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Tax Law Changes

Negotiations that broke off earlier this week on legislation to make technical corrections in the 1986 tax law were on again today, reviving prospects for final action before Congress’s expected adjournment on Friday. The Senate Finance Committee issued a brief statement this evening saying that Senate negotiators had received a ”serious proposal” from their House counterparts that should be ”seriously considered. House and Senate tax committee aides declined to divulge details of the House proposal. The major sticking point in reaching a compromise has been a provision in the House bill that would repeal the ”completed contract accounting method” used by many defense contractors to defer part of their taxes until completion of a contract. The provision is one of several large revenue-raisers contained in the House bill to offset costs to the Treasury for a variety of tax breaks that are included in the technical corrections measure.t

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