President Bush signed into law a one-year patch for the alternative minimum tax, in addition to a $555-billion omnibus spending bill to fund government operations through 2008.

The House approved the AMT patch last week after the Senate passed a version that left out the offsets that Congressional Democrats had tried to include to compensate for the loss in revenue. But those offsets met with opposition from Congressional Republicans and some Democrats as well. Some of the pay-as-you-go offsets would have raised taxes on the carried interest earned by managers of hedge funds and private equity firms, as well as cut down on the use of offshore tax havens to defer tax payments by hedge fund managers.

Bush and Congressional Republicans were also able to keep Democrats to the spending levels they had requested in the overall budget, and provide $70 billion to fund the war in Iraq and Afghanistan without any timelines for troop withdrawal. Nevertheless, Bush chided Congress for the $10 billion in domestic spending earmarks in the bill.

"Today, I signed into law H.R. 2764, legislation that will fund the federal government within the reasonable and responsible spending levels I proposed - without raising taxes and without the most objectionable policy changes considered by the Congress," he said in a statement. "This law provides a down payment for the resources our troops need, without arbitrary timelines for withdrawal. The Congress should quickly take action next year to provide the remainder of the funding needed by our troops."

The bill provides $2.15 billion for the Internal Revenue Service, including $3 million for the Tax Counseling for the Elderly Program, $9 million for low-income taxpayer clinic grants, $8 million for a Community Volunteer Income Tax Assistance matching grants program, and $177 million for the Taxpayer Advocate Service.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access