"All the Congress, all the accountants and tax lawyers, all the judges, and a convention of wizards all cannot tell for sure what the income tax law says." - Walter B. Wriston
Ask Your Senator or Representative to Pass the Tax Extenders
Members of Congress are now in their home districts visiting with constituents. Many Americans were disappointed that Congress did not pass the tax extenders bill in July and are hopeful that it will pass the Jobs, Energy, Families, and Disaster Relief Act of 2008 (S. 3335) in September. The bill, proposed by Senate Finance Chair Max Baucus (D-MT), would extend the research and development credit, the teacher's expense deduction, the charitable IRA rollover and approximately 60 other tax relief provisions. At a conference in Washington this week, several tax advisors asked whether or not the research and development credit will indeed be extended. CPA's attending the conference noted that it had been in effect continuously since 1981 but the deadlock in Congress could put it at risk.According to the Information Technology Association of America, the failure of Congress to renew the research credit has had a major impact on the economy. The harm to the economy has been approximately $11 billion in revenue and, more importantly, 84,000 U.S. jobs have been lost during the eight months without the credit.A 1995 survey by the Congressional Research Service (CRS) examined the value of the research and development credit. U.S. corporations claimed that the increased research encouraged by the credit leads to more jobs and a stronger economy. The CRS survey indicated that each dollar of credit granted to business resulted in a dollar of added research and development investment.Editor's Note: With the support from over four million teachers for the popular teacher's expense deduction, support by business for the research and development credit and support by charitable-minded persons for the IRA charitable rollover and other enhanced gift provisions, the tax extenders should be passed - and soon! If readers have opportunity to make contact with members of Congress during their August visits to home states and districts, please emphasize the importance of passing the extenders bill in September. With encouragement from constituents, hopefully the two parties will resolve the deadlock over offsets and pass a compromised tax extenders bill in September.
