Tax News

CCH (cch.taxgroup.com) reports:

The House Ways and Means Committee on April 9 voted 35 to 5 to approve the Housing Assistance Tax Bill of 2008 (HR 5720). Introduced by Chairman Charles B. Rangel, D-N.Y., the bill was amended during the markup session to boost the amount of first-time homebuyer tax credit assistance for married couples. The committee also voted to broaden the impact of provisions affecting the low-income housing tax credit program to allow greater access for renters to affordable housing. Rangel said the legislation, which is likely to reach the House floor by the end of April, would make it easier for families to purchase homes or avoid foreclosure.
Under the bill, the proposed first-time homebuyer credit would begin to phase out for married individuals filing jointly at $140,000, up from the $110,000 originally included in the legislation. Instead of a fixed 9-percent housing tax credit, the bill would allow a floating rate and also create a credit floor using the 12-month average of the credit from the previous calendar year. The bill would also suspend for five years the current law requirement to post a housing tax credit recapture bond, at which time Congress would reevaluate whether the requirement should be permanently repealed.
Although he supported changes to the first time homebuyer tax credit, Ways and Means ranking member Jim McCrery, R-La., said that he was concerned that the homebuyer tax credit provision would encourage people to purchase homes that they cannot afford. He also expressed concern that the low-income housing tax credit provisions would benefit developers without resulting in the development of more affordable housing.
In a separate action, the committee also voted 23 to 17 to approve Taxpayer Assistance and Simplification Bill of 2008 (HR 5719). The bill is scheduled for consideration on the House floor during the week of April 15. Among its provisions, the bill would require the IRS to notify taxpayers if it suspects theft of a taxpayer's identity and repeal the IRS's authority to use private debt collection companies to collect federal taxes. The bill would also allow IRS employees to refer taxpayers to qualified low-income taxpayer clinics, and authorize funding for Volunteer Income Tax Assistance programs.
Senate Action Postponed
The Senate on April 9 postponed action on its housing stimulus package, the Foreclosure Prevention Bill of 2008 (HR 3221), opting to resume consideration of two amendments to the legislation, including a $6 billion renewal of expiring energy tax incentives, on April 10.
White House Meeting
Congressional leaders on April 9 met with President Bush to discuss their legislative priorities. In the housing area, Senate Majority Leader Harry Reid, D-Nev., stressed President Bush must work with congressional Democrats to address the housing crisis. Reid said it was "time to focus on Main Street," noting the housing market is expecting 3 million more foreclosures and 9 million mortgages worth more than the value of the homes. The administration has raised several concerns about the Senate stimulus package, contending that it would benefit lenders and speculators at the expense of homeowners who have met their mortgage obligations.
Earlier in the day, administration announced it was expanding the scope of its mortgage assistance program, FHASecure, for sub-prime borrowers facing foreclosure. In August 2007, FHA modified its refinancing program to help creditworthy homeowners who missed payments after their adjustable rate mortgages reset. Under the new plan, the Federal Housing Administration (FHA) would have greater flexibility to insure mortgages, including those for borrowers who were late on a few payments or received a voluntary mortgage principal write-down from their lender.
By Jeff Carlson, Stephen K. Cooper and Paula Cruickshank, CCH News Staff
Ways and Means Release: Ways and Means Passes Taxpayer Assistance and Simplification Act of 2008
Amendment in the Nature of a Substitute to HR 5719
Taxpayer Assistance and Simplification Bill of 2008 (Introduced)
Amendment in the Nature of a Substitute to HR 5720
Ways and Means Summary of HR 5719, the Taxpayer Assistance and Simplification Act of 2008
Ways and Means Summary of HR 5720, the Housing Assistance Tax Act of 2008
JCT Description of the Taxpayer Assistance and Simplification Act of 2008, JCX-26-08
JCT Description of the Housing Assistance Tax Act of 2008, JCX-27-08
JCT Description of the Chairman's Amendment in the Nature of a Substitute to HR 5719, the Taxpayer Assistance and Simplification Act of 2008, JCX-28-08
JCT Description of the Chairman's Amendment in the Nature of a Substitute to HR 5720, the Housing Assistance Tax Act of 2008, JCX-29-08
JCT Estimated Revenue Effects of the Chairman's Amendment in the Nature of a Substitute to HR 5719, the Taxpayer Assistance and Simplification Act of 2008, JCX-30-08
JCT Estimated Revenue Effects of the Chairman's Amendment in the Nature of a Substitute to HR 5720, the Housing Assistance Tax Act of 2008, JCX-31-08