Daily Tax Update - September 4, 2012: Democratic National Convention Begins Today

DEMOCRATIC NATIONAL CONVENTION BEGINS TODAY: The Democratic National Convention will be held in Charlotte, North Carolina on September 4-6. President Obama and Vice President Biden will accept the Democratic nominations for President and Vice President on Thursday.

  • On the issue of taxes, the Democratic platform (Moving America Forward) states, "President Obama and Democrats in Congress cut taxes for every working family, putting more money in the pockets of Americans who need it most. A typical family has saved $3,600 during his first term. Now he’s fighting to stop middle class families and those aspiring to join the middle class from seeing their taxes go up and to extend key tax relief for working families and those paying for college, while asking the wealthiest and corporations to pay their fair share. That is why we will always vigorously oppose the type of tax reform supported by Mitt Romney, which independent experts have found would require raising taxes on typical families with children by at least $2,000 if it were paid for. At the same time, Mitt Romney’s plan would cut taxes for those making over $3 million by an average of $250,000 and would create incentives that will lead to hundreds of thousands of jobs going overseas at the expense of American workers."
  • On the issue of insourcing, the platform states, "The Democratic Party believes in insourcing so that America can out-build the rest of the world again. We want to cut tax breaks for companies that are shipping jobs overseas and for special interests, and instead offer tax breaks to companies that are investing right here in the United States of America, betting on American workers who are making American products we sell to the world that are stamped with three proud words: Made in America. Our strategy is paying off. After decades of watching American companies take jobs to other countries, we’re beginning to see entrepreneurs and manufactures make the decision to keep factories and production facilities here in the United States — and even bring jobs back from overseas."  The platform continues, "But the Republican Party has nominated a man whose firm invested in companies that were pioneers of outsourcing – and whose plans would actually encourage outsourcing by eliminating all taxes on the foreign profits of U.S. companies. There is more to do. We Democrats support lowering the corporate tax rate while closing unnecessary loopholes, and lowering rates even further for manufacturers who create good jobs at home."
  • Moving America Forward Platform

MISCELLANEOUS GUIDANCE RELEASED:

Revenue Procedure 2012-39:  Changes in method of accounting by taxpayers that engage in corporate reorganizations or tax-free liquidations described in Section 381(a) of the tax code and that occur on or after Aug. 31, 2011.

The IRS has issued proposed regulations (REG-126770-06) regarding the treatment of negative additional costs under section 263A.  The regulations apply to taxpayers that allocate costs under the simplified production method or the simplified resale method of the section 263A regulations.  The regulations can be accessed here.

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.