Legislation

Tax

Ways and Means AMT fix expected to die in Senate

Last week, the House Ways and Means Committee authored legislation that would protect millions of taxpayers from paying the Alternative Minimum Tax for 2007. The bill is to be funded by raising taxes in other areas so that the net effect of the legislation will be revenue neutral.
Tax

Supreme Court to determine state taxability of muni bonds

The United States Supreme Court is listening to arguments regarding the issue of whether interest earned on municipal bonds issued in one state should be exempt from income tax in another state.Current law in most states is that earnings on municipal bonds are tax-free in the home-state, but earnings on munis purchased out-of-state are subject to taxation in the home state.
Tax

Ways and Means passes AMT fix, Treasury not pleased

By a vote of 22-13, the House Ways and Means Committee passed legislation that would provide a patch to the Alternative Minimum Tax for the 2007 tax year. The Temporary Tax Relief Act of 2007 provides an offset to the funds that would be generated by the AMT by raising revenue in a number of areas.The TTRA would set AMT exemption amounts at $42,350 for single and head of household taxpayers, down from $42,500 in 2006, and $66,250 for married taxpayers filing jointly and surviving widow(er)s (and half that amount for married taxpayers filing separately), up from $62,550 in 2006.
Technology

Legislative leaders back 7-year extension on Internet tax ban

Leaders in the U.S. House will support extending a moratorium on taxing Internet services for another seven years, according to a leadership aide.The House had earlier approved a four-year extension, but last week, the U.S. Senate approved a seven-year extension, surprising some observers.A Democratic leadership aide told Bloomberg News that a House vote on the issue could come as early as Tuesday.
Tax

New taxes, deduction limitations to replace AMT revenue

The House Ways and Means Committee estimates that the cost of permanent repeal of the Alternative Minimum Tax (AMT) will be $795 billion over ten years, and while there is widespread agreement that the AMT should be repealed, few in Congress believe that it will be possible to make up for the lost revenue through cuts in spending.
Tax

Rangel proposes business tax changes, LIFO repeal

Business tax changes in the legislation introduced on October 24th by House Ways Committee Chairman Charles Rangel (D-NY) are designed to be revenue neutral as required by House rules, and the provision to reduce the top corporate income tax rate from 35 to 30.5 percent is offset in the bill by the repeal of the last-in, first-out (LIFO) method of accounting for inventory and changes in or the elimination of other tax breaks.Although the Senate attempted unsuccessfully to repeal the use of LIFO by oil companies in 2005 in an effort to respond to critics of the government's treatment of the
Tax

No repeal of AMT this year - one-year fix proposed

Tax legislation introduced by House Ways and Means Chairman Charles Rangel on Thursday provides a one-year extension of current Alternative Minimum Tax (AMT) relief for 2007, with a permanent repeal beyond that, but passage of the complete bill in either 2007 or 2008 is considered unlikely. Failure to enact a temporary fix will cause 21 million more taxpayers to "fall into" the AMT, Treasury Secretary Henry Paulson told Congress in a letter earlier in the week.

Pending legislation could allow bankrupts to discharge some mortgage amounts

In an effort to prevent a predicted siege of foreclosures, Representatives Brad Miller (D-NC) and Linda Sánchez (D-CA) have introduced legislation that would repeal the mortgage exception in the bankruptcy code, allowing a judge to change the priority value of primary residence mortgages or alter interest rates.Called the Emergency Home Ownership and Mortgage Equity Protection Act (H.R.
Tax

Homeowners with two homes could foot bill for foreclosure victims

The House Ways and Means Committee has approved a bill designed to provide aid to struggling homeowners who are in debt over their heads and facing foreclosure on their homes. The bill provides tax relief for homeowners whose mortgage debt is forgiven. Currently, forgiven debt is considered to be taxable income.
Education & Careers

Consolidating student loans? Proceed with caution

Before Congress voted to impose fixed interest rates on federal student loans in July 2006, the decision to consolidate student loans and lock in at the lowest average variable rate was a no-brainer for most graduates, according to a recent report in the Christian Science Monitor, but in 2007 each graduate must weigh all of the consolidation options carefully.
Tax

House passes legislation prohibiting patents on tax planning methods

The House of Representatives passed major reforms last week in the form of amending the Patent Reform Act. Hailed as the most significant change to the U.S. patent system in 50 years, the bill still faces an uphill climb as the Senate is working on its own version of patent legislation, and President Bush is seen as being lukewarm on the bill.Of most interest to accountants is one provision of the bill that prohibits patents on tax planning methods.
Tax

Mismatched numbers undermine IRS ability to close tax gap

A report issued by the Treasury Inspector General for Tax Administration (TIGTA) indicates that the IRS receives millions of income and wage statements each year that contain mismatched names and identification numbers.
Tax

House Ways and Means addresses AMT and tax code simplification

On Thursday, the House Committee on Ways and Means held a hearing on fair and equitable tax policy for America’s working families. The panel focused on the current structure of our tax code and the fairness and effectiveness of the Bush tax cuts, the alternative minimum tax (AMT) and the tax treatment of hedge funds and partners in private equity firms. Ways and Means Committee Chairman Charles B.
Tax

Minority- and women-owned businesses join forces to oppose tax increase

A consortium of minority and women business leaders in the private equity, real estate, and investment management industries has announced the formation of the Access to Capital Coalition (ACC) to oppose efforts in Congress to change tax laws in a way that would adversely affect minority and women entrepreneurs.
Tax

Congress considers changing mortgage interest deduction

Rep. John Dingell (D-MI) has plans to introduce legislation that would remove mortgage interest deductions for certain homeowners, citing a need to penalize taxpayers who consume too much energy.Dingell is drafting an energy-saving bill that is expected to include higher federal gasoline taxes and other provisions for discouraging people from adding carbon emissions to the atmosphere. Among the provisions expected to appear in the bill is the removal of the mortgage interest deduction for homeowners with houses of more than 3,000 square feet of interior space.
Community News

IBM & PwC to pay more than $5.2 million to settle kickback complaints

IBM Corporation and PricewaterhouseCoopers have together agreed to pay the United States more than $5.2 million to settle allegations that the companies solicited and provided improper payments and other things of value on technology contracts with government agencies, the Justice Department announced last week.

AICPA is looking out for rural CPA firms

The American Institute of Certified Public Accountants (AICPA) commended the U.S. House of Representatives' removal of a provision in the Farm Bill Extension Act of 2007 that would have resulted in unfair competition to small CPA firms. "The AICPA thanks House members for their vote because enacting such a provision would lead to unfair competition for CPAs, especially smaller CPA firms in agricultural communities," Barry C.
Tax

"Carried Interest" in private equity: Capital gain or performance fee?

The debate now taking place in Congress on the tax paid on "carried interest," by private equity and hedge fund managers was not triggered by the initial public offering of The Blackstone Group, the private equity firm headed by Steve Schwarztman, but details of Schwarztman's total earnings that were revealed in the filing brought increased media attention to the issues being debated.Much of the discussion in Congress and the media centers on whether the "carried interest," which is a major component of the managers' total compensation, should be taxed, as it now is, as a capital gain at 15
Tax

Increase in tobacco taxes – two sides to this story

The House of Representatives has passed legislation supporting the State Children's Health Insurance Program (SCHIP) and in so doing has voted to increase the federal cigarette tax by 45 cents per pack. Ironically, cigarette taxes target those SCHIP is supposed to help: the working poor, who are statistically more likely to smoke, according to the Citizens Against Government Waste. Excessively high excise taxes lead many consumers to circumvent the tax by purchasing products out-of-state, online, or through illegal sales. It also reduces the number of smokers.
Tax

Section 403(b) retirement plan rules finalized

The Treasury Department and the IRS have released final regulations related to retirement savings arrangements sponsored by public schools and charitable organizations, often referred to as "section 403(b) plans." These regulations are the first comprehensive section 403(b) regulations since 1964.

Pages