Legislation

Tax

President Approves IRS Funding, Expects Better Service

It looks like our tax collectors will be with us for another year. President Bush signed the legislation that provides funding for the Treasury Department and the IRS for fiscal year 2002.
Tax

New Rebate Checks May Delay Spring Tax Refunds

Part of the $100 billion tax stimulus package passed last week by the House includes a plan to offer a second wave of income tax rebate checks, this time to lower income people who may not have qualified for the rebate checks that were dispatched earlier this year.The Senate is currently deliberating on a similar tax stimulus bill that also includes a tax rebate program.
Tax

Senate Considers 50% Bonus Depreciation Legislation

Senator Orrin Hatch, R-UT, a member of the Senate Finance Committee, has introduced legislation that would provide a temporary 50% bonus depreciation deduction for all businesses that purchase fixed assets during the period between September 11, 2001, and July 1, 2002.The Economic Stimulus Through Bonus Depreciation Act of 2001, Senate bill 1553, offers businesses the 50% first-year bonus depreciation in addition to the normal depreciation deduction, computed as if the bonus depreciation did not exist.
Technology

Congress Ban on Internet Access Tax to Expire

The moratorium on taxes that target the Internet is set to expire this weekend. The House last week voted to extend the moratorium for two years, but objections of several Senators to the fact that taxes on Internet sales were not addressed by the House bill interfered with passage. Both the House and Senate are now in recess until Tuesday.The House chose to isolate the issue of the moratorium on tax on Internet access charges by passing a bill that dealt only with that aspect of Internet taxation.
Tax

House Bill Would Allow Disclosure of Taxpayer Information

House Bill H.R. 2975, the Patriot Act of 2001, if made into law, will authorize disclosure of taxpayer information to the Justice and Treasury departments, federal law enforcement, as well as federal intelligence agencies that are investigating terrorist organizations and related activities.Some tax practitioners have voiced a concern that such a bill will weaken important restrictions on disclosing tax information.
Tax

Senator Daschle Denounces Cut in Capital Gain Tax

Rivals in Washington are lining up on both sides of an issue that has been smoldering for years.
Tax

House Approves Non-Itemizer Charitable Deduction

The House of Representatives has approved a bill that would permit not-itemizing taxpayers to deduct on their tax returns up to $25 per year in charitable giving, beginning in 2002. For a taxpayer in the 15 percent bracket, this would represent approximately $3 in tax savings.Under the terms of the House bill, the amount of allowable deduction for charitable contributions would increase to $100 over the next ten years.
Tax

Flat Tax Resurfaces

Representative John Linder (R-GA) and Representative Collin Peterson (D-MN) have introduced legislation which they feel will "level the playing field for average Americans."The legislation, H.R. 2525, is called the FairTax Act, and was first introduced without success in 1999. The bill currently awaits consideration by the House Ways and Means Committee.The FairTax Act would institute a flat rate consumption tax, replacing the current income tax as well as the payroll tax.
Tax

IRS Going After Stock Purchase Plans

The Internal Revenue Service has announced its intention to consider applying Social Security tax to stock purchase plans.A stock purchase plan permits employees to buy shares in their company stock at a discount - typically 15 percent below market price.The IRS has decided that it might want to impose the Social Security tax (7.65 percent to the employee and a matching 7.65 percent to the employer) on the difference between the stock's market price and the discounted purchase price.The IRS cla

SEC Chair Would Reexamine Fair Disclosure Rule

Harvey Pitt, President Bush's selection for chairman of the Securities and Exchange commission, has indicated that, if confirmed, he would be willing to address the burdens placed on companies by Regulation Fair Disclosure (Reg FD). Reg FD, one of former SEC chairman Arthur Levitt's pet projects, requires publicly held companies to provide information that could influence the purchase of shares simultaneously to every potential investor.
Tax

Pending Legislation Will Increase Meal Deduction

The Senate is considering legislation that would accelerate the rise in the meals expense deduction for truck drivers to 80 percent. Under current law, truck drivers are entitled to deduct 60 percent of their allowable meal expenses. That percentage is scheduled to increase to 80 percent in 2008.The Small Business Works Act, proposed by Senator Christopher Bond (R-MO), would implement the increased meal deduction to 80 percent in 2002. The House passed legislation in March favoring this increase.
Tax

IRS Orders States: No Tax on Rebates

There are eight states that allow federal income taxes paid as a deduction on the state tax returns: Iowa, Oklahoma, Louisiana, Missouri, Montana, North Dakota, Oregon, and Utah.
Technology

House Leader Plans to Block Online Sales Tax

House Majority Leader Dick Armey has announced he will work to block sales taxes on Internet sales. The ban he foresees would be of a short-term nature. Representative Armey plans to rally support for a three-to-five year ban on Internet sales taxes in conjunction with legislation currently before Congress to make the current ban on Internet access taxes permanent.
Tax

Social Security Number of Deceased Child Causes Grief

A Salem, Oregon couple suffered the loss of their baby to a rare pediatric disease early in 2000. Now the couple faces additional unexpected grief at the hands of the IRS.An unidentified taxpayer claimed the child as a dependent on a 2000 tax return, using the child's name and Social Security number, information that was apparently found on the Internet.The parents of the deceased child also claimed the child as a dependent on their 2000 tax return, a claim that was legal.
Tax

Official Word From the IRS on Tax Rebates

The IRS has issued its position on the new tax legislation, and details some additional information about timing of upcoming rebates.
Tax

Deloitte Offers Free Booklet on New Retirement Rules

Deloitte & Touche's Human Capital Advisory Services practice has published a free 44-page booklet that examines the retirement issues associated with the new Economic Growth and Tax Relief Reconciliation Act.The new act makes significant changes to rules regarding retirement plans, simplifying some of the many regulatory complexities and expanding opportunities for saving and portability."These new retirement plan changes can offer some valuable tools to enhance your retirement plans in ways to attract and retain your needed workforce and to increase the retirement security for th
Tax

How Much Will the New Tax Laws Save You?

Intuit, the maker of Quicken personal finance software and TurboTax software, has created a calculator that will help you estimate your savings under the new tax laws for the next 10 years.
Tax

Tax Cut Brings Bad News for Some

High-tech firms are not pleased with all the aspects of the tax cut that was agreed to over the past weekend.
Tax

Senate Passes Huge Tax Cut

Late Wednesday, the Senate passed President Bush's $1.35 trillion tax cut, a colossal program that will be phased in over 11 years.

Bankruptcy Legislation May Shield Retirement Funds

The House and Senate have both approved bankruptcy reform legislation and both chambers agree that new bankruptcy legislation should exempt funds in retirement accounts from the bankruptcy estate of debtors. Proposed legislation would also prevent debtors from discharging retirement plan loans through a bankruptcy proceeding.The bills would shield from a bankruptcy estate retirement assets in qualified plans, IRAs, and other tax-exempt funds. The protection would extend to eligible rollover distributions that are indeed rolled over.

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