Daily Tax Update - April 17, 2007

CONGRESS DEBATES TAX ISSUES TODAYRepublicans and Democrats marked today’s tax return filing deadline with bills and press conferences designed to illustrate the two parties' key differences on tax policy.

  • In the House, Democrats have scheduled a vote this evening on the Taxpayer Protection Act (H.R. 1677), a bill taxwriters approved late last month.  The legislation would crack down on refund anticipation loans, expand earned income tax credit outreach efforts, and prevent misuse of Treasury Department names and symbols.
  • House Majority Leader Steny H. Hoyer (D-MD) said, "The Taxpayer Protection Act is a continuation of Democrats' efforts to ensure that the tax code is more simple and fair for middle-class taxpayers and small-business owners."  Hoyer also said Democrats are committed to permanently reforming the alternative minimum tax (AMT), as well as to providing tax reform and simplification.
  • House Republicans scheduled press events that continue the debate over the fiscal 2008 Democratic budget resolution, arguing that GOP tax relief has helped the economy and that Democrats have passed a fiscal blueprint that would raise taxes.
  • Senate Republican Conference Chair Jon Kyl (R-AZ) introduced a bill to permanently extend the lower marginal rates, the expanded child credit, so-called marriage penalty relief, estate tax repeal, increased expensing, and the research credit.  The bill -- the Invest in America Act -- would also repeal the AMT and would express the sense of the Senate that Congress should simplify the tax code without raising tax rates.  "We believe that you can do a better job managing your money than we can in Washington , D.C. ," Kyl said.

DEMOCRATS WORK TO RECONCILE BUSINESS TAX PROVISIONS:  Today, House Ways and Means Chairman Charles Rangel (D-NY) said that Democratic leaders will probably remove a minimum wage increase and small business tax breaks from the emergency war funding bill before sending it to President Bush.  Rangel said that they might decide to remove all provisions with a domestic focus from the bill and negotiate those measures in separate legislation.

KERRY REQUESTS AUDIT INFORMATION FROM IRS COMMISSIONER:  In a letter dated April 17, Sen. John Kerry (D-MA) asked IRS Commissioner Mark Everson for details about the IRS’s audit strategy and the percentage of audits for taxpayers at various income levels.  This request was in response to a story in the New York Times discussing how IRS audits are increasing as part of a broad change in audit strategy, an approach that Kerry expressed concern was resulting in time spent on audits that do not necessarily uncover any additional taxes due.  Kerry also requested information on the steps the IRS is taking to combat the filing of fraudulent returns and identity theft. 

TAX BILLS INTRODUCED APRIL 16:
H.R. 1677: To amend the Internal Revenue Code of 1986 to enhance taxpayer protections and outreach.
Sponsor: Rep Rangel, Charles B. [NY-15] (introduced 3/26/2007) Cosponsors (1)
Committees: House Ways and Means
House Reports:
110-84
Latest Major Action: 4/16/2007 Placed on the Union Calendar, Calendar No. 49.

H.R. 1860: To amend the Internal Revenue Code of 1986 to provide a 100 percent deduction for expenses related to identity theft.
Sponsor: Rep McCarthy, Carolyn [NY-4] (introduced 4/16/2007) Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 4/16/2007 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

H.R. 1862: To amend the Internal Revenue Code of 1986 to encourage new school construction through the creation of a new class of bond.
Sponsor: Rep Sanchez, Loretta [CA-47] (introduced 4/16/2007) Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 4/16/2007 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

S. 1111: A bill to amend the Internal Revenue Code of 1986 to make the Federal income tax system simpler, fairer, and more fiscally responsible, and for other purposes.
Sponsor: Sen Wyden, Ron [OR] (introduced 4/16/2007) Cosponsors (None)
Committees: Senate Finance
Latest Major Action: 4/16/2007 Referred to Senate committee. Status: Read twice and referred to the Committee on Finance.

INTERNAL REVENUE SERVICE - CIRCULAR 230 DISCLOSURE:
As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any plan or arrangement addressed herein.

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