Bipartisan Tax Fairness and Simplification Act of 2010
Bipartisan Tax Fairness and Simplification Act of 2010 – Declares as the purposes of this Act to: (1) make the federal individual income tax system simpler, fairer, and more transparent; (2) reduce the income tax rate on corporations, repeal the individual and corporate alternative minimum tax (AMT), and eliminate special tax preferences; and (3) reduce the federal budget deficit. Amends the Internal Revenue Code to: (1) reduce the number of tax brackets for individual taxpayers from six to three (i.e., 15, 25, and 35%); (2) increase the standard tax deduction; (3) eliminate miscellaneous itemized tax deductions after 2010; (4) exclude from gross income 35% of certain dividend income and gain on capital assets; (5) repeal the AMT for individuals; (6) allow a new tax credit for interest on state and local bonds; (7) revise rules for tax-exempt retirement plans and education tax credits and create tax-exempt Lifetime Savings Accounts; and (8) deny a tax deduction for punitive damages. Makes permanent specified provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 that: (1) increased the earned income, dependent care, and child tax credits; and (2) repealed limits on personal exemptions and itemized tax deductions. Requires the Internal Revenue Service (IRS), beginning on January 1, 2011, to provide taxpayers a simplified Easyfile pre-prepared income tax return and a one-page summary of federal spending on Social Security, Medicare, Medicaid, defense, and interest on the federal debt. Revises corporate and business-related taxation by: (1) imposing a flat 24% rate on the taxable income of corporations; (2) increasing the expensing allowance for depreciable assets; (3) repealing deferral of taxes on foreign income; and (4) requiring 30% withholding of certain payments to beneficiaries of foreign accounts. Directs the Congressional Budget Office (CBO) to identify and report to Congress on federal direct and indirect spending on businesses. Increases penalties for noncompliance with information reporting requirements. Sets forth rules and definitions for applying the economic substance doctrine to tax transactions. Imposes penalties for underpayments of tax due to transactions lacking in economic substance. Imposes a tax on Internet gambling.