Academic journal article Journal of Accountancy

New White House Proposals on Simplification and Taxpayer Rights

Academic journal article Journal of Accountancy

New White House Proposals on Simplification and Taxpayer Rights

Article excerpt

The Treasury Department announced the Clinton Administration's package of tax simplification and taxpayer rights initiatives. The package includes proposals on global interest netting and alternative minimum tax relief of small companies.

Treasury Secretary Robert E. Rubin said the package contained more than 60 measures designed to simplify tax law and enhance taxpayer's rights. "Our goal is clear: We want to make life easier for the American taxpayer," said Rubin. He said the proposals represented everything the administration could do to simplify the tax code so it would be, in the aggregate revenue neutral.

Highlights of the tax simplification proposals include

* An increase of the standard deduction for the unearned income of dependent filers to the amount of the filer's earned income, plus $700 of unearned income.

* The elimination of the household maintenance test for the child-and dependent-care tax credit.

* An exclusion from the corporate alternative minimum tax (AMT) for companies with gross receipts that average less than $5 million for the prior three years.

* Independent contractor rules allowing businesses that have misclassified their workers and fail to meet the requirements for the Internal Revenue Code section 530 safe harbor to reclassify their workers prospectively with no employment tax liability for prior years. …

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