Daily Tax Update - April 18, 2012: White House Issues Veto Threat For Cantor’s Small Business Tax Cut Bill

WHITE HOUSE THREATENS VETO OF CANTOR’S SMALL BUSINESS TAX CUT BILL:  The Administration has issued a Statement of Administration Policy (HR 9) opposing a small business tax cut bill by House Majority Leader Eric Cantor (R-VA).  The Administration called it a $46 billion "giveaway" to the "most fortunate."  The House is schedule to consider Cantor’s bill tomorrow.  The Administration’s statement said, "The Administration strongly opposes House passage of H.R. 9.  The President believes that small business tax relief can promote hiring workers and increasing investment here at home.  H.R. 9, however, is not focused on cutting taxes for small businesses, but instead would provide tax cuts to the most fortunate.  Under the bill’s definition of income, many of the 'small businesses' that would receive the largest tax breaks are law partners, consultants, and other wealthy individuals and corporations with the biggest profits.  The proposal is a giveaway that will cost $46 billion and could, in fact, lead to delays and reductions in investment and hiring."

  • Cantor countered, "We believe you ought to reduce taxes on small businesses to create jobs," he said. "If we are going to get people back to work, we have got to help the job engine that produces those jobs, which is small businesses."

MISCELLANEOUS GUIDANCE RELEASED:

Notice 2012-29 announces that the IRS and the Treasury Department anticipate issuing guidance relating to the applicability of the normal retirement age rules to governmental plans.  The guidance under consideration would clarify that governmental plans that do not provide for in-service distributions before age 62 do not need to have a definition of normal retirement age.  The guidance would also modify the age-50 safe harbor for qualified public safety employees.  In addition, the notice announces that the IRS and the Treasury Department intend to extend the effective date of the normal retirement age regulations for governmental plans.  The notice includes a request for public comment.

TAX BILLS INTRODUCED APRIL 17TH:

1. [112th] H.R.4368 : To amend the Internal Revenue Code of 1986 to provide for the release of Federal tax levies which cause business hardship.
Sponsor: Rep McDermott, Jim [WA-7] (introduced 4/17/2012)      Cosponsors (7)
Committees: House Ways and Means
Latest Major Action: 4/17/2012 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

2. [112th] H.R.4372 : To amend the Internal Revenue Code of 1986 to require the social security number of the student and the employer identification number of the educational institution for purposes of education tax credits, to permanently allow disclosure of return information to prison officials to prevent prisoners from filing false and fraudulent tax returns, and for other purposes.
Sponsor: Rep Black, Diane [TN-6] (introduced 4/17/2012)      Cosponsors (7)
Committees: House Ways and Means
Latest Major Action: 4/17/2012 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

3. [112th] H.R.4373 : To amend the Internal Revenue Code of 1986 to make permanent the expansion of tax benefits for adoption enacted in 2001 and to permanently reinstate the expansion of tax benefits for adoption enacted in 2010.
Sponsor: Rep Braley, Bruce L. [IA-1] (introduced 4/17/2012)      Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 4/17/2012 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

4. [112th] H.R.4374 : To amend the Internal Revenue Code of 1986 to extend the increased limitation on the cover over of the tax on distilled spirits to Puerto Rico and the Virgin Islands.
Sponsor: Rep Christensen, Donna M. [VI] (introduced 4/17/2012)      Cosponsors (1)
Committees: House Ways and Means
Latest Major Action: 4/17/2012 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

5. [112th] H.R.4376 : To amend the Internal Revenue Code of 1986 to deny all deductions for business expenses associated with the use of a club that discriminates on the basis of sex, race, or color.
Sponsor: Rep Maloney, Carolyn B. [NY-14] (introduced 4/17/2012)      Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 4/17/2012 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

6. [112th] H.RES.620 : Providing for consideration of the bill (H.R. 9) to amend the Internal Revenue Code of 1986 to provide a deduction for domestic business income of qualified small businesses.
Sponsor: Rep Sessions, Pete [TX-32] (introduced 4/17/2012)      Cosponsors (None)
Committees: House Rules
House Reports: 12Ð-447
Latest Major Action: 4/17/2012 Placed on the House Calendar, Calendar No. 126.

7. [112th] S.2287 : A bill to amend the Internal Revenue Code of 1986 to allow a credit against income tax for contributions to a trust used to provide need-based college scholarships.
Sponsor: Sen Coons, Christopher A. [DE] (introduced 4/17/2012)      Cosponsors (None)
Committees: Senate Finance
Latest Major Action: 4/17/2012 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
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