Coriolis
04-11-2005, 04:39 PM
What is the problem senators!!!!
WASHINGTON (AP) - A bill that would make tax-free the federal grants given to people whose homes have been hit by hurricanes, flooding or other natural disasters has hit a snag in the Senate, days before Friday's tax deadline.
The Internal Revenue Service says the Federal Emergency Management Agency grants, which are used to help people relocate or safeguard their homes against future disasters, are taxable under current law. Previously, they hadn't been taxed because they were assumed to be tax-exempt.
Lawmakers from states hit by recent flooding and last year's string of hurricanes sought to clarify that the grants were intended to be tax-free. Their bill passed the House last month. It's now stuck in the Senate over the question of whether it should be retroactive.
The House-passed bill would make the grants tax-free after enactment. Rep. Mark Foley (news, bio, voting record), R-Fla., the bill's sponsor, said the bill doesn't need to be retroactive to convey to the IRS that these payments shouldn't be taxed.
Taylor Griffin, a Treasury Department spokesman, agreed and said the administration supports making the exemption retroactive and that the House bill, combined with on-the-record statements from lawmakers, sufficiently illustrate the intent of Congress to do that.
But Democratic Sens. Max Baucus of Montana, Mary Landrieu of Louisiana and Bill Nelson of Florida wrote to Treasury Secretary John Snow last week seeking assurances that people who received FEMA grants before the bill is enacted won't be charged the tax.
"The absence of statutory language providing retroactive relief creates a negative inference that payments received prior to the date of enactment are included in income," the senators wrote. They are pushing a separate bill that makes the tax exemption retroactive to 2003.
Foley said he hopes the "Senate will get their act together" and pass the bill soon. "There is a huge liability, potentially, for people who have already suffered enough," he said.
A spokesman for Landrieu said that while Friday's tax deadline is a concern, a bill that is retroactive doesn't necessarily have to be passed this week.
"We want to make sure that in our rush to get this wrapped up by tax day that we are not inadvertently setting people up to find out later that they weren't included," said Landrieu's spokesman, Adam Sharp.
WASHINGTON (AP) - A bill that would make tax-free the federal grants given to people whose homes have been hit by hurricanes, flooding or other natural disasters has hit a snag in the Senate, days before Friday's tax deadline.
The Internal Revenue Service says the Federal Emergency Management Agency grants, which are used to help people relocate or safeguard their homes against future disasters, are taxable under current law. Previously, they hadn't been taxed because they were assumed to be tax-exempt.
Lawmakers from states hit by recent flooding and last year's string of hurricanes sought to clarify that the grants were intended to be tax-free. Their bill passed the House last month. It's now stuck in the Senate over the question of whether it should be retroactive.
The House-passed bill would make the grants tax-free after enactment. Rep. Mark Foley (news, bio, voting record), R-Fla., the bill's sponsor, said the bill doesn't need to be retroactive to convey to the IRS that these payments shouldn't be taxed.
Taylor Griffin, a Treasury Department spokesman, agreed and said the administration supports making the exemption retroactive and that the House bill, combined with on-the-record statements from lawmakers, sufficiently illustrate the intent of Congress to do that.
But Democratic Sens. Max Baucus of Montana, Mary Landrieu of Louisiana and Bill Nelson of Florida wrote to Treasury Secretary John Snow last week seeking assurances that people who received FEMA grants before the bill is enacted won't be charged the tax.
"The absence of statutory language providing retroactive relief creates a negative inference that payments received prior to the date of enactment are included in income," the senators wrote. They are pushing a separate bill that makes the tax exemption retroactive to 2003.
Foley said he hopes the "Senate will get their act together" and pass the bill soon. "There is a huge liability, potentially, for people who have already suffered enough," he said.
A spokesman for Landrieu said that while Friday's tax deadline is a concern, a bill that is retroactive doesn't necessarily have to be passed this week.
"We want to make sure that in our rush to get this wrapped up by tax day that we are not inadvertently setting people up to find out later that they weren't included," said Landrieu's spokesman, Adam Sharp.