Daily Tax Update - December 28, 2012: President Obama - "Hour For Immediate Action Is Here"

PRESIDENT OBAMA – “HOUR FOR IMMEDIATE ACTION IS HERE”:  Late today, in a press conference following a meeting with key Congressional leaders on the "fiscal cliff,"  President Obama said, "The hour for immediate action is here.  It is now."  Obama said that it was a "good and constructive discussion" and he was "modestly optimistic" that a deal could still get done.  However, Obama expressed frustration for the last-minute negotiations, stating, "This is déjà vu all over again" and he added that, "outside of Washington, nobody understands how it is that this seems to be a repeat pattern." 

  • Obama added, "If an agreement isn’t reached in time between Sen. Reid and Sen. McConnell, then I will urge Sen. Reid to bring to the floor a basic package for an up-or-down vote."
  • The Senate will try to put together a plan this weekend to avert the fiscal cliff.  Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell said they hope to have a plan ready when the Senate and House reconvene.  McConnell said, "We'll be working hard to try to see if we can get there in the next 24 hours."  If the Senate can't agree on a plan, Obama said that he will ask Reid to simply put a plan on the floor that would stop tax hikes for the middle class. Reports indicate that the Senate proposal could include an extension of tax rates for household income under $400,000, an extension of unemployment insurance, no change to the estate tax, no money for infrastructure and no resolution to the impending debt ceiling standoff.
  • A statement from House Speaker John Boehner’s office said, "The Speaker told the President that if the Senate amends the House-passed legislation and sends back a plan, the House will consider it -- either by accepting or amending. The group agreed that the next step should be the Senate taking bipartisan action."

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.