Sam Johnson IN THE NEWS: CQ House Passes Sam Johnson Tax Bill
Washington,
Apr 15 -
House Backs Bill That Would Ease Requirements for Cell Phone Tax Breaks
By Meghan McCarthy and Richard Rubin, CQ Staff
Lawmakers backed the bill (HR 4994), as amended, by a vote of 399-9. The centerpiece of the measure, timed to coincide with the April 15 tax filing deadline, is the change in cell phone rules, but it also contains several provisions aimed at making it easier for taxpayers to understand and claim certain tax breaks.
The bill would strike language from a law that defines cell phones as “listed property.” In effect, this would allow an employee to depreciate the cost of the phone and would reduce the paperwork required to avoid consideration of the phone as income for tax purposes. The change would take effect in the 2010 tax year.
The Joint Committee on Taxation estimates the provision would reduce revenues by $411 million over 10 years.
“Times have changed since the Congress passed this rule in 1989, when people carried phones in a suitcase,” said Sam Johnson, R-Texas, who also noted that the IRS commissioner has said the current rule is obsolete.
The bill also would make a number of minor changes to existing tax law and would place new requirements on the IRS that are intended to assist and protect taxpayers.
One provision would strike a section of a 2006 tax law (PL 109-222) that requires individuals who cannot afford to pay their taxes in a lump sum to include a partial payment of what they owe when applying for a payment plan.
The bill would require the IRS to provide written notice to taxpayers who were eligible, but did not receive, the earned-income tax credit or a refund under that credit in any preceding tax year.
It also contains language that would allow employees of the Treasury Department to refer taxpayers to qualified low-income taxpayer clinics. Currently, IRS employees are limited by agency rules from making such referrals.
The bill would authorize the Treasury Department to provide up to $20 million per year in matching grants to develop, expand or continue volunteer income-tax assistance programs for the benefit of low- and moderate-income taxpayers.
To raise revenue for its provisions, the legislation would increase penalties for filing incorrect information on tax returns to $100, up from $50. The Joint Committee on Taxation estimates that this change would raise $419 million over 10 years.
Annie Shuppy contributed to this story.