Congress Acts Just Before 2008
Congress Passes AMT Patch, Foreclosure Relief And More In Flurry Of Last-Minute Voting
Just weeks before the start of the 2008 filing season, Congress finally passed an Alternative Minimum Tax (AMT) patch, which is expected to keep millions of middle income taxpayers out of the reach of the AMT for the 2007 tax year. The Tax Increase Prevention Act of 2007 (H.R. 3996) passed Congress on December 19.
Congress also provided major assistance to many homeowners facing foreclosure in the Mortgage Forgiveness Debt Relief Act of 2007 (H.R. 3648), which passed on December 18. This bill provides debt forgiveness relief and more, adding several important non-mortgage related tax breaks to the Tax Code. Additionally, Congress passed an energy legislation with several tax provisions, special tax breaks for victims of the Virginia Tech tragedy, and an omnibus FY 2008 budget bill that increases funding for the IRS. Congress also passed a substantial technical corrections bill, as well as one that resolves a dispute over the IRS Commissioner’s term of office. Congress, however, failed to pass a package of extenders. A farm bill, with farm-related tax incentives, also stalled at the last minute as did tax relief for America’s military personnel. Finally, a long-list of revenue raising provisions awaits when lawmakers return to Capitol Hill in January. President Bush quickly signed the Energy Bill and Virginia Tech Relief into law on December 19, followed by the Mortgage Relief Bill on December 20. The White House indicated that the president will sign the other bills when they reach his desk.
The lateness of the AMT patch — which is temporary and effective only for tax year 2007 — may slow return processing and refund payments for the 2008 filing season. The IRS has warned that it needs up to 10 weeks to reprogram its computer systems for the AMT patch. Immediately after passage of the patch, Acting IRS Commissioner Linda Stiff said, “Our people will do everything they can to quickly update our systems for this major change.” Our tax lawyer firm will be glad to discuss these and other matters with you.
Tags: Beating The Tax Man