House Ways & Means Comm. scheduled tommorow to vote out H.R. 3648 "to amend the Internal Revenue Code of 1986 to exclude discharges of indebtedness on principle residences from gross income." Understand it is to be retro to Jan. 1 of the current year although the final product will probably not bear much resemblance to tommorrow's product. This would be in addition to the insolvency and bankruptcy exceptions already available to discharges of indebtedness.
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It's about time
to help the many people who are losing their homes in todays market. -
Reality Check
Actually, the government is not really making that much of a concession. The people who can't raise $500 to make their house payment are not those for whom the IRS can successfully collect. There are millions of people in this category, and imagine the cost to the IRS of detecting these people even though they don't have to go to court and get judgement on them. Then after assessing these people, how much are they going to collect?
And how many of them are in a tax bracket that would even result in significant tax? I'm assuming debt forgiveness would have to measured against the FMV of the home repossessed, meaning quite a reduction in the amount.
The social agenda of the IRS dictates that they go after tax planners and practitioners, wealthy taxpayers, etc. and simply turn their head at the billions squandered in EIC fraud.
I believe chasing down those unfortunate enough to have their homes repossessed would be a net loss in funds for the government.Comment
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Hr3648
Bill contains some other interesting tax related provisions. Good summary of the bill at http://waysandmeans.house.gov/Last edited by jimmcg; 09-26-2007, 03:30 PM.Comment
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