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Thursday, June 01, 2006

PROPOSED IMMIGRATION LAW CONTAINS INCOME TAX PROVISIONS

Congress, and many in the nation, are divided on many of the issues of immigration reform. On May 25, the Senate passed the “Comprehensive Immigration Reform Act of 2006” (S. 2611) by a vote of 62 to 36. Accordingly, the bill is now ready for conferencing with the House-passed “Border Protection, Antiterrorism, and Illegal Immigration Control Act of 2005” (H.R. 4437).

In conference, members of the House and Senate will try to reconcile the two different bills into one that can be approved by Congress, which if not vetoed by President Bush, would become law. The Senate version has income tax provisions included. Under the Senate version, illegal immigrants seeking a change in status (e.g., from illegal to legal alien) would be be required to pay all outstanding tax liabilities. Further, they would also would be barred from collecting a tax refund for tax years before 2006, and from filing a claim for the Code Sec. 32 earned income tax credit or any other tax credit otherwise allowable under the Code before 2006.

Until the conference committee works out the differences between the House and Senate version, we won't know whether these tax provisions will find their way into the final bill.

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