Tax News

CCH (cch.taxgroup.com) reports:

  The massive economic stimulus bill made its way through the House Ways and Means Committee on January 22, with lawmakers approving the $275 billion measure by a vote of 24 to 13. Democrats rejected dozens of GOP amendments to Chairman Charles B. Rangel's, D-N.Y., chairman's mark of the American Recovery and Reinvestment Tax Bill of 2009 (HR 598). Ranking member Dave Camp, R-Mich., said the best chance for Republican lawmakers to influence the bill is to persuade President Obama that a 5-percent income tax rate cut for taxpayers in the 10 percent and 15 percent tax brackets would be a more effective way to stimulate the economy and reach a larger number of Americans. Rangel and the House Democratic leadership believe that the $145.3 billion Making Work Pay tax credit of $500 to individuals and $1,000 to couples is a better plan.

  Rangel said the tax bill will be married to a larger spending bill package now under consideration by the House Energy and Commerce and the House Appropriations committees. The combined legislation, which will then be called the American Recovery and Reinvestment Bill (HR 1), will reach a vote on the House floor on January 28. Since the legislation is moving so quickly, without the benefit of committee hearings, Camp said that he hopes Obama will prevail on Senate lawmakers to modify the bill with their tax proposals. He acknowledged that House Speaker Nancy Pelosi, D-Calif., has tasked Rangel with moving the legislation as quickly as possible.

  In an attempt to assuage criticism of the tax proposal by GOP lawmakers, Rangel offered to hold an informal, bipartisan meeting with Republicans and Obama administration officials. The meeting, which has not been scheduled, would seek to determine an estimate of the number of jobs created by the proposed legislation. Rangel said he was forced to skip the regular hearing process in order for Congress to get a finished bill to Obama's desk before Presidents Day in February.

  The committee voted on a modified version of the tax legislation that was released by Rangel late on January 21, which revised the original version of HR 589. The Joint Committee on Taxation also released update revenue estimates of the modified legislation. The revised tax bill would allow companies a five-year carryback period for operating losses. It would expand qualified school construction bonds, qualified energy conservation tax credit bonds and recovery zone economic development bonds and recovery zone facility bonds. The measure also clarifies that Notice 2008-83, I.R.B. 2008-42, 905 (TAXDAY, 2008/10/01, I.2, which allows financial institutions to use net unrealized built-in losses after an ownership change, shall have the force and effect of law with respect to new and previously announced ownership changes of companies occurring after January 16, 2009.

  By Stephen K. Cooper, CCH News Staff

Chairman's Amendment in the Nature of a Substitute to HR 598

Summary of Changes in the Chairman's Amendment in the Nature of a Substitute to HR 598

Ways and Means Passes Economic Recovery Legislation

Neal Welcomes Ways and Means Committee Passage of Economic Stimulus Proposal

JCT Description of Title I of HR 598, the American Recovery and Reinvestment Tax Act of 2009,
JCX-5-09

JCT Description of Title III of HR 598, the Health Insurance Assistance for the Unemployed Act of 2009, JCX-6-09

JCT Estimated Budget Effects of the Revenue Provisions in Titles I and III of HR 598, the American Recovery and Reinvestment Tax Act of 2009, JCX-7-09

JCT Description of the Chairman's Amendment in the Nature of a Substitute to Titles I and III of HR 598, JCX-8-09

JCT Estimated Budget Effects of the Chairman's Amendment in the Nature of a Substitute to HR 598, the American Recovery And Reinvestment Tax Act of 2009, JCX-9-09