Daily Tax Update - April 17, 2008

BAUCUS, GRASSLEY INTRODUCE EXTENDERS PACKAGE WITH NEW AMT PATCH:  Today, Senate Finance Committee Chairman Max Baucus (D-MT) and ranking Member Chuck Grassley (R-IA) introduced legislation that will increase the AMT exemption and allow for nonrefundable personal credits against the AMT. Currently, a taxpayer receives an exemption of $33,750 under the AMT and $45,000 for married couples filing jointly. Current law also does not allow personal credits against the AMT. At the end of last year, H.R. 3996 increased the exemptions to $44,350 and $66,250, respectively, and allowed for personal credits against the AMT. The provision expired December 31, 2007. The Baucus-Grassley bill increases the exemption amounts to $46,200 (individuals) and $69,950 (married filing jointly) for 2008. The bill will also allow the personal credits against the AMT. The bill also extends tax provisions that expired at the end of 2007 or are set to expire at the end of 2008.

  • Grassley said, “This legislation is very important.  If expiring tax provisions are not extended, Americans will be hit with big tax increases, and it will happen without a vote of Congress. The last thing families, small businesses and investors need right now is a tax increase, but that’s what will happen this year and in 2010 if Congress doesn’t act. The Senate has demonstrated leadership in protecting taxpayers from the unintended consequences of the Alternative Minimum Tax and in extending existing energy tax provisions. It’s time to demonstrate that leadership again.”
  • A summary of the  bill can be accessed via: http://www.steptoe.com/assets/attachments/3377.pdf

SENATE APPROVES ONE-WEEK FARM BILL EXTENSION:  Today, the Senate passed by unanimous consent a one-week extension of current farm law.  The negotiators are hoping to come to an agreement on the spending and offsets to be included in a longer-term farm bill.

TAX BILLS INTRODUCED APRIL 16TH:
H.R.5822: To amend the Internal Revenue Code of 1986 to waive the 10 percent penalty on withdrawals from qualified retirement plans upon receipt of notice of foreclosure on a principal residence.
Sponsor: Rep Cardoza, Dennis A. [CA-18] (introduced 4/16/2008)      Cosponsors (None)

H.R.5823: To amend the Internal Revenue Code of 1986 to allow taxpayers to designate a portion of their income tax payment to provide assistance to homeless veterans, and for other purposes.
Sponsor: Rep Israel, Steve [NY-2] (introduced 4/16/2008)      Cosponsors (3)

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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