Friday, August 20, 2010

Joint Committee on Taxation releases description of revenue provisions in President's FY2011 budget proposal

On August 16, Joint Committee on Taxation released its "Description Of Revenue Provisions Contained In The President’s Fiscal Year 2011 Budget Proposal" which is available at http://bit.ly/b6WD70.

The full document runs 521 pages, here's the outline.

Notes:
  • These are the President's revenue (i.e., tax) proposals, not current law (nor necessarily even pending legislation).  Nevertheless, they do provide some insight into the Administration's views and *may* ultimately find their way into future legislation.


I.             INDEX THE INDIVIDUAL ALTERNATIVE MINIMUM TAX AMOUNTS FOR INFLATION
II.            MAKE PERMANENT AND MODIFY CERTAIN TAX CUTS ENACTED IN 2001 AND 2003
A.            Dividends and Capital Gains Tax Rate Structure
B.            Extend Temporary Increase in Expensing for Small Business
C.            Marginal Individual Income Tax Rate Reductions
D.            Child Tax Credit
E.            Increase of Refundable Portion of the Child Credit
F.            Marriage Penalty Relief and Earned Income Tax Credit Simplification
G.           Education Incentives
H.            Modify and Make Permanent the Estate, Gift, and Generation Skipping Transfer Taxes After 2009
I.             Other Incentives for Families and Children (includes extension of the adoption tax credit, employer-provided child care tax credit, and dependent care tax credit)
J.             Reinstate the Overall Limitation on Itemized Deductions and the Personal Exemption Phase-out
III.           TEMPORARY RECOVERY MEASURES
A.            Extend the Making Work Pay Credit for One Year
B.            Provide $250 Economic Recovery Payment and Special Tax Credit
C.            Extend COBRA Health Insurance Premium Assistance
D.            Provide Additional Tax Credits for Investment in Qualified Property Used in a Qualifying Advanced Energy Manufacturing Project
E.            Extend Temporary Bonus Depreciation for Certain Property
F.            Extend Option for Cash Assistance to States in Lieu of Low-Income Housing Tax Credit for 2010
IV.          TAX CUTS FOR FAMILIES AND INDIVIDUALS
A.            Increase in the Earned Income Tax Credit
B.            Expand the Child and Dependent Care Tax Credit
C.            Automatic Enrollment in Individual Retirement Arrangements
D.            Saver’s Credit
E.            Extend American Opportunity Tax Credit
V.            TAX CUTS FOR BUSINESSES
A.            Increase Exclusion of Gain on Sale of Qualified Small Business Stock
B.            Make the Research Credit Permanent
C.            Remove Cell Phones from Listed Property
VI.          OTHER REVENUE CHANGES AND LOOPHOLE CLOSERS
A.            Reform Treatment of Financial Institutions and Products
1.            Impose a financial crisis responsibility fee
2.            Require accrual of the time-value element on forward sale of corporate stock
3.            Require ordinary treatment for dealer activities with respect to section 1256 contract
4.            Modify the definition of control for purposes of the section 249 deduction limitation
B.            Reinstate Superfund Excise Taxes and Corporate Environmental Income Tax
C.            Permanent Extension of Federal Unemployment Surtax
D.            Repeal Last-In, First-Out Inventory Accounting Method
E.            Repeal Gain Limitation on Dividends Received in Reorganization Exchanges
F.            Reform U.S.       International Tax System
1.            Defer deduction of interest expense related to deferred income
2.            Determine the foreign tax credit on a pooling basis
3.            Prevent splitting of foreign income and foreign taxes
4.            Tax currently excess returns associated with transfers of intangibles offshore
5.            Limit shifting of income through intangible property transfers
6.            Disallow the deduction for excess nontaxed reinsurance premiums paid to affiliates
7.            Limit earnings stripping by expatriated entities
8.            Repeal 80/20 company rules
9.            Prevent the avoidance of dividend withholding taxes
10.          Modify the tax rules for dual capacity taxpayers
G.           Combat Under-Reporting of Income on Accounts and Entities in Offshore Jurisdictions
1.            Require reporting of certain transfers of assets to or from foreign financial accounts
2.            Require third-party information reporting regarding the transfer of assets to or from foreign financial accounts and the establishment of foreign financial accounts
H.            Reform Treatment of Insurance Companies and Products
1.            Modify rules that apply to sales of life insurance contracts
2.            Modify dividends received deduction for life insurance company separate accounts
3.            Expand pro rata interest expense disallowance for company-owned life insurance (“COLI”)
4.            Permit partial annuitization of a nonqualified annuity contract
I.             Eliminate Fossil Fuel Tax Preferences
J.             Treat Income of Partners for Performing Services as Ordinary Income
K.            Modify the Cellulosic Biofuel Producer Credit
L.             Eliminate Advance Earned Income Tax Credit
M.          Deny Deduction for Punitive Damages
N.           Repeal the Lower-of-Cost-or-Market Inventory Accounting Method
O.           Reduce the Tax Gap and Make Reforms
1.            Require information reporting on payments to corporations
2.            Require information reporting for rental property expense payments
3.            Require information reporting for private separate accounts
4.            Require a certified taxpayer identification number from contractors and allow certain withholding
5.            Increased information reporting for certain government payments for property and services
6.            Increase information return penalties
7.            Require e-filing by certain large organizations
8.            Implement standards clarifying when employee leasing companies can be held liable for their clients’ Federal employment taxes
9.            Increase certainty with respect to worker classification
10.          Codify economic substance doctrine
11.          Allow assessment of criminal restitution as tax
12.          Revise offer-in-compromise application rules
13.          Allow Internal Revenue Service expanded access to information in the National Directory of New Hires
14.          Make repeated willful failure to file a tax return a felony
15.          Facilitate tax compliance with local jurisdictions
16.          Extension of statute of limitations where state tax adjustment affects Federal tax liability
17.          Improve investigative disclosure statute
18.          Clarify that the bad check penalty applies to electronic checks and other payment forms
19.          Impose a penalty on failure to comply with electronic filing of returns
20.          Require consistency in value for transfer and income tax purposes
21.          Modify rules on transfer tax valuation discounts
22.          Require minimum term for grantor retained annuity trusts (“GRATs”)
VII.         UPPER-INCOME TAX PROVISIONS
A.            Limit the Tax Rate at Which Itemized Deductions Reduce Tax Liability
VIII.        SUPPORT CAPITAL INVESTMENT IN THE INLAND WATERWAYS
IX.           OTHER INITIATIVES
A.            Extend and Modify the New Markets Tax Credit
B.            Reform and Extend Build America Bonds
C.            Restructure Transportation Infrastructure Assistance to New York City
D.            Implement Unemployment Insurance Integrity Legislation
E.            Authorize Post-Levy Due Process
F.            Increase Levy Authority to 100 Percent for Vendor Payments
G.           Allow Offset of Federal Income Tax Refunds to Collect Delinquent State Income Taxes for Out-of-State Residents

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