Proposed moving expense limitation.

On June 28, 1992, Tax Executives Institute filed the following comments with the numbers of the congressional tax-writing committees on the proposed limitation on the deductibility of moving expenses in excess of $5,000. The provision was included in the House version of H.R. 11. The comments were prepared in connection with the Senate Finance Committee's, and ultimately, the Conference Committee's, consideration of the bill. TEI's comments were prepared under the aegis of its Federal Tax Committee, whose chair is David F. Nitschke of Amerada Hess Corp. and that committee's Employee Benefits Subcommittee, whose chair is David L. Klausman of Westinghouse Electric Corp.

On July 2, the House of Representatives approved H.R. 11, the Revenue Act of 1992. As International President of Tax Executives Institute, I am writing to voice the Institute's opposition to the legislative proposal contained in H.R. 11 to limit the deductibility of moving expenses in excess of $5,000 per move. The proposal is devoid of any legitimate tax policy rationale. TEI recommends that the provision be rejected.

Background

Tax Executives Institute is the principal association of business tax executives in North America. The Institute's approximately 4,700 members represent more than 2,000 of the largest companies in the United States and Canada. TEI is dedicated to the development and effective implementation of sound tax policy, to promoting the uniform and equitable enforcement of the tax laws, and to reducing the cost and burden of administration and compliance to the benefit of taxpayers and the government alike. We believe that the diversity and training of our members enable us to bring an important, balanced, and practical perspective to the issues raised by the legislative proposal to limit the deductibility of moving expenses.

Description of House Proposal

Among the revenue-raising provisions in H.R. 11 is a proposal to amend section 217 of the Internal Revenue Code to modify the deduction for moving expenses. The modifications include (1) removing the separate $1,500 limitation for pre-move house-hunting expenses and temporary living expenses in the general location of the new employment, (2) imposing an overall cap of $5,000 on moving-expense deductions, (3) making reimbursed moving expenses an "above-the-line" deduction to the extent of any reimbursement, and (4) subjecting unreimbursed expenses to the two-percent floor for miscellaneous itemized deductions.

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