Daily Tax Update - February 3, 2012: Payroll Tax Conferees Support Inclusion of 100% Bonus Appreciation

PAYROLL TAX CONFEREES SUPPORT INCLUSION OF 100% BONUS DEPRECIATION:  The payroll tax cut extension conference committee agreed yesterday to include a 100-percent bonus depreciation provision.  The provision expired at the end of 2011 and will have to be renewed retroactively.  However, how to pay for the provision remains a sticking point.   Rep. Chris Van Hollen (D-MD), a member of the conference committee, said, "There is a very strong agreement for bonus depreciation … but there is a caveat about whether and to what extent we have to offset these things. . . it could hurt the economy in other ways."

  • House Ways and Means Committee Chairman Dave Camp reiterated his stance against including tax extenders in the payroll tax bill.  Camp said, "If it's not in the House bill and it's not in the Senate bill, then it's not before this committee."
  • Finance member Sen. Ben Cardin (D-MD) said that there are "tax extender policies we need to take up now."  Cardin added, "We need predictability in the code.  The lack of predictability costs us our economy.  I'm all for discussions of tax reform, but realistically we're not going to get that done this month.  We have a chance to get some predictability in the code, and I think we should look at these expiring tax provisions."
  • Today, Senate Majority Leader Harry Reid said that he is developing a "backup plan" to extend the payroll tax cut if the conference committee is unable to reach an agreement.  Reid said that Democrats "will not rest" until the payroll tax cut and unemployment benefits are extended.  Reid also said that he is working on a plan and "If we have to put it forward, we will."

TAX BILLS INTRODUCED FEBRUARY 2ND:

1.[112nd] H.R.3885 : To amend the Internal Revenue Code of 1986 to authorize agricultural producers to establish and contribute to tax-exempt farm risk management accounts.
Sponsor: Rep Crawford, Eric A. "Rick" [AR-1] (introduced 2/2/2012)      Cosponsors (1)
Committees: House Ways and Means
Latest Major Action: 2/2/2012 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

2. [112nd] S.2064 : A bill to amend the Internal Revenue Code of 1986 to terminate certain energy tax subsidies and lower the corporate income tax rate.
Sponsor: Sen DeMint, Jim [SC] (introduced 2/2/2012)      Cosponsors (1)
Latest Major Action: 2/2/2012 Introduced in the Senate. Read the first time. Placed on Senate Legislative Calendar under Read the First Time.

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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