While the tug of war between Congress and the IRS continues, members of LLCs and limited partnerships have reason to be optimistic. A rescue plan is being worked on by Republican lawmakers, who are urging the IRS to withdraw the proposed rule. Sen. Bond announced that if the IRS tries to move forward with this plan, he will lead the fight to stop the increase. On the House side, Rep. Susan Myrick (R-NC), is the sponsor of H.R. 1247, a bill that would prohibit the Secretary of the Treasury from changing the treatment of partnership distributions to limited partners.
Says Sen. Bond, "It is my hope the IRS will do the right thing and withdraw this ill-conceived tax increase." Only time will tell.
Joan Szabo is a writer in McLean, Virginia, who has reported on tax issues for more than 11 years.