Just as Congress was gearing up for hearings on the credit union tax exemption last week, the President's Advisory Panel on Federal Tax Reform was releasing its final report on proposed reforms to the tax code, which did not mention the credit union tax exemption.
The report, however, did recommend that "Effective action should be taken to ensure better oversight and governance of exempt organizations." That is exactly what leaders of the House Ways and Means Committee have been aiming to do with their ongoing series of oversight hearings on tax-exempt organizations, culminating, from a credit union perspective, in last week's hearing.
Among the recommendations of the panel were: limit the deduction of interest paid on home loans to no more than $1.1-million a year per family; abolish the alternative minimum tax; eliminate deductions for state and local income and property taxes, and reduce deductions for charitable donations.
The recommendations will not go anywhere soon, as they must first be endorsed by the Bush Administration, then be adopted by Congress as part of a major rewrite of the tax code, a project that would take many years to accomplish.
