December 2007 Legislation
From TaxAlmanac
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House Protects Millions of Families from AMT
The House of Representatives voted in favor of the Senate Amendment to H.R. 3996, the Tax Increase Prevention Act of 2007, legislation providing immediate tax relief to millions of families who would otherwise pay higher taxes under the alternative minimum tax (AMT) this year. Today’s action followed recent efforts by Senate Republicans to block consideration of House-passed legislation to provide AMT relief without adding to the national debt. The House twice passed revenue neutral AMT relief earlier this fall, but both measures, H.R. 3996 and H.R. 4351 fell victim to filibuster threats by Senate Republicans.
Ways and Means Committee Chairman Charles B. Rangel offered the following remarks during debate on the bill:
"This is an extraordinary time because the Republican minority in the Senate, bolstered by a lame-duck President, has actually dictated to the House of Representatives what they will or will not do with regards to this critical tax relief. The House has twice presented them with AMT relief that would not add to the national debt and they have twice blocked its consideration.
"So, what are our options? We could stick to our fiscal guns, saying that the right thing to do is not to pass a bill that we cannot pay for and that taxpayers are not really entitled to the benefits of waiving PAYGO rules. Or, we could say, why hold 23 million taxpayers hostage because of the irresponsibility of the minority in not being willing to pay for this relief, no matter how many alternatives we give them?
"We chose to protect the taxpayers. Forget the loopholes, forget the revenue losses, forget the indebtedness – at least for now – because we do not want those hardworking families to wake up in the morning and find that there is a feud between Republicans and Democrats that would cause them to carry this burden. We have come out on the side of the taxpayers and we hope we can pass this bill to offer protection from the AMT and then, in a responsible way, maybe Republicans and Democrats in the House and Senate can deal with this issue in a more permanent way next year.
H.R. 3996 would extend for one year AMT relief for nonrefundable personal credits and increase the AMT exemption amount to $66,250 for joint filers and $44,350 for single filers to ensure that no additional taxpayers are liable for the AMT this year.
Mortgage Tax Relief Legislation Signed Into Law
Senate Finance Committee Chairman Max Baucus (D-Mont.) hailed the signature of the Mortgage Forgiveness Debt Relief Act of 2007 into law. This legislation offers tax relief to American families caught in the sub-prime mortgage crisis. When debt is forgiven on a home loan, the homeowner must normally count that debt forgiveness as income and pay taxes on it. The mortgage tax relief bill creates a three year exception for debt forgiveness on home loans – helping families already unable to meet their mortgages to avoid incurring large tax bills as well. It also extends a provision allowing homeowners to deduct mortgage insurance payments from their taxable income. The Senate approved a Baucus amendment to the House-passed bill, H.R. 3648, on December 18.
“This bill reaches out a helping hand to the millions of American families struggling to pay their bills in the wake of the sub-prime mortgage crisis,” said Baucus. “This timely tax relief will help families save money, and get their financial feet back under them. Congress needs to do more to examine the causes of the sub-prime mortgage crisis and to protect Americans seeking the dream of home ownership.”
In addition to tax relief for debt forgiveness and mortgage insurance payments, the bill includes:
- Tax relief for volunteer firefighters and emergency medical technicians
- Help to expand housing options for college students with children
- Protection of tax relief for homeowners after the death of a spouse
- Flexibility to help co-op tenant/owners deduct real estate taxes and mortgage nsurance
The bill is fully offset by increased penalties for failure to file S corporation returns or partnership returns, and new requirements for the payment of corporate estimated taxes.
Clean Renewable Energy and Conservation Tax Act of 2007
Tax Technical Corrections Act of 2007
- All material compiled from Joint Committee on Taxation
