Max Baucus: “today Senator Grassley and I are taking a significant step forward in our efforts to simplify the tax code. Today, we…”

“today Senator Grassley and I are taking a significant step forward in our efforts to simplify the tax code. Today, we are introducing an important simplification legislation--the Uniform Definition of Child Act. This legislation is based on the support of many for simplification in this area of the tax law. The President's FY 2004 budget, which was released on April 15, 2002, includes a simplification proposal to provide a uniform definition of a qualifying child. This is the first in a series of Department of Treasury ``white papers'' on simplification. The concept of a uniform definition of qualifying child also enjoys support from the American Bar Association, the American Institute of CPAs, the Tax Executives Institute, the Internal Revenue Service's Taxpayer Advocate, and staff of the Joint Committee on Taxation. Under current law, the complexity in this area is daunting. There are five commonly used provisions that provide benefits to taxpayers with children: the dependency exemption, the child credit, the earned income credit, the dependent care credit, and head of household filing status. Each of the five provisions uses variations of four principal criteria to determine whether a taxpayer qualifies for applicable tax benefits with respect to a particular child: age of the child, relationship of the child to the taxpayer, residency of the child with the taxpayer, and the amount of financial support provided the child by the taxpayer.…”