Tax News

CCH (cch.taxgroup.com) reports:

A release lists more than 40 types of business activities and relationships that will or will not create sales and use tax nexus with South Carolina. Nexus would allow the state to impose its sales and use tax on a person, activity, property, or transaction.
The activities and relationships are listed under the categories (1) general activities, (2) property in South Carolina, (3) activities of an employee or third party (e.g., a sales representative, independent contractor, or affiliated company), (4) delivery, (5) transactions with South Carolina printers, and (6) advertising.
The lists represent the Department of Revenue's responses to questions contained in two nexus surveys issued by national publications.
Subscribers to CCH Tax Research NetWork can view this release.
Revenue Ruling 07-3, South Carolina Department of Revenue, September 25, 2007.

CCH (cch.taxgroup.com) reports:

The Department of Revenue has adopted a rule allowing discretionary penalty waivers for Oregon personal income tax, corporation excise and income tax, timber severance tax, and cigarette and tobacco products tax taxpayers who believe that a penalty was imposed improperly. The following penalties are eligible for waiver under this rule:
l
the 5% penalty for failure to file a report or return by the due date;
l
the 5% penalty for failure to pay a tax by the due date;
l
the additional 20% penalty for failure to file a report or return within three months after the due date;
l
the additional 25% penalty for failure to file a report or return more than three months after the due date and the taxpayer receives a Notice of Determination and Assessment; and
l
the 100% penalty for failure to file three consecutive reports or returns by the due date of the third year.
A waiver request is timely filed if the Department receives it any time before the tax, penalty, and interest are paid in full, or up to one year after the tax, penalty, and interest are paid in full. In order to qualify for the waiver, the taxpayer must:
l
make a written request explaining the reason for the failure to file or failure to pay the tax;
l
pay the balance of the account, other than an amount equal to the penalty amount that may be waived, for the tax period for which the waiver is requested; and
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meet all filing requirements for the tax program that assessed the penalty.
The Department will waive any penalty listed above for any tax program if there are circumstances beyond the taxpayer's control that caused the failure to file or pay, and if the circumstances existed at the time the return or payment was due.
OAR 150-305.145(4), Oregon Department of Revenue, effective July 31, 2007.

CCH (cch.taxgroup.com) reports:

In an advance payment transaction (APT), a corporation overstated its foreign sales corporation's (FSC) exempt income by reporting costs using the annual accounting method instead of applying "total costs" as contemplated under the FSC administrative pricing rules. The corporation maintained that, under the annual accounting method embodied in Code Secs. 451 and 461, a matching of income and expenses was not required, and, therefore, its FSC did not have to include in its combined taxable income (CTI) calculation for the year at issue costs related to the transaction that were incurred in the following year. This had the effect of increasing the amount of the FSC's income on which the tax exemption was computed.
The IRS maintained that, in computing CTI under Temporary Reg. §1.925(a)-1T(c)(6), total costs attributable to the APT had to be included in the year at issue regardless of whether they were incurred in a later year. The IRS was granted summary judgment because the FSC exemption was designed to approximate arm's-length pricing and, therefore, the administrative pricing rules required that the transfer price not be reduced by omitting costs in computing CTI.
CCH Comment. The FSC Repeal and Extraterritorial Income Exclusion Act of 2000 ( P.L.106-519) repealed the law governing the taxation of FSCs generally effective for transactions after September 30, 2000. The rules governing the taxation of FSCs were replaced with an exclusion from gross income for extraterritorial income (ETI). The American Jobs Creation Act of 2004 (P.L.108-357
) repealed the ETI regime for post-2004 transactions subject to transitional rules in 2005 and 2006.
The Proctor & Gamble Company, DC Ohio, 2007-2 USTC ¶50,663
Other References:
Code Sec. 451
CCH Reference - 2007FED ¶21,017.80
Code Sec. 461
CCH Reference - 2007FED ¶21,817.166
Code Sec. 925
CCH Reference - 2007FED ¶28,163.50
Tax Research Consultant
CCH Reference - TRC INTLOUT: 15,350
CCH Reference - TRC INTLOUT: 15,354

CCH (cch.taxgroup.com) reports:

The IRS has modified the exclusive procedures that certain corporations must use to obtain automatic approval to change their annual accounting period under Code Sec. 442 and Reg. §1.442-1(b). The modifications apply to (1) a corporation leaving a consolidated group that wants to change its annual accounting period in the year the corporation ceases to be a member of the group; and (2) a controlled foreign corporation (CFC) that has a majority U.S. shareholder year and is properly applying to change to a one-month deferral year or to a 52-53-week tax year that references a one-month deferral year.
As modified, the procedures clarify that any corporation leaving a consolidated group is excluded from the automatic change procedures during the group's tax year in which the corporation ceases to be a group member, without regard to a change in the group's accounting period. The corporation must continue to use the group's annual accounting period unless the corporation receives approval under Rev. Proc. 2002-39, 2002-1 CB 1046, to change its accounting period, or is required to change its accounting period upon joining another consolidated group.
The modified procedures also provide that if a CFC changes to a one-month deferral year or to a 52-53-week tax year that references the one-month deferral year, it is not required to issue financial statements and reports to creditors on the basis of the requested year. However, the CFC must close its books and records as of the last day of the first effective year. In every year thereafter, the CFC must close its books and records as of the last day of the requested tax year, either a one-month deferral year or a 52-53-week tax year that references the deferral year. The CFC must also compute its income and its earnings and profits on the basis of the requested year.
Rev. Proc. 2006-45, I.R.B. 2006-45, 851, is modified and clarified.
Rev. Proc. 2007-64, 2007FED ¶46,647
Other References:
Code Sec. 442
CCH Reference - 2007FED ¶20,406.13
CCH Reference - 2007FED ¶20,406.17
Code Sec. 898
CCH Reference - 2007FED ¶27,725.20
Statement of Procedural Rules Sec. 602.204
CCH Reference - 2007FED ¶43,384.10
Tax Research Consultant
CCH Reference - TRC CONSOL: 15,052
CCH Reference - TRC CONSOL: 15,060
CCH Reference - TRC ACCTNG: 24,110
CCH Reference - TRC ACCTNG: 24,110.05
CCH Reference - TRC ACCTNG: 24,110.15
CCH Reference - TRC ACCTNG: 24,150
CCH Reference - TRC ACCTNG: 24,154
CCH Reference - TRC ACCTNG: 24,156

CCH (cch.taxgroup.com) reports:

The IRS has updated the rules for determining the amount of an employee's ordinary and necessary business expenses for lodging, meals, and incidental expenses incurred while traveling away from home that are deemed substantiated under Reg. §1.274-5. The new procedure provides transition rules for the last three months of calendar year 2007 and updates the simplified "high-low" per diem rates and the high-cost/low-cost localities.
Transition Rules
CONUS rates. Taxpayers may continue to use the current CONUS rates for the first nine months of calendar year 2007 instead of the updated GSA rates; however, they must consistently use one or the other for the period of October 1, 2007, to December 31, 2007.
Meal and incidental expenses. Taxpayers who used the federal meal and incidental expense rates for the first nine months of calendar year 2007, may not use the transportation industry rates provided in this procedure until January 1, 2008. Conversely, taxpayers who used the transportation industry rates for the first nine moths, cannot use the federal meal and incidental expense rates until January 1, 2008.
Substantiation method. Payors who used the substantiation method for the first nine months of calendar year 2007, may not use the high-low method until January 1, 2008, and vice versa. However, payors using the high-low method may use the rates and high-cost localities contained in Rev. Proc. 2006-41, I.R.B. 2006-43, 777, rather than the updated rates and localities contained in this procedure.
Per Diem Rates
The update applies to per diem allowances paid for travel on or after October 1, 2007. The simplified "high-low" per diem rates have decreased to $237 for high-cost localities and increased to $152 for low-cost localities. For purposes of applying the high-low substantiation methods and the 50-percent limitation on meal expenses, the federal meal and incidental expense rate is treated as $58 for a high-cost locality and $45 for any other locality within CONUS.
Locality Update
The following localities have been added to the list of high-cost localities: Sedona, Arizona; Napa, California; Palm Springs, California; San Diego, California; Yosemite National Park, California; Silverthorne/Breckenridge, Colorado; Incline Village/Crystal Bay/Reno/Sparks, Nevada; Conway, New Hampshire; Tarrytown/White Plains/New Rochelle/Yonkers, New York; Loudon County, Virginia; Virginia Beach, Virginia; and Lake Geneva, Wisconsin.
The portion of the year for which the following are high-cost localities has been changed: Santa Barbara, California; Crested Butte/Gunnison, Colorado; Steamboat Springs, Colorado; Telluride, Colorado; Vail, Colorado; Fort Lauderdale, Florida; Miami, Florida; Palm Beach, Florida; Cambridge/St. Michaels, Maryland; Ocean City, Maryland; Nantucket, Massachusetts; Jamestown/Middletown/Newport, Rhode Island; and Park City, Utah.
The following localities have been removed from the list of high-cost localities: New Orleans, Louisiana, and Lake Placid, New York.
Rev. Proc. 2006-41, I.R.B. 2006-43, 777, is updated.
Rev. Proc. 2007-63, 2007FED ¶46,646
Other References:
Code Sec. 162
CCH Reference - 2007FED ¶180.01
CCH Reference - 2007FED ¶1070.11
CCH Reference - 2007FED ¶8856.17
Code Sec. 274
CCH Reference - 2007FED ¶14,417.002
CCH Reference - 2007FED ¶14,417.035
CCH Reference - 2007FED ¶14,417.037
CCH Reference - 2007FED ¶14,417.038
CCH Reference - 2007FED ¶14,417.039
CCH Reference - 2007FED ¶14,417.04
CCH Reference - 2007FED ¶14,417.041
CCH Reference - 2007FED ¶14,417.421
CCH Reference - 2007FED ¶14,417.62
Tax Research Consultant
CCH Reference - TRC INDIV: 36,054.05
CCH Reference - TRC INDIV: 36,056.10
CCH Reference - TRC INDIV: 36,056.15
CCH Reference - TRC BUSEXP: 24,808
CCH Reference - TRC BUSEXP: 24,904
CCH Reference - TRC BUSEXP: 24,906.10
CCH Reference - TRC BUSEXP: 24,906.25
CCH Reference - TRC BUSEXP: 24,912.05
CCH Reference - TRC BUSEXP: 24,912.15
CCH Reference - TRC BUSEXP: 24,912.20

CCH (cch.taxgroup.com) reports:

The IRS has issued proposed regulations that provide guidance regarding changes made to the rules governing S corporations under the American Jobs Creation Act of 2004 (P.L. 108-357) and the Gulf Opportunity Zone Act of 2005 (P.L. 109-135). Proposed amendments to the regulations were also issued to conform the regulations to changes made by the Small Business Job Protection Act of 1996 (P.L. 104-188). The proposed regulations are necessary to replace obsolete references in the current regulations and to allow taxpayers to make proper use of the provisions that made changes to prior law. In particular, the proposed regulations provide guidance on: 1) the S corporation family shareholder rules; 2) the definitions of "powers of appointment" and "potential current beneficiaries" (PCBs) with regard to electing small business trusts; (ESBTs), 3) the allowance of suspended losses to the spouse or former spouse of an S corporation shareholder; and 4) relief for inadvertently terminated or invalid qualified subchapter S subsidiary (QSub) elections.
The proposed regulations also remove or amend several references in the regulations under Code Sec. 1361 that cite a specific number of permissible S corporation shareholders and add conforming language to Reg. §1.1361-1(j)(8) regarding passive activity losses and at-risk amounts of qualified subchapter S trusts.
Family Shareholders
Code Sec. 1361(c)(1) treats a husband and wife (and their estates), and all members of a family (and their estates) as one shareholder for purposes of the 100 shareholder limitation. Notice 2005-91, 2005-2 CB 1164, informed taxpayers that the Treasury Department and the IRS intended to issue guidance regarding the family shareholder election under Code Sec. 1361(c)(1) and provided that taxpayers could rely on the provisions of Notice 2005-91 until the issuance of that guidance. Although the portions of Notice 2005-91 addressing the manner of making the family shareholder election are no longer relevant, and Notice 2005-91 will be obsoleted when these proposed regulations are adopted as final, the proposed regulations retain the provisions of Notice 2005-91 describing certain entities other than individuals that will be treated as members of the family.
The regulations also clarify that the "six generation" test is applied only at the date specified in Code Sec. 1361(c)(1)((iii) for determining whether an individual meets the definition of "common ancestor," has no continuing significance in limiting the number of generations of a family that may hold stock and be treated as a single shareholder and there is no adverse consequence to a person being a member of two families.
Disregard of Unexercised Powers of Appointment in ESBTs
Code Sec. 1361(e)(2) provides that in determining an ESBT's PCBs for any period, powers of appointment will be disregarded to the extent not exercised by the end of that period. This section also increases the period from 60 days to one year during which an ESBT may safely dispose of S corporation stock after an ineligible shareholder becomes a PCB. The proposed regulations remove and replace the sections of the regulation inconsistent with current law.
The definition of "potential current beneficiary" is amended to provide that all members of a class of unnamed charities permitted to receive distributions under a discretionary distribution power held by a fiduciary that is not a power of appointment, will be considered, collectively, to be a single PCB for purposes of determining the number of permissible shareholders under Code Sec. 1361(b)(1)(A) unless the power is actually exercised, in which case each charity that actually receives distributions will also be a PCB. The ESBT election requirements under Reg. §1.1361-1(m)(2)(ii)(A) are amended to require a trust containing such a power to indicate the presence of the power in the election statement. This amended PCB definition applies only to powers to distribute to one or more members of a class of unnamed charities which is unlimited in number. The amended PCB definition does not apply to a power to make distributions to or among particular named charities.
The proposed regulations further provide that a power to add beneficiaries, whether or not charitable, to a class of current permissible beneficiaries is generally a power of appointment; thus, it will be disregarded to the extent it is not exercised. However, if the power is exercised and an unlimited class of charitable beneficiaries is added to the class of current permissible beneficiaries, that class will count as a single PCB under the amended definition of PCB and, to the extent distributions are actually made to one or more charities, those charities will each count as PCBs.
Transfer of Stock Between Spouses or Incident to Divorce
Code Sec. 1366(d)(2) provides that if the stock of an S corporation is transferred between spouses or incident to divorce under Code Sec. 1041(a), any loss or deduction with respect to the transferred stock which cannot be taken into account by the transferring shareholder in the year of the transfer because of the basis limitation in Code Sec. 1366(d)(1) shall be treated as incurred by the corporation in the succeeding tax year with regard to the transferee. The proposed regulations amend the provisions of Reg. §1.1366-2(a)(5) to include this exception to the general rule of nontransferability of losses and deductions.
QSub Relief and Inadvertent Invalid Elections or Terminations
Code Sec. 1362(f) provides that QSubs are eligible for relief for an inadvertent invalid QSub election or termination under the same standards applied to an inadvertent invalid S corporation election or termination. The proposed regulations make conforming changes to Reg. §1.1362-4 and make additional changes to Reg. §1.1362-4 addressing the change to Code Sec. 1362(f), which provided relief for corporations with inadvertently invalid S corporation elections.
Comments are requested with respect to these regulations. Written or electronic comments must be received by December 27, 2007. A public hearing is scheduled for January 16, 2008.
Proposed Regulations, NPRM REG-143326-05, 2007FED ¶49,767
Other References:
Code Sec. 1361
CCH Reference - 2007FED ¶32,022C
CCH Reference - 2007FED ¶32,024C
CCH Reference - 2007FED ¶32,025E
CCH Reference - 2007FED ¶32,025K
Code Sec. 1362
CCH Reference - 2007FED ¶32,041C
CCH Reference - 2007FED ¶32,045C
Code Sec. 1366
CCH Reference - 2007FED ¶32,080D
CCH Reference - 2007FED ¶32,082A
CCH Reference - 2007FED ¶32,082H
Tax Research Consultant
CCH Reference - TRC SCORP: 156
CCH Reference - TRC SCORP: 158
CCH Reference - TRC SCORP: 160
CCH Reference - TRC SCORP: 166
CCH Reference - TRC SCORP: 404
CCH Reference - TRC SCORP: 550

CCH (cch.taxgroup.com) reports:

The IRS has issued proposed regulations relating to the treatment of transactions involving intercompany obligations and insurance payments from one member of a group to a captive insurance member.
On December 21, 1998, the IRS issued proposed regulations (NPRM REG-105964-98) clarifying the treatment of the transfer or the extinguishment of rights under intercompany obligations. After considering comments, the IRS is withdrawing the 1998 Proposed Regulations and issuing new proposals. However, for purposes of determining the tax treatment of transactions undertaken prior to the finalization of these proposed regulations, taxpayers may continue to rely upon the form and timing of the recast transaction, as clarified by the 1998 Proposed Regulations.
Revised Deemed Satisfaction-Reissuance Model
The current regulations and the 1998 proposed regulations generally provide that an obligation is treated as satisfied and, if the obligation remains outstanding, reissued as a new obligation. This is the deemed satisfaction-reissuance model. The new proposed regulations are intended to minimize the effects of intercompany obligations on a consolidated group's taxable income.
The proposed regulations adopt new and more precise mechanics for the application of the deemed satisfaction-reissuance model to certain intragroup and outbound transactions. In general, the new model deems the following sequence of events to occur immediately before, and independently of, the actual transaction: (1) the debtor is deemed to satisfy the obligation for a cash amount equal to the obligation's fair market value; and (2) the debtor is deemed to immediately reissue the obligation to the original creditor for that same cash amount. The parties are then treated as engaging in the actual transaction but with the new obligation.
For inbound transactions, the deemed satisfaction-reissuance model mirrors the mechanics and single-entity policies underlying the Code Sec. 108(e)(4) regulations. However, the deemed satisfaction-reissuance model also applies to obligations acquired for a premium and governs the treatment of the creditor as well as the debtor.
For outbound transactions, the deemed satisfaction-reissuance model furthers single-entity treatment by treating a consolidated group as a single issuer and an intercompany obligation acquired or assumed by a nonmember as newly-issued debt. The proposed regulations provide several exceptions to the application of the deemed satisfaction-reissuance model, discussed below.
The Deemed Satisfaction-Reissuance Amount
If a transaction is an intragroup exchange of an intercompany obligation for a newly issued intercompany obligation, the proposed regulations provide that the obligation would be deemed satisfied and reissued for its fair market value. In addition, for all intragroup debt exchanges, other than routine intragroup debt modifications, the newly issued obligation would be treated as having an issue price equal to its fair market value.
If a member's amount realized with respect to an intercompany obligation results from a mark to fair market value under Code Sec. 475, then the obligation will be treated as satisfied and reissued under these regulations but will not otherwise be marked to fair market value under Code Sec. 475
immediately thereafter.
Limitations on the Application of the Deemed Satisfaction-Reissuance Model
The proposed regulations apply the model upon a "triggering transaction," which is defined as any intercompany transaction in which a member realizes an amount, directly or indirectly, from the assignment or extinguishment of all or part of its remaining rights or obligations under an intercompany obligation (or from a comparable transaction). However, the proposed regulations provide a number of exceptions from the application of the deemed satisfaction and reissuance model. One exception involves certain transfers and assumptions of intercompany obligations in intragroup exchanges to which Code Sec. 332 or Code Sec. 361 apply. These proposed regulations also provide an exception to the application of the deemed satisfaction-reissuance model for taxable intragroup sales of assets where intercompany obligations are assumed as part of the transaction. Another exception involves an intragroup transactions in which an intercompany obligation is extinguished. Also excepted are routine intragroup modifications of intercompany obligations.
These proposed regulations retain the exceptions in the current regulations for transactions involving an obligation that became an intercompany obligation by reason of an event described in Reg. §1.108-2(e), and for amounts realized from reserve accounting under Code Sec. 585. However, consistent with the 1998 Proposed Regulations, the new proposals do not include the exception in the current regulations for transactions in which the deemed satisfaction and reissuance will not have a significant effect on any person's federal income tax liability for any year.
Material Tax Benefit Rule
In order to prevent distortions that may result from the shifting of built-in items from intercompany obligations, the proposed regulations include a special rule, the material tax benefit rule, that applies to intragroup transactions otherwise excepted from the deemed satisfaction-reissuance model under the exceptions for certain intragroup nonrecognition exchanges, taxable assumption transactions, extinguishment transactions, and routine debt modifications.
The material tax benefit rule generally applies to an intragroup assignment or extinguishment that would otherwise be excepted from the deemed satisfaction-reissuance model if, at the time of the transaction, it is reasonably foreseeable (regardless of intent) that the shifting of items of built-in gain, loss, income, or deduction from an intercompany obligation between members will secure a material tax benefit that would not otherwise be enjoyed.
Off-Market Issuance Rule
These proposed regulations also include a special rule, the off-market issuance rule, that generally applies if an intercompany obligation is issued at a rate of interest that is materially off-market, and at the time of issuance, it is reasonably foreseeable that the shifting of built-in items from the obligation from one member to another member will secure a material tax benefit.
Outbound Transactions
The new proposals retain the deemed satisfaction-reissuance model, with the new mechanics applied, as well as the current exception for outbound transactions involving an obligation that became intercompany obligation in an event described in Reg. §1.108-2(e). Two new exceptions have been added.
A new "subgroup" exception provides that the deemed satisfaction and reissuance model would not apply if the creditor and debtor to an intercompany obligation cease to be members of a consolidated group in a transaction in which neither member otherwise recognize an item with respect to the intercompany obligation and, immediately after the transaction, such creditor and debtor are members of another consolidated group.
A second exception would apply to an intercompany obligation that is newly issued in an intragroup reorganization and, pursuant to a plan of reorganization, is distributed to a nonmember shareholder or creditor in a transaction to which Code Sec. 361(c) applies.
Inbound Transactions
The proposed regulations retain the deemed satisfaction-reissuance model for inbound transactions, but also include a "subgroup" exception for certain of these transactions. The subgroup exception for inbound transactions is similar to the subgroup exception for outbound transactions discussed above. In addition, the proposed regulations provide a special rule that prevents inappropriate acceleration of a deduction for repurchase premium in certain inbound transactions.
Single Entity Treatment for Significant Insurance Members
The proposed regulations provide that when a significant portion (five percent or more) of the business of the insuring member arises from insuring the risks of other members, either by issuing insurance contracts directly to members or by reinsuring risks on contracts issued to members, it is appropriate to take into account the items from the intercompany transactions on a single entity basis. In such cases, the treatment of the members' items from the insurance transactions would be subject to the matching and acceleration rules of Reg. §1.1502-13. Under these rules, the insured member's deduction and the significant insurance member's income from the transaction would generally be taken into account currently. However, the effects of the intercompany transaction would otherwise be treated in a manner comparable to "self-insurance" by a single corporation.
The proposed regulations continue to except intercompany insurance transactions from single entity treatment where intercompany insurance represents less than five percent of the insuring member's business.
Comments
Before these proposals are adopted as final regulations, consideration will be given to any written or electronic comments that are submitted timely to the IRS. Comments are specifically requested on the following:
--whether it would be beneficial to eliminate any disparity between issue price and basis created upon the issuance of an obligation (for example, by treating such obligations as issued for fair market value);
--whether additional rules are needed for instruments intercompany obligations that are not debt instruments;
--whether some or all of these exceptions discussed above are appropriate, as well as suggestions for other exceptions;
--the relationship between the intragroup off-market issuance rule and the other limitations imposed by the code and regulations on lending transactions;
--whether the exclusion from the definition of intercompany obligation of executory obligations to purchase or provide goods or services is appropriate in all instances;
--whether special rules for the treatment of intercompany obligations transferred or assumed in transactions under Code Sec. 338
are needed;
--whether gross premiums written during the tax year less return premiums and premiums paid for reinsurance is an appropriate measure of an insuring member's business, as well as suggestions for alternatives;
--whether the status of an insuring member as a "significant insurance member" should be an annual determination and whether additional rules are needed when an insuring member's status changes; and
--whether any additional special rules are needed to accomplish single entity treatment for intercompany insurance transactions.
Written or electronic comments and requests for a public hearing must be received by December 27, 2007.
Proposed Regulations, NPRM REG-107592-00, 2007FED ¶49,766
Other References:
Code Sec. 1502
CCH Reference - 2007FED ¶33,159
Tax Research Consultant
CCH Reference - TRC CONSOL: 39,202.05
CCH Reference - TRC CONSOL: 39,304.10

CCH (cch.taxgroup.com) reports:

The Senate by a vote of 67 to 29 on September 27 passed the Children's Health Insurance Program Reauthorization Act of 2007 (HR 976), which President Bush has pledged to veto. The bill passed the House on September 25 (TAXDAY, 2007/09/27, C.4). The bill would add $35 billion to the State Children's Health Insurance Program (SCHIP) over five years --for a total of $60 billion. The additional funding would be raised by a 61-cent increase in the federal tax on cigarettes and tax increases on other tobacco products, including cigars and pipe tobacco. SCHIP insures children whose parents do not qualify for Medicaid but cannot afford private insurance.
Bush in a written statement urged Congress to send him a continuing resolution extending the SCHIP program through November 16. During the evening on September 27, the Senate by a vote of 94 to 1 passed HJRes 52, a continuing appropriations bill that would fund federal government operations through November 16 and contains the temporary SCHIP extension. The House passed the measure on September 26 (TAXDAY, 2007/09/27, C.2). "We should take this time to arrive at a more rational, bipartisan SCHIP reauthorization bill that focuses on children in poor families who don't currently have insurance, rather than raising taxes to cover people who already have private insurance," the president said.
By Paula Cruickshank, CCH News Staff

Tax Analysts report: