SUMMARY AS OF:
5/25/2000--Introduced.
TABLE OF CONTENTS:
- Title I: Alternative Minimum Tax
- Title II: Simplification of Capital Gains Tax
- Title III: Simplification and Expansion of the Earned Income Tax Credit
- Title IV: Limitations On Itemized Deductions And Personal Exemptions
- Title V: Business Tax Simplification Provisions
- Title VI: Miscellaneous Simplification Provisions
- Subtitle A: Penalty and Interest Provisions
- Subtitle B: Procedural Provisions
- Subtitle C: Small Investors Tax Simplification Act
- Subtitle D: Other Provisions
Tax Ease and Modernization Act-Part I - Title I: Alternative Minimum
Tax - Amends the Internal Revenue Code to repeal the alternative minimum tax
on individuals.
Title II: Simplification of Capital Gains Tax - Provides, for
individuals, that 50 percent of capital gain shall be a deduction from gross
income, whether or not the individual itemizes other deductions.
Provides an inflation adjustment for the exclusion of capital gains on the
sale of a principal residence.
Title III: Simplification and Expansion of the Earned Income Tax
Credit - Revises the earned income credit to, among other things: (1) modify
the definition of earned income to specify that it is compensation includible in
gross income; (2) revise the definition of dependent; (3) allow the credit for
taxpayers who reside with other eligible individuals; and (4) increase the
credit percentage for three or more qualifying children.
Title IV: Limitations On Itemized Deductions And Personal Exemptions -
Repeals: (1) the overall limitation on itemized deductions; and (2) the phaseout
of personal exemptions.
Title V: Business Tax Simplification Provisions - Provides for a
single rate of interest on corporate and individual overpayments and
underpayments.
Provides that to the extent that, for any period, there exist equivalent
overpayments and underpayments by the same taxpayer, the net rate of interest on
such amounts shall be zero for such period, whether or not such overpayments or
underpayments are currently outstanding.
Permits the expensing of computer software which is not chargeable to capital
account.
Title VI: Miscellaneous Simplification Provisions - Subtitle A:
Penalty and Interest Provisions - Revises the failure to pay individual
estimated income tax provisions to require, instead of the current addition to
tax, that interest be paid on any underpayment of estimated tax.
Excludes from gross income interest paid on tax overpayments.
Reduces the penalty to pay tax by 50 percent.
Permits the Secretary of the Treasury to abate interest in order to prevent a
gross injustice.
Subtitle B: Procedural Provisions - Permits the Secretary to: (1)
provide relief to taxpayers in order to correct IRS errors; and (2) waive the 10
percent IRA early withdrawal penalty in cases of undue hardship.
Permits early IRA withdrawals without penalty if used to satisfy an income
tax liability.
Subtitle C: Small Investors Tax Simplification Act - Provides that a
qualified investment club shall use a method for determining a partner's share
of losses, gains, deductions, or credits that allocates such items based on each
partner's proportionate interest as of the last day of the taxable year.
Subtitle D: Other Provisions - Revises provisions concerning trade and
deductions of employees to provide that deductions consisting of expenses paid
or incurred by an employee, whether or not such expenses are reimbursed, in
connection with the performance by the taxpayer of services as an employee shall
be allowed as deductions from adjusted gross income.
Provides for, among other things: (1) the expensing of certain personal
property used in connection with residential rental property; (2) the inclusion
foster children up to the age of 24 in the definition of dependent; (3)
increasing the limitation on the basic standard deduction allowed in the case of
certain dependents; and (4) making the two-percent floor on miscellaneous
deductions inapplicable to qualified professional development expenses of
elementary and secondary school teachers.