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IRS Issues New "Blue Book"

The government recently released its annual list of tax proposals in its "Blue Book" for the coming tax year. The Blue Book generally accompanies the President's overall fiscal budget. Here are several key points of interest:

*Rather than doing away with the dreaded alternative minimum tax (AMT), the Blue Book proposes another one-year increase of AMT exemption levels.

*New revenue-raising initiatives have been proposed, focusing on expanded information reporting, improved compliance by business; stronger tax administration; and expanded penalties.

*A proposed standard deduction for health insurance ($15,000 for family coverage and $7,500 for single coverage) would replace all pre-tax employee health insurance benefits.

*A series of proposals would make temporary tax breaks permanent or extend them indefinitely. This includes the research and experimentation credit, tax-free withdrawals from IRAs for charitable contributions, the enhanced deduction for corporate contributions of computer equipment, increased limits on contributions of partial interests in real property for conservation purposes, the basis adjustment to stock of S corporations contributing appreciated property and the teacher's classroom expense deduction.

We will keep a close watch on these proposals as well as any other tax legislative initiatives.

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