Senate Passes Tax Reconcilation Legislation

The Senate, on November 17, 2005, approved the Tax Relief Bill of 2005 (Sen 2020) by a vote of 66 to 33. The $60 billion package extends a number of expiring provisions, provides additional hurricane-related relief, creates new tax breaks for charitable giving, and includes a number of revenue raisers focused on tax shelters, IRS collection efforts, increased penalties and fines, expatriation, abuses involving charities, and other transactions deemed abusive. Included among the extended expiring provisions are the deduction for state and local taxes, the research credit, allowing nonrefundable credits for AMT purposes, the above-the-line deduction for teacher expenses, the deduction for corporate donation of computer equipment, District of Columbia tax incentives, Qualified Zone Academy Bonds, 15-year amortization of leasehold improvements, the above-the-line deduction for higher education expenses, the saver's credit, increased expensing for small business, expensing and expansion of environmental remediation costs, and a pair of tax incentives for Indian reservations. Also included was an extension of the increased AMT exemption amount, with a last minute amendment increasing the exemption amount for 2006. . 

The House was also hoping to pass its version of the tax reconciliation bill before the Thanksgiving break, but it now appears that vote will be put off until December. A difficult conference would still remain between the expiring provision-focused House version and the more expansive Senate version of the legislation.