Means to Hold Hearing on Effect of Tax and Financial Accounting on Tax Reform

WAYS AND MEANS TO HOLD HEARING ON EFFECT OF TAX AND FINANCIAL ACCOUNTING ON TAX REFORM:  On February 8, the House Ways and Means Committee will hold the first of two hearings on how accounting rules affect how businesses evaluate tax policy.  The first hearing will focus on the interaction of tax policy and financial accounting rules (such as Generally Accepted Accounting Principles, or "GAAP"), and how this interaction affects how publicly-traded companies respond to tax policy.  The second hearing will focus on the special challenges faced by small and closely-held businesses which, although less concerned with GAAP, confront tremendous complexity in dealing with tax accounting and related rules.

  • In announcing this hearing, Chairman Camp said, "As the Committee evaluates tax reform options intended both to make the United States a more attractive place to locate activity and to simplify tax compliance for business taxpayers, it is important to understand how financial accounting rules influence behavior.  Tax policy does not exist in isolation, and the Committee needs to understand the interaction between tax policy and accounting rules so that we make informed decisions about which policy choices will help employers grow and create jobs."

MISCELLANEOUS GUIDANCE RELEASED:

Revenue Ruling 2012-3 describes how the qualified joint and survivor annuity ("QJSA") and the qualified preretirement survivor annuity ("QPSA") rules, described in §§ 401(a)(11) and 417 of the Internal Revenue Code, apply when a deferred annuity contract is purchased under a profit-sharing plan. (It will appear in IRB 2012-8 dated Feb. 21, 2012.)

Revenue Ruling 2012-4 describes whether a qualified defined benefit pension plan that accepts a direct rollover of an eligible rollover distribution from a qualified defined contribution plan maintained by the same employer satisfies §§ 411 and 415 of the Internal Revenue Code in a case in which the defined benefit plan provides an annuity resulting from the direct rollover. (It will appear in IRB 2012-8 dated Feb. 21, 2012.)

TAX BILLS INTRODUCED FEBRUARY 1ST:

1.[112nd] H.R.3864 : To amend the Internal Revenue Code of 1986 to extend authorities relating to the Highway Trust Fund, to provide revenues for highway programs, and for other purposes.
Sponsor: Rep Camp, Dave [MI-4] (introduced 2/1/2012)      Cosponsors (None)
Committees: House Ways and Means; House Transportation and Infrastructure
Latest Major Action: 2/1/2012 Referred to House committee. Status: Referred to the Committee on Ways and Means, and in addition to the Committee on Transportation and Infrastructure, 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.

2. [112nd] H.R.3865 : To amend the Internal Revenue Code of 1986 to extend the American Opportunity Tax Credit.
Sponsor: Rep Braley, Bruce L. [IA-1] (introduced 2/1/2012)      Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 2/1/2012 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

3. [112nd] H.R.3877 : To amend the Internal Revenue Code of 1986 to prohibit the Secretary of the Treasury from requiring that taxpayers reconcile amounts with respect to reportable payment transactions to amounts related to gross receipts and sales.
Sponsor: Rep Schock, Aaron [IL-18] (introduced 2/1/2012)      Cosponsors (1)
Committees: House Ways and Means
Latest Major Action: 2/1/2012 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.