The IRS is expected to propose revocation of the tax-exempt status of about 20 credit counseling firms before year's end, says Martha Sullivan, IRS exempt organizations director. The companies under consideration for revocation, while few in number, represent about half the industry's revenues, IRS officials say. The IRS is currently engaged in auditing 40 credit counseling firms to determine if they should keep their tax-exempt status, Sullivan says.

FASB plans to issue final staff guidance next week on application of the term "grant date" in the awarding of employee stock-based compensation. A key term in accounting under FASB's new standard on share-based payment (Statement No. 123(R)), "grant date" is prescribed as the time at which companies gauge the awards' costs to be figured into earnings. According to a draft of the staff guidance, the definition of "grant date" in the FASB standard includes criteria for determining that a share-based payment award has been granted, and one of those criteria is that there exists "a mutual understanding by the employer and the employee of the key terms and conditions of a share-based payment award."

This article was originally printed in BNA Daily Tax Report.

The tax reform panel appointed by President Bush sets key tax preferences in its sights, forming a loose consensus to cap the employee income exclusion for employer-provided health insurance or otherwise put a lid on tax-free health care, and to pursue the idea of capping the mortgage interest deduction at a level more in line with middle-class home prices. Much of the tightening of existing tax expenditures would be done with a view toward offsetting the cost of repealing the alternative minimum tax, on which the panel agreed previously without determining how to pay for it. Panel Chairman Mack says the two ideas combined probably would not offset the $1.3 trillion, 10-year cost of AMT repeal, but that adding other elements might.

This article was originally printed in BNA Daily Tax Report.

The commissioner's concession during Tax Court proceedings that a taxpayer corporation treated its president as an employee for certain tax years did not deprive the Tax Court of jurisdiction to review the commissioner's determination of employment tax liabilities based on a finding that the taxpayer's royalty payments to its president were actually wage payments, the U.S. Court of Appeals for the Ninth Circuit rules in Charlotte's Office Boutique Inc. v. Commissioner.

This article was originally printed in BNA Daily Tax Report.

Negotiations continue in an effort to bring the Pension Security and Transparency Act (S. 1783) to the Senate floor, but optimism about getting unanimous consent for floor action before the Columbus Day recess is turning to speculation that the measure might have to wait until after the break. Sen. DeWine confirms he has a hold on the bill due to his concerns with credit rating language. DeWine is joined by Sen. Mikulski, who tells reporters she and DeWine are seeking a compromise with the bill managers over changes.

This article was originally printed in BNA Daily Tax Report.

Republican leaders of the Senate and its tax-writing committee maintain that action on a roughly $70 billion package of tax cut extensions—including for those that reduced capital gains and dividend tax rates to 15%—will go forward despite suggestions to the contrary. Senate Republican Conference Chairman Santorum says he has received assurances that the costs of the capital gains and dividends tax relief will be offset.… Meanwhile, a proposal by House Budget Chairman Nussle to amend the budget resolution (H. Con. Res. 95) to call for a 2% across-the-board cut in federal discretionary spending to help pay for the costs of Hurricane Katrina meets with a muted response from senators.

This article was originally printed in BNA Daily Tax Report.