Tax News

CCH (cch.taxgroup.com) reports:

House Ways and Means Committee Chairman Charles B. Rangel, D-N.Y., is moving ahead with his plans to pass a bill that grants 23 million taxpayers relief from the alternative minimum tax (AMT) for one year. On October 30, Rangel introduced the Temporary Tax Relief Bill of 2007 (HR 3996), a bill that will be marked up by the committee on November 2 and is likely to move swiftly to the House floor for a vote. The measure also includes the extension of a host of expiring business and individual tax provisions known as the extenders.
"While this legislation provides critical tax relief to middle-class families, we must do so without adding to the deficit and forcing future generations to pay for the decisions we make today," said Rangel. The chairman plans to unveil the complete list of revenue offsets for the legislation at the committee markup.
The bill would provide AMT relief for nonrefundable personal credits, and it would increase the AMT exemption amount to $66,250 for joint filers and $44,350 for individuals. According to committee estimates, the AMT relief would cost $50.59 billion over 10 years.
The bill would also extend the research and development tax credit, the new markets tax credit and the deduction for state and local sales taxes. It would also provide mortgage forgiveness debt relief, extend the deduction for mortgage insurance, and repeal the authority of the IRS to use private debt collectors.
White House Response
President Bush lashed out at Congress for proposing "an endless series of tax increases" to pay for the AMT patch and other significant pieces of legislation, including the farm bill, energy tax legislation and a proposed expansion of the State Children's Health Insurance Program (SCHIP). Following a White House meeting with GOP congressional leaders on October 30, Bush strongly criticized federal lawmakers for failing to send him "a single appropriations bill," including the measure to provide fiscal year 2008 funding for the IRS and Treasury Department.
The continuing appropriations resolution (HJRes 52) temporarily funds all federal government operations and a short-term expansion of the SCHIP program through November 16. The stopgap measure funds the government at a pro-rated portion of the 2007 budget approved by Congress. The IRS's budget for fiscal year (FY) 2007 totaled $10.6 billion.
The IRS would operate at a pro-rated portion of this amount. The IRS's 2007 budget included $3.6 billion for taxpayer service; $4.66 billion for enforcement, $282 million for business systems modernization, and $116 million for tax research (TAXDAY, 2007/10/01, C.2).
By Stephen K. Cooper and Paula Cruickshank
Temporary Tax Relief Act of 2007, HR 3996
Temporary Tax Relief Act of 2007, Summary
House Ways and Means Committee Release: Ways And Means to Consider AMT Relief Bill
Statement by President Bush on Spending Bills