Senators Chuck Grassley, R-Iowa, and Max Baucus, D-Mont., struck an agreement with House lawmakers on bipartisan, bicameral legislation to extend expired and expiring tax, health, trade, and other provisions.
The legislation will also eliminate an expected cut in Medicare’s payments to physicians in 2007, and also provides for opening more than 8.3 million acres on the continental shelf for oil and gas leasing.
“This is a good agreement,” Grassley said. “It continues tax relief without interruption. It stabilizes access to doctors for Medicare beneficiaries. It moves Medicare toward linking payment with quality and preserves Medicare beneficiaries’ access to rehabilitative therapy. It gives new access to farmers including those in Iowa to the growing Vietnamese market. These are things that need to get done. It’s good to see them moving forward.”
“This is not a perfect bill, but it renews tax cuts Americans need right now, like the college tuition deduction, and makes sure that Medicare and Medicaid patients will have access to care next year. It makes certain that more U.S.-made goods will get into Vietnam’s markets as well,” said Baucus.
Tax provisions extended in the legislation include:
• The tuition deduction.
• The new markets tax credit.
• The election to deduct state and local sales tax.
• The R&D tax credit. Present law will be renewed through 2006. In 2007, an additional alternative simplified credit that does not use gross sales as a factor in the regular credit will be available.
• The work opportunity tax credit and welfare-to-work credit are extended for an additional two years. For 2007, a modification combining the two programs takes effect.
• The earned income tax credit for combat pay.
• Qualified Zone Academy Bonds.
• The above-the-line deduction for teacher classroom expenses.
Separately, nearly six months after its headquarters was severely damaged by floods, the IRS building reopened Friday.
The first wave of employees returned to the building at 1111 Constitution Avenue for the first time following extensive flooding in June.
The phased move-in of more than 2,000 IRS employees will continue in coming weeks following repairs to key parts of the building’s infrastructure.
As a result of the reopening, the temporary procedures for submitting certain requests and submissions will no longer be in effect. As of December 11, taxpayers should make their submissions as they normally did before the IRS building temporarily closed.
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