In May Congress enacted the Tax Increase Prevention and Reconciliation Act. There are a few provisions in this new law that will be of interest to church treasurers. The Act:
- Extends reduced capital gains and dividend tax rates through 2010. Capital gains and dividend income will be taxed at a maximum rate of 15 percent through 2010. For taxpayers in the 10 and 15 percent income tax brackets, the tax rate will be 5 percent through 2007 and zero in 2008 through 2010.
- Extends through 2009 the enhanced "section 179 deduction" of up to $100,000 for purchases of depreciable business assets.
- Requires that a taxpayer make a down payment of 20 percent of any lump sum offer-in-compromise with any application for an offer. For periodic payment offers, taxpayers are required to comply with their own payment schedule while their offer is being considered. The Act also provides that an offer is deemed accepted if the IRS does not make a decision with respect to the offer within two years from the date that the offer was submitted.