BACK

As Congress adjourned on December 15, the House and Senate passed two

bills containing tax provisions, both of which are expected to be signed

into law by President Clinton. The first, H.R. 3594, the Installment Tax

Correction Act of 2000, reverses the repeal of the installment method for

accrual-method taxpayers, enacted in 1999. The second, H.R. 5662, the

Community Renewal Tax Relief Act of 2000, contained in H.R. 4577, the

Consolidated Appropriations Act, 2001, provides special tax incentives for

investment in renewal communities, extends the medical savings account

program, and provides rules on the taxation of securities futures

contracts. It also contains a number of administrative and technical

corrections provisions, including a provision clarifying the allowance of

tax benefits with respect to kidnapped children.

NOTE: The Installment Tax Correction Act of 2000 was signed into law

by President Clinton on December 28, 2000, as Pub. L. 106-573. The

Consolidated Appropriations Act, 2001, was signed into law December

21, 2000, as Pub. L. 106-554.

INSTALLMENT SALES

In 1999, the Ticket to Work and Work Improvements Act of 1999 repealed the

installment method for accrual-method taxpayers. After protests from many

small businesses and practitioners, the repeal itself has now been

repealed. Thus, accrual-method taxpayers will again be permitted to use

the installment method.

The repeal is effective with respect to sales and other dispositions

occurring on or after its date of enactment. However, the Installment Tax

Correction Act of 2000 also provides that the Code is to be applied and

administered as if the original provision had never been enacted.