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TECHNICAL CORRECTIONS NEED TECHNICAL CORRECTION
November 22, 2004
Congressional taxwriters released a "discussion draft" of technical corrections for 2004 tax legislation. They have now adjourned, so no action will occur until the new Congress convenes next year.
The draft fails to address one item badly in need of technical correction. The American Jobs Creation Act (AJCA) allows banks with IRA shareholders to become S corporations. The language of the bill doesn't appear to cover holding companies, which own the vast majority of banks. As drafted, the provision applies to almost nobody.
We assume the bank-IRA provision is a mistake. Otherwise, it is one of the most narrowly-targeted provisions in subchapter S.
Tax Analysts reports a "Senate Finance Committee aide" says that taxwriters hope to incorporate public comments into the version that the next Congress will take up.
Link:
Joint Committee on Taxation Description of Tax Technical Corrections Act of 2004.
Tax Update discussion of Bank-IRA provision.
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