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open-block";block.previousSibling.className+=" open-block";}</script><div class="mw-content-ltr mw-parser-output" lang="en" dir="ltr"><section class="mf-section-0" id="mf-section-0"> <style data-mw-deduplicate="TemplateStyles:r1257001546">.mw-parser-output .infobox-subbox{padding:0;border:none;margin:-3px;width:auto;min-width:100%;font-size:100%;clear:none;float:none;background-color:transparent}.mw-parser-output .infobox-3cols-child{margin:auto}.mw-parser-output .infobox .navbar{font-size:100%}@media screen{html.skin-theme-clientpref-night .mw-parser-output .infobox-full-data:not(.notheme)>div:not(.notheme)[style]{background:#1f1f23!important;color:#f8f9fa}}@media screen and (prefers-color-scheme:dark){html.skin-theme-clientpref-os .mw-parser-output .infobox-full-data:not(.notheme) div:not(.notheme){background:#1f1f23!important;color:#f8f9fa}}@media(min-width:640px){body.skin--responsive .mw-parser-output .infobox-table{display:table!important}body.skin--responsive .mw-parser-output .infobox-table>caption{display:table-caption!important}body.skin--responsive .mw-parser-output .infobox-table>tbody{display:table-row-group}body.skin--responsive .mw-parser-output .infobox-table tr{display:table-row!important}body.skin--responsive .mw-parser-output .infobox-table th,body.skin--responsive .mw-parser-output .infobox-table td{padding-left:inherit;padding-right:inherit}}</style><p>The <b>Tax Reform Act of 1986</b> (TRA) was passed by the <a href="/wiki/99th_United_States_Congress" title="99th United States Congress">99th United States Congress</a> and signed into law by President <a href="/wiki/Ronald_Reagan" title="Ronald Reagan">Ronald Reagan</a> on October 22, 1986. </p><table class="infobox"><caption class="infobox-title" style="padding-bottom:0.25em">Tax Reform Act of 1986</caption><tbody><tr><td colspan="2" class="infobox-image"><span typeof="mw:File"><a href="/wiki/File:Great_Seal_of_the_United_States_(obverse).svg" class="mw-file-description"><img alt="Great Seal of the United States" src="//upload.wikimedia.org/wikipedia/commons/thumb/5/5c/Great_Seal_of_the_United_States_%28obverse%29.svg/140px-Great_Seal_of_the_United_States_%28obverse%29.svg.png" decoding="async" width="140" height="140" class="mw-file-element" srcset="//upload.wikimedia.org/wikipedia/commons/thumb/5/5c/Great_Seal_of_the_United_States_%28obverse%29.svg/210px-Great_Seal_of_the_United_States_%28obverse%29.svg.png 1.5x, //upload.wikimedia.org/wikipedia/commons/thumb/5/5c/Great_Seal_of_the_United_States_%28obverse%29.svg/280px-Great_Seal_of_the_United_States_%28obverse%29.svg.png 2x" data-file-width="600" data-file-height="600"></a></span></td></tr><tr><th scope="row" class="infobox-label" style="padding-top:0.245em;line-height:1.15em;padding-right:0.65em">Long title</th><td class="infobox-data" style="text-align:left;line-height:1.3em">An Act to reform the internal revenue laws of the United States.</td></tr><tr><th scope="row" class="infobox-label" style="padding-top:0.245em;line-height:1.15em;padding-right:0.65em"><a href="/wiki/Acronym" title="Acronym">Acronyms</a> <style data-mw-deduplicate="TemplateStyles:r886047488">.mw-parser-output .nobold{font-weight:normal}</style><span class="nobold">(colloquial)</span></th><td class="infobox-data" style="text-align:left;line-height:1.3em">TRA</td></tr><tr><th scope="row" class="infobox-label" style="padding-top:0.245em;line-height:1.15em;padding-right:0.65em">Nicknames</th><td class="infobox-data" style="text-align:left;line-height:1.3em">Tax Reform Act of 1985</td></tr><tr><th scope="row" class="infobox-label" style="padding-top:0.245em;line-height:1.15em;padding-right:0.65em">Enacted by</th><td class="infobox-data" style="text-align:left;line-height:1.3em">the <a href="/wiki/99th_United_States_Congress" title="99th United States Congress">99th United States Congress</a></td></tr><tr><th scope="row" class="infobox-label" style="padding-top:0.245em;line-height:1.15em;padding-right:0.65em">Effective</th><td class="infobox-data" style="text-align:left;line-height:1.3em">October 22, 1986</td></tr><tr><th colspan="2" class="infobox-header" style="background:#bbddff">Citations</th></tr><tr><th scope="row" class="infobox-label" style="padding-top:0.245em;line-height:1.15em;padding-right:0.65em">Public law</th><td class="infobox-data" style="text-align:left;line-height:1.3em"><a rel="nofollow" class="external text" href="https://www.gpo.gov/fdsys/pkg/STATUTE-100/pdf/STATUTE-100-Pg2085.pdf">99-514</a></td></tr><tr><th scope="row" class="infobox-label" style="padding-top:0.245em;line-height:1.15em;padding-right:0.65em"><a href="/wiki/United_States_Statutes_at_Large" title="United States Statutes at Large"><span class="wrap">Statutes at Large</span></a></th><td class="infobox-data" style="text-align:left;line-height:1.3em">100 <a href="/wiki/United_States_Statutes_at_Large" title="United States Statutes at Large">Stat.</a> <a rel="nofollow" class="external text" href="https://legislink.org/us/stat-100-2085">2085</a></td></tr><tr><th colspan="2" class="infobox-header" style="background:#bbddff">Codification</th></tr><tr><th scope="row" class="infobox-label" style="padding-top:0.245em;line-height:1.15em;padding-right:0.65em">Titles amended</th><td class="infobox-data" style="text-align:left;line-height:1.3em"><a href="/wiki/Internal_Revenue_Code" title="Internal Revenue Code">26 U.S.C.: Internal Revenue Code</a></td></tr><tr><th scope="row" class="infobox-label" style="padding-top:0.245em;line-height:1.15em;padding-right:0.65em">U.S.C. sections amended</th><td class="infobox-data" style="text-align:left;line-height:1.3em"><a href="/wiki/Internal_Revenue_Code" title="Internal Revenue Code">26 U.S.C.</a> <a rel="nofollow" class="external text" href="https://www.law.cornell.edu/uscode/text/26/1">§ 1</a> et seq.</td></tr><tr><th colspan="2" class="infobox-header" style="background:#bbddff"><span class="nourlexpansion"><a rel="nofollow" class="external text" href="http://thomas.loc.gov/cgi-bin/bdquery/z?d099:HR03838:@@@R">Legislative history</a></span></th></tr><tr><td colspan="2" class="infobox-full-data" style="text-align:left;line-height:1.3em"><div><ul style="line-height:1.3em;text-align:left"><li><b>Introduced</b> in the House as <a rel="nofollow" class="external text" href="https://www.congress.gov/bill/99th-congress/house-bill/3838">H.R. 3838</a> by <a href="/wiki/Dan_Rostenkowski" title="Dan Rostenkowski">Dan Rostenkowski</a> (<a href="/wiki/Democratic_Party_(United_States)" title="Democratic Party (United States)">D</a>–<a href="/wiki/Illinois" title="Illinois">IL</a>) on December 3, 1985</li><li><b>Committee consideration</b> by <a href="/wiki/United_States_House_Committee_on_Ways_and_Means" title="United States House Committee on Ways and Means">House Ways and Means</a>, <a href="/wiki/United_States_Senate_Committee_on_Finance" title="United States Senate Committee on Finance">Senate Finance</a></li><li><b>Passed the House</b> on December 17, 1985 (passed voice vote)</li><li><b>Passed the Senate</b> on June 24, 1986 (<a rel="nofollow" class="external text" href="https://www.govtrack.us/congress/votes/99-1986/s529">97-3</a>)</li><li><b>Reported by the joint conference committee</b> on September 18, 1986; <b>agreed to by the House</b> on September 25, 1986 (<a rel="nofollow" class="external text" href="https://www.govtrack.us/congress/votes/99-1986/h818">292-136</a>) and by the <b>Senate</b> on September 27, 1986 (<a rel="nofollow" class="external text" href="https://www.govtrack.us/congress/votes/99-1986/s677">74-23</a>)</li><li><b>Signed into law</b> by President <a href="/wiki/Ronald_Reagan" title="Ronald Reagan">Ronald Reagan</a> on October 22, 1986</li></ul></div></td></tr></tbody></table> <p>The Tax Reform Act of 1986 was the top domestic priority of President Reagan's second term. The act lowered federal income tax rates, decreasing the number of tax brackets and reducing the top tax rate from 50 percent to 28 percent. The act also expanded the <a href="/wiki/Earned_income_tax_credit" title="Earned income tax credit">earned income tax credit</a>, the <a href="/wiki/Standard_deduction" title="Standard deduction">standard deduction</a>, and the <a href="/wiki/Personal_exemption" title="Personal exemption">personal exemption</a>, removing approximately six million lower-income Americans from the tax base. Offsetting these cuts, the act increased the <a href="/wiki/Alternative_minimum_tax" title="Alternative minimum tax">alternative minimum tax</a> and eliminated many tax deductions, including deductions for rental housing, <a href="/wiki/Individual_retirement_account" title="Individual retirement account">individual retirement accounts</a>, and <a href="/wiki/Depreciation" title="Depreciation">depreciation</a>. </p><p>Although the tax reform was projected to be revenue-neutral, it was popularly referred to as the second round of <a href="/wiki/Reagan_tax_cuts" title="Reagan tax cuts">Reagan tax cuts</a> (following the <a href="/wiki/Economic_Recovery_Tax_Act_of_1981" title="Economic Recovery Tax Act of 1981">Economic Recovery Tax Act of 1981</a>). The bill passed with majority support in both the <a href="/wiki/United_States_House_of_Representatives" title="United States House of Representatives">House of Representatives</a> and the <a href="/wiki/United_States_Senate" title="United States Senate">Senate</a>, receiving the votes of majorities among both congressional <a href="/wiki/Republican_Party_(United_States)" title="Republican Party (United States)">Republicans</a> and <a href="/wiki/Democratic_Party_(United_States)" title="Democratic Party (United States)">Democrats</a>, including Democratic Speaker of the House <a href="/wiki/Tip_O%27Neill" title="Tip O'Neill">Tip O'Neill</a>. </p> <div id="toc" class="toc" role="navigation" aria-labelledby="mw-toc-heading"><input type="checkbox" role="button" id="toctogglecheckbox" class="toctogglecheckbox" style="display:none"><div class="toctitle" lang="en" dir="ltr"><h2 id="mw-toc-heading">Contents</h2><span class="toctogglespan"><label class="toctogglelabel" for="toctogglecheckbox"></label></span></div> <ul> <li class="toclevel-1 tocsection-1"><a href="#Passage"><span class="tocnumber">1</span> <span class="toctext">Passage</span></a></li> <li class="toclevel-1 tocsection-2"><a href="#Income_tax_rates"><span class="tocnumber">2</span> <span class="toctext">Income tax rates</span></a></li> <li class="toclevel-1 tocsection-3"><a href="#Tax_incentives"><span class="tocnumber">3</span> <span class="toctext">Tax incentives</span></a></li> <li class="toclevel-1 tocsection-4"><a href="#Fraudulent_dependents"><span class="tocnumber">4</span> <span class="toctext">Fraudulent dependents</span></a></li> <li class="toclevel-1 tocsection-5"><a href="#Changes_to_the_AMT"><span class="tocnumber">5</span> <span class="toctext">Changes to the AMT</span></a></li> <li class="toclevel-1 tocsection-6"><a href="#Passive_losses_and_tax_shelters"><span class="tocnumber">6</span> <span class="toctext">Passive losses and tax shelters</span></a></li> <li class="toclevel-1 tocsection-7"><a href="#Tax_treatment_of_technical_service_firms_employing_certain_professionals"><span class="tocnumber">7</span> <span class="toctext">Tax treatment of technical service firms employing certain professionals</span></a></li> <li class="toclevel-1 tocsection-8"><a href="#Name_of_the_Internal_Revenue_Code"><span class="tocnumber">8</span> <span class="toctext">Name of the Internal Revenue Code</span></a></li> <li class="toclevel-1 tocsection-9"><a href="#References"><span class="tocnumber">9</span> <span class="toctext">References</span></a> <ul> <li class="toclevel-2 tocsection-10"><a href="#Works_cited"><span class="tocnumber">9.1</span> <span class="toctext">Works cited</span></a></li> </ul> </li> <li class="toclevel-1 tocsection-11"><a href="#External_links"><span class="tocnumber">10</span> <span class="toctext">External links</span></a></li> </ul> </div> </section><div class="mw-heading mw-heading2 section-heading" onclick="mfTempOpenSection(1)"><span class="indicator mf-icon mf-icon-expand mf-icon--small"></span><h2 id="Passage">Passage</h2><span class="mw-editsection"> <a role="button" href="/w/index.php?title=Tax_Reform_Act_of_1986&action=edit&section=1" title="Edit section: Passage" class="cdx-button cdx-button--size-large cdx-button--fake-button cdx-button--fake-button--enabled cdx-button--icon-only cdx-button--weight-quiet "> <span class="minerva-icon minerva-icon--edit"></span> <span>edit</span> </a> </span> </div><section class="mf-section-1 collapsible-block" id="mf-section-1"> <p>After his victory in the <a href="/wiki/1984_United_States_presidential_election" title="1984 United States presidential election">1984 presidential election</a>, President <a href="/wiki/Ronald_Reagan" title="Ronald Reagan">Ronald Reagan</a> made simplification of the tax code the central focus of his second term domestic agenda.<sup id="cite_ref-1" class="reference"><a href="#cite_note-1"><span class="cite-bracket">[</span>1<span class="cite-bracket">]</span></a></sup> Working with <a href="/wiki/Speaker_of_the_United_States_House_of_Representatives" title="Speaker of the United States House of Representatives">Speaker of the House</a> <a href="/wiki/Tip_O%27Neill" title="Tip O'Neill">Tip O'Neill</a>, a Democrat who also favored tax reform, Reagan overcame significant opposition from members of Congress in both parties to pass the Tax Reform Act of 1986.<sup id="cite_ref-2" class="reference"><a href="#cite_note-2"><span class="cite-bracket">[</span>2<span class="cite-bracket">]</span></a></sup> </p> </section><div class="mw-heading mw-heading2 section-heading" onclick="mfTempOpenSection(2)"><span class="indicator mf-icon mf-icon-expand mf-icon--small"></span><h2 id="Income_tax_rates">Income tax rates</h2><span class="mw-editsection"> <a role="button" href="/w/index.php?title=Tax_Reform_Act_of_1986&action=edit&section=2" title="Edit section: Income tax rates" class="cdx-button cdx-button--size-large cdx-button--fake-button cdx-button--fake-button--enabled cdx-button--icon-only cdx-button--weight-quiet "> <span class="minerva-icon minerva-icon--edit"></span> <span>edit</span> </a> </span> </div><section class="mf-section-2 collapsible-block" id="mf-section-2"> <p>The top tax rate for individuals for tax year 1987 was lowered from 50% to 33%.<sup id="cite_ref-3" class="reference"><a href="#cite_note-3"><span class="cite-bracket">[</span>3<span class="cite-bracket">]</span></a></sup> Many lower level tax brackets were consolidated, and the upper income level of the bottom rate (married filing jointly) was increased from $5,720/year to $29,750/year. This package ultimately consolidated tax brackets from fifteen levels of income to four levels of income.<sup id="cite_ref-4" class="reference"><a href="#cite_note-4"><span class="cite-bracket">[</span>4<span class="cite-bracket">]</span></a></sup> The <a href="/wiki/Standard_deduction" title="Standard deduction">standard deduction</a>, <a href="/wiki/Personal_exemption" title="Personal exemption">personal exemption</a>, and <a href="/wiki/Earned_income_credit" class="mw-redirect" title="Earned income credit">earned income credit</a> were also expanded, resulting in the removal of six million poor Americans from the income tax roll and a reduction of income tax liability across all income levels.<sup id="cite_ref-5" class="reference"><a href="#cite_note-5"><span class="cite-bracket">[</span>5<span class="cite-bracket">]</span></a></sup><sup id="cite_ref-6" class="reference"><a href="#cite_note-6"><span class="cite-bracket">[</span>6<span class="cite-bracket">]</span></a></sup> The higher standard deduction substantially simplified the preparation of tax returns for many individuals.<sup id="cite_ref-Longley2007-p.49_7-0" class="reference"><a href="#cite_note-Longley2007-p.49-7"><span class="cite-bracket">[</span>7<span class="cite-bracket">]</span></a></sup> </p><p>For tax year 1987, the Act provided a graduated rate structure of 15%/28%/33%. Beginning with tax year 1988, the Act provided a nominal rate structure of 15%/28%/33%.<sup class="noprint Inline-Template Template-Fact" style="white-space:nowrap;">[<i><a href="/wiki/Wikipedia:Citation_needed" title="Wikipedia:Citation needed"><span title="Text of the Act seems to say 15%/28%, not sure where the 33% bracket came from. (November 2021)">citation needed</span></a></i>]</sup> However, beginning with 1988, taxpayers having taxable income higher than a certain level were taxed at an effective rate of about 28%.<sup id="cite_ref-8" class="reference"><a href="#cite_note-8"><span class="cite-bracket">[</span>8<span class="cite-bracket">]</span></a></sup> This was jettisoned in the <a href="/wiki/Omnibus_Budget_Reconciliation_Act_of_1990" title="Omnibus Budget Reconciliation Act of 1990">Omnibus Budget Reconciliation Act of 1990</a>, otherwise known as the "Bush tax increase", which violated his <a href="/wiki/Read_my_lips:_no_new_taxes" title="Read my lips: no new taxes">Taxpayer Protection Pledge</a>. </p> </section><div class="mw-heading mw-heading2 section-heading" onclick="mfTempOpenSection(3)"><span class="indicator mf-icon mf-icon-expand mf-icon--small"></span><h2 id="Tax_incentives">Tax incentives</h2><span class="mw-editsection"> <a role="button" href="/w/index.php?title=Tax_Reform_Act_of_1986&action=edit&section=3" title="Edit section: Tax incentives" class="cdx-button cdx-button--size-large cdx-button--fake-button cdx-button--fake-button--enabled cdx-button--icon-only cdx-button--weight-quiet "> <span class="minerva-icon minerva-icon--edit"></span> <span>edit</span> </a> </span> </div><section class="mf-section-3 collapsible-block" id="mf-section-3"> <p>The Act also increased incentives favoring investment in owner-occupied housing relative to rental housing. Prior to the Act, all personal interest was deductible.<sup id="cite_ref-Tax_Policy_1_9-0" class="reference"><a href="#cite_note-Tax_Policy_1-9"><span class="cite-bracket">[</span>9<span class="cite-bracket">]</span></a></sup> Subsequently, only <a href="/wiki/Home_mortgage_interest_deduction" title="Home mortgage interest deduction">home mortgage interest</a> was deductible, including interest on home equity loans. The Act phased out many investment incentives for rental housing, through extending the depreciation period of rental property from 15–19 years to 27.5 years. It also discouraged real estate investing by eliminating the deduction for passive losses.<sup id="cite_ref-10" class="reference"><a href="#cite_note-10"><span class="cite-bracket">[</span>10<span class="cite-bracket">]</span></a></sup> To the extent that low-income people may be more likely to live in rental housing than in owner-occupied housing, this provision of the Act could have had the tendency to decrease the new supply of housing accessible to low-income people. The <a href="/wiki/Low-Income_Housing_Tax_Credit" title="Low-Income Housing Tax Credit">Low-Income Housing Tax Credit</a> was added to the Act to provide some balance and encourage investment in multifamily housing for the poor. </p><p>Moreover, interest on consumer loans such as credit card debt was no longer deductible. An existing provision in the tax code, called Income Averaging, which reduced taxes for those only recently making a much higher salary than before, was eliminated (although later partially reinstated, for farmers in 1997 and for fishermen in 2004). The Act, however, increased the personal exemption and standard deduction. </p><p>The <a href="/wiki/Individual_retirement_account" title="Individual retirement account">individual retirement account</a> (IRA) deduction was severely restricted. The IRA had been created as part of the <a href="/wiki/Employee_Retirement_Income_Security_Act_of_1974" title="Employee Retirement Income Security Act of 1974">Employee Retirement Income Security Act of 1974</a>, where employees not covered by a pension plan could contribute the lesser of $1500 or 15% of earned income.<sup id="cite_ref-11" class="reference"><a href="#cite_note-11"><span class="cite-bracket">[</span>11<span class="cite-bracket">]</span></a></sup> The <a href="/wiki/Economic_Recovery_Tax_Act_of_1981" title="Economic Recovery Tax Act of 1981">Economic Recovery Tax Act of 1981</a> (ERTA) removed the pension plan clause and raised the contribution limit to the lesser of $2000 or 100% of earned income. The 1986 Tax Reform Act retained the $2000 contribution limit, but restricted the deductibility for households that have pension plan coverage and have moderate to high incomes. Non-deductible contributions were allowed. </p><p><a href="/wiki/Depreciation" title="Depreciation">Depreciation</a> deductions were also curtailed. Prior to ERTA, depreciation was based on "useful life" calculations provided by the Treasury Department. ERTA set up the "accelerated cost recovery system" (ACRS). This set up a series of useful lives based on three years for technical equipment, five years for non-technical office equipment, ten years for industrial equipment, and fifteen years for real property. TRA86 lengthened these lives, and lengthened them further for taxpayers covered by the alternative minimum tax (AMT). These latter, longer lives approximate "economic depreciation," a concept economists have used to determine the actual life of an asset relative to its economic value. </p><p>Defined contribution (DC) pension contributions were curtailed. The law prior to TRA86 was that DC pension limits were the lesser of 25% of compensation or $30,000. This could be accomplished by any combination of elective deferrals and profit sharing contributions. TRA86 introduced an elective deferral limit of $7000, indexed to inflation. Since the profit sharing percentage must be uniform for all employees, this had the intended result of making more equitable contributions to 401(k)'s and other types of DC pension plans. </p><p>The 1986 Tax Reform Act introduced the General Nondiscrimination rules which applied to qualified pension plans and 403(b) plans that for private sector employers. It did not allow such pension plans to discriminate in favor of highly compensated employees. A highly compensated employee for the purposes of testing a plan's compliance for the 2006 plan year is any employee whose compensation exceeded $95,000 in the 2005 plan year. Therefore, all new hires are by definition nonhighly compensated employees. A plan could not give benefits or contributions on a more favorable basis for the highly compensated employees if it cannot pass the minimum coverage test and the minimum participation test. </p> </section><div class="mw-heading mw-heading2 section-heading" onclick="mfTempOpenSection(4)"><span class="indicator mf-icon mf-icon-expand mf-icon--small"></span><h2 id="Fraudulent_dependents">Fraudulent dependents</h2><span class="mw-editsection"> <a role="button" href="/w/index.php?title=Tax_Reform_Act_of_1986&action=edit&section=4" title="Edit section: Fraudulent dependents" class="cdx-button cdx-button--size-large cdx-button--fake-button cdx-button--fake-button--enabled cdx-button--icon-only cdx-button--weight-quiet "> <span class="minerva-icon minerva-icon--edit"></span> <span>edit</span> </a> </span> </div><section class="mf-section-4 collapsible-block" id="mf-section-4"> <p>The Act required people claiming children as dependents on their tax returns to obtain and list a <a href="/wiki/Social_Security_number" title="Social Security number">Social Security number</a> for every claimed child, to verify the child's existence. Before this act, parents claiming <a href="/wiki/Tax_deduction" title="Tax deduction">tax deductions</a> were on the <a href="/wiki/Honor_system" title="Honor system">honor system</a> not to lie about the number of children they supported. The requirement was phased in, and initially Social Security numbers were required only for children over the age of 5. During the first year, this anti-fraud change resulted in seven million fewer dependents being claimed, nearly all of which are believed to have involved either children that never existed, or tax deductions improperly claimed by non-custodial parents.<sup id="cite_ref-12" class="reference"><a href="#cite_note-12"><span class="cite-bracket">[</span>12<span class="cite-bracket">]</span></a></sup> </p> </section><div class="mw-heading mw-heading2 section-heading" onclick="mfTempOpenSection(5)"><span class="indicator mf-icon mf-icon-expand mf-icon--small"></span><h2 id="Changes_to_the_AMT">Changes to the AMT</h2><span class="mw-editsection"> <a role="button" href="/w/index.php?title=Tax_Reform_Act_of_1986&action=edit&section=5" title="Edit section: Changes to the AMT" class="cdx-button cdx-button--size-large cdx-button--fake-button cdx-button--fake-button--enabled cdx-button--icon-only cdx-button--weight-quiet "> <span class="minerva-icon minerva-icon--edit"></span> <span>edit</span> </a> </span> </div><section class="mf-section-5 collapsible-block" id="mf-section-5"> <p>The original <a href="/wiki/Alternative_minimum_tax" title="Alternative minimum tax">alternative minimum tax</a> targeted tax shelters used by a few wealthy households. However, the Tax Reform Act of 1986 greatly expanded the AMT to aim at a different set of deductions that most Americans receive. Things like the personal exemption, state and local taxes, the standard deduction, <a href="/wiki/Private_activity_bond" title="Private activity bond">private activity bond</a> interest, certain expenses like union dues and even some medical costs for the seriously ill could now trigger the AMT. In 2007, the New York Times reported, "A law for untaxed rich investors was refocused on families who own their homes in high tax states."<sup id="cite_ref-13" class="reference"><a href="#cite_note-13"><span class="cite-bracket">[</span>13<span class="cite-bracket">]</span></a></sup> </p> </section><div class="mw-heading mw-heading2 section-heading" onclick="mfTempOpenSection(6)"><span class="indicator mf-icon mf-icon-expand mf-icon--small"></span><h2 id="Passive_losses_and_tax_shelters">Passive losses and tax shelters</h2><span class="mw-editsection"> <a role="button" href="/w/index.php?title=Tax_Reform_Act_of_1986&action=edit&section=6" title="Edit section: Passive losses and tax shelters" class="cdx-button cdx-button--size-large cdx-button--fake-button cdx-button--fake-button--enabled cdx-button--icon-only cdx-button--weight-quiet "> <span class="minerva-icon minerva-icon--edit"></span> <span>edit</span> </a> </span> </div><section class="mf-section-6 collapsible-block" id="mf-section-6"> <p><a href="/wiki/Internal_Revenue_Code" title="Internal Revenue Code">26 U.S.C.</a> <a rel="nofollow" class="external text" href="https://www.law.cornell.edu/uscode/text/26/469">§ 469</a> (relating to limitations on deductions for passive activity losses and limitations on passive activity credits) removed many <a href="/wiki/Tax_shelter" title="Tax shelter">tax shelters</a>, especially for real estate investments. This contributed to the end of the real estate boom of the early-to-mid 1980s, which in turn was the primary cause of the U.S. <a href="/wiki/Savings_and_loan_crisis" title="Savings and loan crisis">savings and loan crisis</a>. </p><p>Prior to 1986, passive investors were able to use real estate losses to offset taxable income. When losses from these deals were no longer able to be deducted, many investors sold their assets, which contributed to sinking real estate prices. </p><p>To help small landlords, The Tax Reform Act of 1986 included a temporary $25,000 net rental loss deduction, provided that the property was not personally used for the greater of 14 days or 10% of rental days, and adjusted gross income was less than $100,000. </p> </section><div class="mw-heading mw-heading2 section-heading" onclick="mfTempOpenSection(7)"><span class="indicator mf-icon mf-icon-expand mf-icon--small"></span><h2 id="Tax_treatment_of_technical_service_firms_employing_certain_professionals">Tax treatment of technical service firms employing certain professionals</h2><span class="mw-editsection"> <a role="button" href="/w/index.php?title=Tax_Reform_Act_of_1986&action=edit&section=7" title="Edit section: Tax treatment of technical service firms employing certain professionals" class="cdx-button cdx-button--size-large cdx-button--fake-button cdx-button--fake-button--enabled cdx-button--icon-only cdx-button--weight-quiet "> <span class="minerva-icon minerva-icon--edit"></span> <span>edit</span> </a> </span> </div><section class="mf-section-7 collapsible-block" id="mf-section-7"> <p>The Internal Revenue Code does not contain any definition or rules dealing with the issue of when a worker should be characterized for tax purposes as an employee, rather than as an independent contractor. The tax treatment depends on the application of (20) factors provided by common law, which varies by state. </p><p>Introduced by <a href="/wiki/United_States_Senate" title="United States Senate">Senator</a> <a href="/wiki/Daniel_Patrick_Moynihan" title="Daniel Patrick Moynihan">Daniel Patrick Moynihan</a>, Section 1706 added a subsection (d) to Section 530 of the <a href="/wiki/Revenue_Act_of_1978" title="Revenue Act of 1978">Revenue Act of 1978</a>, which removed "safe harbor" exception for independent contractor classification (which at the time avoided payroll taxes) for workers such as engineers, designers, drafters, computer professionals, and "similarly skilled" workers. </p><p>If the IRS determines that a third-party intermediary firm's worker previously treated as self-employed should have been classified as an employee, the IRS assesses substantial back taxes, penalties and interest on that third-party intermediary company, though not directly against the worker or the end client.<sup id="cite_ref-irs_14-0" class="reference"><a href="#cite_note-irs-14"><span class="cite-bracket">[</span>14<span class="cite-bracket">]</span></a></sup> It does not apply to individuals directly contracted to clients.<sup id="cite_ref-medlawplus_15-0" class="reference"><a href="#cite_note-medlawplus-15"><span class="cite-bracket">[</span>15<span class="cite-bracket">]</span></a></sup> </p><p>The change in the tax code was expected to offset tax revenue losses of other legislation Moynihan proposed that changed the law on foreign taxes of Americans working abroad.<sup id="cite_ref-16" class="reference"><a href="#cite_note-16"><span class="cite-bracket">[</span>16<span class="cite-bracket">]</span></a></sup> At least one firm simply adapted its business model to the new regulations.<sup id="cite_ref-17" class="reference"><a href="#cite_note-17"><span class="cite-bracket">[</span>17<span class="cite-bracket">]</span></a></sup> A 1991 Treasury Department study found that tax compliance for technology professionals was among the highest of all self-employed workers and that Section 1706 would raise no additional tax revenue and could possibly result in losses as self-employed workers did not receive as many tax-free benefits as employees.<sup id="cite_ref-archive_18-0" class="reference"><a href="#cite_note-archive-18"><span class="cite-bracket">[</span>18<span class="cite-bracket">]</span></a></sup> </p><p>In one report in 2010, Moynihan's initiative was labeled "a favor to <a href="/wiki/IBM" title="IBM">IBM</a>."<sup id="cite_ref-19" class="reference"><a href="#cite_note-19"><span class="cite-bracket">[</span>19<span class="cite-bracket">]</span></a></sup> A suicide note by software professional <a href="/wiki/Joseph_Stack" class="mw-redirect" title="Joseph Stack">Joseph Stack</a>, who flew his airplane into a building housing IRS offices in February 2010, blamed his problems on many factors, including the Section 1706 change in the tax law while even mentioning Senator Moynihan by name, though no intermediary firm is mentioned, and failure to file a return was admitted.<sup id="cite_ref-webcitation_20-0" class="reference"><a href="#cite_note-webcitation-20"><span class="cite-bracket">[</span>20<span class="cite-bracket">]</span></a></sup> </p> </section><div class="mw-heading mw-heading2 section-heading" onclick="mfTempOpenSection(8)"><span class="indicator mf-icon mf-icon-expand mf-icon--small"></span><h2 id="Name_of_the_Internal_Revenue_Code">Name of the Internal Revenue Code</h2><span class="mw-editsection"> <a role="button" href="/w/index.php?title=Tax_Reform_Act_of_1986&action=edit&section=8" title="Edit section: Name of the Internal Revenue Code" class="cdx-button cdx-button--size-large cdx-button--fake-button cdx-button--fake-button--enabled cdx-button--icon-only cdx-button--weight-quiet "> <span class="minerva-icon minerva-icon--edit"></span> <span>edit</span> </a> </span> </div><section class="mf-section-8 collapsible-block" id="mf-section-8"> <p>Section 2(a) of the Act also officially changed the name of the <a href="/wiki/Internal_Revenue_Code" title="Internal Revenue Code">Internal Revenue Code</a> from the <i>Internal Revenue Code of 1954</i> to the <i><a href="/wiki/Internal_Revenue_Code_of_1986" class="mw-redirect" title="Internal Revenue Code of 1986">Internal Revenue Code of 1986</a></i>. Although the Act made numerous amendments to the 1954 Code, it was not a re-enactment or a substantial re-codification or reorganization of the overall structure of the 1954 Code. Thus, the tax laws since 1954 (including those after 1986) have taken the form of amendments to the 1954 Code, although it is now called the 1986 Code. </p> </section><div class="mw-heading mw-heading2 section-heading" onclick="mfTempOpenSection(9)"><span class="indicator mf-icon mf-icon-expand mf-icon--small"></span><h2 id="References">References</h2><span class="mw-editsection"> <a role="button" href="/w/index.php?title=Tax_Reform_Act_of_1986&action=edit&section=9" title="Edit section: References" class="cdx-button cdx-button--size-large cdx-button--fake-button cdx-button--fake-button--enabled cdx-button--icon-only cdx-button--weight-quiet "> <span class="minerva-icon minerva-icon--edit"></span> <span>edit</span> </a> </span> </div><section class="mf-section-9 collapsible-block" id="mf-section-9"> <style data-mw-deduplicate="TemplateStyles:r1239543626">.mw-parser-output .reflist{margin-bottom:0.5em;list-style-type:decimal}@media screen{.mw-parser-output .reflist{font-size:90%}}.mw-parser-output .reflist .references{font-size:100%;margin-bottom:0;list-style-type:inherit}.mw-parser-output .reflist-columns-2{column-width:30em}.mw-parser-output .reflist-columns-3{column-width:25em}.mw-parser-output .reflist-columns{margin-top:0.3em}.mw-parser-output .reflist-columns ol{margin-top:0}.mw-parser-output .reflist-columns li{page-break-inside:avoid;break-inside:avoid-column}.mw-parser-output .reflist-upper-alpha{list-style-type:upper-alpha}.mw-parser-output .reflist-upper-roman{list-style-type:upper-roman}.mw-parser-output .reflist-lower-alpha{list-style-type:lower-alpha}.mw-parser-output .reflist-lower-greek{list-style-type:lower-greek}.mw-parser-output .reflist-lower-roman{list-style-type:lower-roman}</style><div class="reflist reflist-columns references-column-width" style="column-width: 30em;"> <ol class="references"> <li id="cite_note-1"><span class="mw-cite-backlink"><b><a href="#cite_ref-1">^</a></b></span> <span class="reference-text">Brands, pp. 540-541</span> </li> <li id="cite_note-2"><span class="mw-cite-backlink"><b><a href="#cite_ref-2">^</a></b></span> <span class="reference-text">Brands, pp. 542-544</span> </li> <li id="cite_note-3"><span class="mw-cite-backlink"><b><a href="#cite_ref-3">^</a></b></span> <span class="reference-text">Tax Rate Schedules, page 47, Instructions for 1987 Form 1040, Internal Revenue Service, U.S. Dep't of the Treasury.</span> </li> <li id="cite_note-4"><span class="mw-cite-backlink"><b><a href="#cite_ref-4">^</a></b></span> <span class="reference-text"><style data-mw-deduplicate="TemplateStyles:r1238218222">.mw-parser-output cite.citation{font-style:inherit;word-wrap:break-word}.mw-parser-output .citation q{quotes:"\"""\"""'""'"}.mw-parser-output .citation:target{background-color:rgba(0,127,255,0.133)}.mw-parser-output .id-lock-free.id-lock-free a{background:url("//upload.wikimedia.org/wikipedia/commons/6/65/Lock-green.svg")right 0.1em center/9px no-repeat}.mw-parser-output .id-lock-limited.id-lock-limited a,.mw-parser-output .id-lock-registration.id-lock-registration a{background:url("//upload.wikimedia.org/wikipedia/commons/d/d6/Lock-gray-alt-2.svg")right 0.1em center/9px no-repeat}.mw-parser-output .id-lock-subscription.id-lock-subscription a{background:url("//upload.wikimedia.org/wikipedia/commons/a/aa/Lock-red-alt-2.svg")right 0.1em center/9px no-repeat}.mw-parser-output .cs1-ws-icon a{background:url("//upload.wikimedia.org/wikipedia/commons/4/4c/Wikisource-logo.svg")right 0.1em center/12px no-repeat}body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-free a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-limited a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-registration a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-subscription a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .cs1-ws-icon a{background-size:contain;padding:0 1em 0 0}.mw-parser-output .cs1-code{color:inherit;background:inherit;border:none;padding:inherit}.mw-parser-output .cs1-hidden-error{display:none;color:var(--color-error,#d33)}.mw-parser-output .cs1-visible-error{color:var(--color-error,#d33)}.mw-parser-output .cs1-maint{display:none;color:#085;margin-left:0.3em}.mw-parser-output .cs1-kern-left{padding-left:0.2em}.mw-parser-output .cs1-kern-right{padding-right:0.2em}.mw-parser-output .citation .mw-selflink{font-weight:inherit}@media screen{.mw-parser-output .cs1-format{font-size:95%}html.skin-theme-clientpref-night .mw-parser-output .cs1-maint{color:#18911f}}@media screen and (prefers-color-scheme:dark){html.skin-theme-clientpref-os .mw-parser-output .cs1-maint{color:#18911f}}</style><cite class="citation web cs1"><a rel="nofollow" class="external text" href="https://files.taxfoundation.org/legacy/docs/fed_individual_rate_history_nominal.pdf">"Federal Individual Income Tax Rates History"</a> <span class="cs1-format">(PDF)</span>. TaxFoundation.org. 1913–2013<span class="reference-accessdate">. Retrieved <span class="nowrap">2023-09-08</span></span>.</cite><span title="ctx_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Abook&rft.genre=unknown&rft.btitle=Federal+Individual+Income+Tax+Rates+History&rft.pub=TaxFoundation.org&rft.date=1913%2F2013&rft_id=https%3A%2F%2Ffiles.taxfoundation.org%2Flegacy%2Fdocs%2Ffed_individual_rate_history_nominal.pdf&rfr_id=info%3Asid%2Fen.wikipedia.org%3ATax+Reform+Act+of+1986" class="Z3988"></span></span> </li> <li id="cite_note-5"><span class="mw-cite-backlink"><b><a href="#cite_ref-5">^</a></b></span> <span class="reference-text"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1238218222"><cite id="CITEREFBrownleeGraham2003" class="citation book cs1">Brownlee, Elliot; Graham, Hugh Davis (2003). <i>The Reagan Presidency: Pragmatic Conservatism & Its Legacies</i>. Lawrence, Kansas: University of Kansas Press. pp. 172–173.</cite><span title="ctx_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Abook&rft.genre=book&rft.btitle=The+Reagan+Presidency%3A+Pragmatic+Conservatism+%26+Its+Legacies&rft.place=Lawrence%2C+Kansas&rft.pages=172-173&rft.pub=University+of+Kansas+Press&rft.date=2003&rft.aulast=Brownlee&rft.aufirst=Elliot&rft.au=Graham%2C+Hugh+Davis&rfr_id=info%3Asid%2Fen.wikipedia.org%3ATax+Reform+Act+of+1986" class="Z3988"></span></span> </li> <li id="cite_note-6"><span class="mw-cite-backlink"><b><a href="#cite_ref-6">^</a></b></span> <span class="reference-text"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1238218222"><cite id="CITEREFSteuerle1992" class="citation book cs1">Steuerle, C. Eugene (1992). <a rel="nofollow" class="external text" href="https://archive.org/details/taxdecadehowtaxe0000steu/page/122"><i>The Tax Decade: How Taxes Came to Dominate the Public Agenda</i></a>. Washington D.C.: The Urban Institute Press. p. <a rel="nofollow" class="external text" href="https://archive.org/details/taxdecadehowtaxe0000steu/page/122">122</a>. <a href="/wiki/ISBN_(identifier)" class="mw-redirect" title="ISBN (identifier)">ISBN</a> <a href="/wiki/Special:BookSources/0-87766-523-0" title="Special:BookSources/0-87766-523-0"><bdi>0-87766-523-0</bdi></a>.</cite><span title="ctx_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Abook&rft.genre=book&rft.btitle=The+Tax+Decade%3A+How+Taxes+Came+to+Dominate+the+Public+Agenda&rft.place=Washington+D.C.&rft.pages=122&rft.pub=The+Urban+Institute+Press&rft.date=1992&rft.isbn=0-87766-523-0&rft.aulast=Steuerle&rft.aufirst=C.+Eugene&rft_id=https%3A%2F%2Farchive.org%2Fdetails%2Ftaxdecadehowtaxe0000steu%2Fpage%2F122&rfr_id=info%3Asid%2Fen.wikipedia.org%3ATax+Reform+Act+of+1986" class="Z3988"></span></span> </li> <li id="cite_note-Longley2007-p.49-7"><span class="mw-cite-backlink"><b><a href="#cite_ref-Longley2007-p.49_7-0">^</a></b></span> <span class="reference-text"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1238218222"><cite id="CITEREFLongleyMayerSchallerSloan2007" class="citation book cs1">Longley, Kyle; Mayer, Jeremy D.; Schaller, Michael; Sloan, John W. (2007). <i>Deconstructing Reagan: Conservative Mythology and America's Fortieth President</i>. Armonk, N.Y.: M.E. Sharpe. p. 49. <a href="/wiki/ISBN_(identifier)" class="mw-redirect" title="ISBN (identifier)">ISBN</a> <a href="/wiki/Special:BookSources/978-0-7656-1590-9" title="Special:BookSources/978-0-7656-1590-9"><bdi>978-0-7656-1590-9</bdi></a>.</cite><span title="ctx_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Abook&rft.genre=book&rft.btitle=Deconstructing+Reagan%3A+Conservative+Mythology+and+America%27s+Fortieth+President&rft.place=Armonk%2C+N.Y.&rft.pages=49&rft.pub=M.E.+Sharpe&rft.date=2007&rft.isbn=978-0-7656-1590-9&rft.aulast=Longley&rft.aufirst=Kyle&rft.au=Mayer%2C+Jeremy+D.&rft.au=Schaller%2C+Michael&rft.au=Sloan%2C+John+W.&rfr_id=info%3Asid%2Fen.wikipedia.org%3ATax+Reform+Act+of+1986" class="Z3988"></span></span> </li> <li id="cite_note-8"><span class="mw-cite-backlink"><b><a href="#cite_ref-8">^</a></b></span> <span class="reference-text">Tax Rate Schedules, page 51, Instructions for 1988 Form 1040, Internal Revenue Service, U.S. Dep't of the Treasury.</span> </li> <li id="cite_note-Tax_Policy_1-9"><span class="mw-cite-backlink"><b><a href="#cite_ref-Tax_Policy_1_9-0">^</a></b></span> <span class="reference-text"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1238218222"><cite class="citation web cs1"><a rel="nofollow" class="external text" href="http://www.taxpolicycenter.org/sites/default/files/briefing-book/4.8.2-do_existing_tax_incentives_increase_homeownership.pdf">"Do existing tax incentives increase homeownership?"</a> <span class="cs1-format">(PDF)</span>. Taxpolicycenter.org. <a rel="nofollow" class="external text" href="https://web.archive.org/web/20180119214832/http://www.taxpolicycenter.org/sites/default/files/briefing-book/4.8.2-do_existing_tax_incentives_increase_homeownership.pdf">Archived</a> <span class="cs1-format">(PDF)</span> from the original on 2018-01-19<span class="reference-accessdate">. Retrieved <span class="nowrap">2018-01-19</span></span>. <q>Contrary to popular belief, the mortgage interest deduction was not added to the tax code to encourage home ownership. The deduction existed at the birth of the income tax in 1913—a tax explicitly designed to hit only the richest individuals, a group for whom homeownership rates were not a social concern</q></cite><span title="ctx_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Abook&rft.genre=unknown&rft.btitle=Do+existing+tax+incentives+increase+homeownership%3F&rft.pub=Taxpolicycenter.org&rft_id=http%3A%2F%2Fwww.taxpolicycenter.org%2Fsites%2Fdefault%2Ffiles%2Fbriefing-book%2F4.8.2-do_existing_tax_incentives_increase_homeownership.pdf&rfr_id=info%3Asid%2Fen.wikipedia.org%3ATax+Reform+Act+of+1986" class="Z3988"></span></span> </li> <li id="cite_note-10"><span class="mw-cite-backlink"><b><a href="#cite_ref-10">^</a></b></span> <span class="reference-text"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1238218222"><cite id="CITEREFCordato1991" class="citation journal cs1">Cordato, Roy E. (June 1991). <a rel="nofollow" class="external text" href="https://crab.rutgers.edu/users/mchugh/taxes/Destroying%20real%20estate%20through%20the%20tax%20code_%20%28Tax%20Reform%20Act%20of%201986%29.htm">"Destroying real estate through the tax code. (Tax Reform Act of 1986)"</a>. <i>The CPA Journal Online</i><span class="reference-accessdate">. Retrieved <span class="nowrap">2023-01-23</span></span>.</cite><span title="ctx_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Ajournal&rft.genre=article&rft.jtitle=The+CPA+Journal+Online&rft.atitle=Destroying+real+estate+through+the+tax+code.+%28Tax+Reform+Act+of+1986%29&rft.date=1991-06&rft.aulast=Cordato&rft.aufirst=Roy+E.&rft_id=https%3A%2F%2Fcrab.rutgers.edu%2Fusers%2Fmchugh%2Ftaxes%2FDestroying%2520real%2520estate%2520through%2520the%2520tax%2520code_%2520%2528Tax%2520Reform%2520Act%2520of%25201986%2529.htm&rfr_id=info%3Asid%2Fen.wikipedia.org%3ATax+Reform+Act+of+1986" class="Z3988"></span></span> </li> <li id="cite_note-11"><span class="mw-cite-backlink"><b><a href="#cite_ref-11">^</a></b></span> <span class="reference-text"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1238218222"><cite id="CITEREFGraney2004" class="citation book cs1">Graney, Paul J. (2004). <a rel="nofollow" class="external text" href="https://books.google.com/books?id=XYaDryRx2IYC&pg=PA45"><i>Retirement Savings Plans</i></a>. Nova Publishers. p. 45. <a href="/wiki/ISBN_(identifier)" class="mw-redirect" title="ISBN (identifier)">ISBN</a> <a href="/wiki/Special:BookSources/159033907X" title="Special:BookSources/159033907X"><bdi>159033907X</bdi></a>.</cite><span title="ctx_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Abook&rft.genre=book&rft.btitle=Retirement+Savings+Plans&rft.pages=45&rft.pub=Nova+Publishers&rft.date=2004&rft.isbn=159033907X&rft.aulast=Graney&rft.aufirst=Paul+J.&rft_id=https%3A%2F%2Fbooks.google.com%2Fbooks%3Fid%3DXYaDryRx2IYC%26pg%3DPA45&rfr_id=info%3Asid%2Fen.wikipedia.org%3ATax+Reform+Act+of+1986" class="Z3988"></span></span> </li> <li id="cite_note-12"><span class="mw-cite-backlink"><b><a href="#cite_ref-12">^</a></b></span> <span class="reference-text"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1238218222"><cite id="CITEREFJeffrey_B._Liebman2000" class="citation journal cs1">Jeffrey B. Liebman (December 2000). <a rel="nofollow" class="external text" href="https://web.archive.org/web/20170809020256/http://www.ntanet.org/NTJ/53/4/ntj-v53n04p1165-86-who-are-ineligible-eitc.pdf">"Who Are the Ineligible EITC Recipients?"</a> <span class="cs1-format">(PDF)</span>. <i>National Tax Journal</i>. <b>53</b> (4, Part 2): 1165–1186. <a href="/wiki/Doi_(identifier)" class="mw-redirect" title="Doi (identifier)">doi</a>:<a rel="nofollow" class="external text" href="https://doi.org/10.17310%2Fntj.2000.4S1.06">10.17310/ntj.2000.4S1.06</a>. <a href="/wiki/S2CID_(identifier)" class="mw-redirect" title="S2CID (identifier)">S2CID</a> <a rel="nofollow" class="external text" href="https://api.semanticscholar.org/CorpusID:35405024">35405024</a>. Archived from <a rel="nofollow" class="external text" href="https://www.ntanet.org/NTJ/53/4/ntj-v53n04p1165-86-who-are-ineligible-eitc.pdf">the original</a> <span class="cs1-format">(PDF)</span> on 2017-08-09<span class="reference-accessdate">. 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Retrieved <span class="nowrap">3 November</span> 2017</span>.</cite><span title="ctx_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Ajournal&rft.genre=article&rft.jtitle=The+New+York+Times&rft.atitle=Taxes+-+Alternative+Minimum+Tax+-+The+Untaxed+Rich%2C+Found+and+Then+Lost&rft.date=2007-03-04&rft.aulast=Johnston&rft.aufirst=David+Cay&rft_id=https%3A%2F%2Fwww.nytimes.com%2F2007%2F03%2F04%2Fweekinreview%2F04johnston.html%3F_r%3D1&rfr_id=info%3Asid%2Fen.wikipedia.org%3ATax+Reform+Act+of+1986" class="Z3988"></span></span> </li> <li id="cite_note-irs-14"><span class="mw-cite-backlink"><b><a href="#cite_ref-irs_14-0">^</a></b></span> <span class="reference-text"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1238218222"><cite class="citation web cs1"><a rel="nofollow" class="external text" href="https://www.irs.gov/irm/part4/irm_04-023-005r.html">"Internal Revenue Manual - 4.23.5 Technical Guidelines for Employment Tax Issues"</a>. irs.gov<span class="reference-accessdate">. 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Archived from <a rel="nofollow" class="external text" href="http://www.medlawplus.com/legalforms/instruct/revrul87-41.htm">the original</a> on 2001-07-31<span class="reference-accessdate">. Retrieved <span class="nowrap">2014-06-13</span></span>.</cite><span title="ctx_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Abook&rft.genre=unknown&rft.btitle=IRS+Rev.+Rul.+87-41&rft_id=http%3A%2F%2Fwww.medlawplus.com%2Flegalforms%2Finstruct%2Frevrul87-41.htm&rfr_id=info%3Asid%2Fen.wikipedia.org%3ATax+Reform+Act+of+1986" class="Z3988"></span></span> </li> <li id="cite_note-16"><span class="mw-cite-backlink"><b><a href="#cite_ref-16">^</a></b></span> <span class="reference-text"><a rel="nofollow" class="external text" href="https://www.nytimes.com/1987/02/22/nyregion/new-tax-law-threatens-high-tech-consultants.html?scp=5&sq=%22Section%201706%22&st=cse">"New Tax Law threatens high-tech consultants"</a> by Karla Jennings, <i>The New York Times</i>, February 22, 1987. Retrieved 2010-06-17.</span> </li> <li id="cite_note-17"><span class="mw-cite-backlink"><b><a href="#cite_ref-17">^</a></b></span> <span class="reference-text">Andrew Davis, Synergistech Communications. Laws affecting Brokered Independent Contractors' tax status. 2007-03. URL:<a rel="nofollow" class="external free" href="http://www.synergistech.com/ic-taxlaw.shtml">http://www.synergistech.com/ic-taxlaw.shtml</a>. 2010-08-22. (Archived by WebCite at)</span> </li> <li id="cite_note-archive-18"><span class="mw-cite-backlink"><b><a href="#cite_ref-archive_18-0">^</a></b></span> <span class="reference-text"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1238218222"><cite class="citation web cs1"><a rel="nofollow" class="external text" href="https://archive.org/stream/taxationoftechni01unit#page/n0/mode/2up">"Taxation of technical services personnel : section 1706 of the Tax Reform Act of 1986 : a report to the Congress"</a>. 1991<span class="reference-accessdate">. Retrieved <span class="nowrap">2014-06-13</span></span>.</cite><span title="ctx_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Abook&rft.genre=unknown&rft.btitle=Taxation+of+technical+services+personnel+%3A+section+1706+of+the+Tax+Reform+Act+of+1986+%3A+a+report+to+the+Congress&rft.date=1991&rft_id=https%3A%2F%2Farchive.org%2Fstream%2Ftaxationoftechni01unit%23page%2Fn0%2Fmode%2F2up&rfr_id=info%3Asid%2Fen.wikipedia.org%3ATax+Reform+Act+of+1986" class="Z3988"></span></span> </li> <li id="cite_note-19"><span class="mw-cite-backlink"><b><a href="#cite_ref-19">^</a></b></span> <span class="reference-text"><a rel="nofollow" class="external text" href="https://www.nytimes.com/2010/02/19/us/19tax.html">"Tax Law Was Cited in Software Engineer’s Suicide Note"</a> by David Kay Johnston, <i>The New York Times</i>, February 18, 2010. Retrieved 2010-06-17.</span> </li> <li id="cite_note-webcitation-20"><span class="mw-cite-backlink"><b><a href="#cite_ref-webcitation_20-0">^</a></b></span> <span class="reference-text"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1238218222"><cite class="citation web cs1"><a rel="nofollow" class="external text" href="https://web.archive.org/web/20100227020404/http://www.embeddedart.com/">"WebCite query result"</a>. webcitation.org. Archived from the original on February 27, 2010<span class="reference-accessdate">. Retrieved <span class="nowrap">2014-06-13</span></span>.</cite><span title="ctx_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Abook&rft.genre=unknown&rft.btitle=WebCite+query+result&rft.pub=webcitation.org&rft_id=http%3A%2F%2Fwww.embeddedart.com%2F&rfr_id=info%3Asid%2Fen.wikipedia.org%3ATax+Reform+Act+of+1986" class="Z3988"></span> <span class="cs1-visible-error citation-comment"><code class="cs1-code">{{<a href="/wiki/Template:Cite_web" title="Template:Cite web">cite web</a>}}</code>: </span><span class="cs1-visible-error citation-comment">Cite uses generic title (<a href="/wiki/Help:CS1_errors#generic_title" title="Help:CS1 errors">help</a>)</span><span class="cs1-maint citation-comment">CS1 maint: unfit URL (<a href="/wiki/Category:CS1_maint:_unfit_URL" title="Category:CS1 maint: unfit URL">link</a>)</span></span> </li> </ol></div> <div class="mw-heading mw-heading3"><h3 id="Works_cited">Works cited</h3><span class="mw-editsection"> <a role="button" href="/w/index.php?title=Tax_Reform_Act_of_1986&action=edit&section=10" title="Edit section: Works cited" class="cdx-button cdx-button--size-large cdx-button--fake-button cdx-button--fake-button--enabled cdx-button--icon-only cdx-button--weight-quiet "> <span class="minerva-icon minerva-icon--edit"></span> <span>edit</span> </a> </span> </div> <ul><li><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1238218222"><cite id="CITEREFBrands2015" class="citation book cs1">Brands, H.W. (2015). <i>Reagan: The Life</i>. New York: Doubleday.</cite><span title="ctx_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Abook&rft.genre=book&rft.btitle=Reagan%3A+The+Life&rft.place=New+York&rft.pub=Doubleday&rft.date=2015&rft.aulast=Brands&rft.aufirst=H.W.&rfr_id=info%3Asid%2Fen.wikipedia.org%3ATax+Reform+Act+of+1986" class="Z3988"></span></li></ul> </section><div class="mw-heading mw-heading2 section-heading" onclick="mfTempOpenSection(10)"><span class="indicator mf-icon mf-icon-expand mf-icon--small"></span><h2 id="External_links">External links</h2><span class="mw-editsection"> <a role="button" href="/w/index.php?title=Tax_Reform_Act_of_1986&action=edit&section=11" title="Edit section: External links" class="cdx-button cdx-button--size-large cdx-button--fake-button cdx-button--fake-button--enabled cdx-button--icon-only cdx-button--weight-quiet "> <span class="minerva-icon minerva-icon--edit"></span> <span>edit</span> </a> </span> </div><section class="mf-section-10 collapsible-block" id="mf-section-10"> <ul><li><a rel="nofollow" class="external text" href="http://www.ctj.org/html/taxvotes.htm">Campaign 2000 Information Page</a>, <a href="/wiki/Citizens_for_Tax_Justice" title="Citizens for Tax Justice">Citizens for Tax Justice</a> "scorecard."</li> <li><i>Showdown at Gucci Gulch: Lawmakers, <a href="/wiki/Lobbyist" class="mw-redirect" title="Lobbyist">Lobbyists</a> and the Unlikely Triumph of Tax Reform</i> (1987), by <a href="/wiki/Jeffrey_Birnbaum" title="Jeffrey Birnbaum">Jeffrey Birnbaum</a> and <a href="/w/index.php?title=Alan_Murray_(journalist)&action=edit&redlink=1" class="new" title="Alan Murray (journalist) (page does not exist)">Alan Murray</a>, is a book about the bill's passage.</li> <li><a rel="nofollow" class="external text" href="https://www.scribd.com/doc/62544151/PL-99-514-Tax-Reform-Act-of-1986">Full text of the Act</a></li> <li>Apps, P. F. (2010, June). <a rel="nofollow" class="external text" href="http://sydney.edu.au/law/about/staff/PatriciaApps/henryreview_tax_reform_21062010.pdf">Why the Henry Review Fails on Family Tax Reform</a>. In <i>Australia’s Future Tax System: A Post-Henry Review'Conference, Sydney</i>.</li></ul> <div class="navbox-styles"><style data-mw-deduplicate="TemplateStyles:r1129693374">.mw-parser-output .hlist dl,.mw-parser-output .hlist ol,.mw-parser-output .hlist ul{margin:0;padding:0}.mw-parser-output .hlist dd,.mw-parser-output .hlist dt,.mw-parser-output .hlist li{margin:0;display:inline}.mw-parser-output .hlist.inline,.mw-parser-output .hlist.inline dl,.mw-parser-output .hlist.inline ol,.mw-parser-output .hlist.inline ul,.mw-parser-output .hlist dl dl,.mw-parser-output .hlist dl ol,.mw-parser-output .hlist dl ul,.mw-parser-output .hlist ol dl,.mw-parser-output .hlist ol ol,.mw-parser-output .hlist ol ul,.mw-parser-output .hlist ul dl,.mw-parser-output .hlist ul ol,.mw-parser-output .hlist ul ul{display:inline}.mw-parser-output .hlist .mw-empty-li{display:none}.mw-parser-output .hlist dt::after{content:": "}.mw-parser-output .hlist dd::after,.mw-parser-output .hlist li::after{content:" · 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