Two bills that were introduced within the past few weeks take on tax breaks and tax reporting.

The CUT Loopholes Act (CUT being the acronym for Cut Unjustified Tax), or S. 2075, was introduced by Senators Carl Levin (D-Mich.) and Senator Kent Conrad (D-North Dakota).

According to Senator Levin, the bill would reduce the deficit by $155 billion by closing tax loopholes that favor wealthy individuals and corporations.

Among other provisions, S. 2075 would give Treasury the authority to go after banks that help U.S. citizens hide assets in offshore tax havens. It also would clarify when the Foreign Account Tax Compliance Act could require foreign financial institutions and U.S. citizens to report foreign financial accounts to the IRS. The legislation also would establish the presumption that, unless a taxpayer proves otherwise, a corporation formed by, receiving assets from or benefitting a U.S. taxpayer is considered under that taxpayer's control for tax purposes. These provisions and others would reduce the deficit by at least $130 billion over 10 years, Levin said.

Levin said the Act would cut another $25 billion from the deficit over ten years by preventing companies from taking income tax deductions for stock options that exceed the expense shown on company books. However, it would preserve the current tax treatment for individuals receiving options, and for incentive stock options used by start-ups companies.

After its introduction, S. 2075 was referred to the Senate Finance committee. Currently, Levin and Conrad are the only sponsors listed. However, the bill has picked up the support of the Financial Accountability and Corporate Transparency (FACT) Coalition. Members of FACT include the AFL-CIO, Citizens for Tax Justice and OpenTheGovernment.org.

Another bill, H.R. 3877, or the 1099K Overreach Prevention Act, takes on tax-reporting requirements involving the new Form 1099-K. Representative Aaron Schock (R-Il) is the sponsor; among the co-sponsors are Dan Burton (R-IN), and Reid Ribble (R-WI).

H.R. 3877 would amend the IRS code. The code requires the IRS to collect a new document, the 1099K, from credit card companies. The 1099K shows all credit transactions within a merchant's business for a given year. "Unfortunately, the IRS is using the 1099K to add additional burdens on small business tax forms by requiring them to reconcile this report with the merchant's own internal numbers, which was NOT the original intent of the law," Schock said. He added that the two numbers could differ as a result of customers asking for cash back or returning merchandise bought on credit for cash; these transactions wouldn't automatically show up on the reports generated by the credit card company.

This bill has picked up support from both the National Federation of Independent Businesses and the U.S. Chamber of Commerce. "We want to applaud Congressmen Schock and Schilling for introducing a bill that will restrict the IRS from placing this unprecedented paperwork mandate on the backs of small businesses who accept merchant payment cards," said Giovanni Coratolo, vice president of small business policy for the U.S. Chamber of Commerce.

It also has a companion bill in the Senate, introduced by Senators John Thune (R-SD) and Maria Cantwell (D-Wash.) in early February. "This bi-partisan measure will relieve many small businesses from burdensome tax reporting requirements that could be costly and very time consuming," Cantwell said.

After its introduction, H.R. 3877 was referred to the House Ways and Means Committee. The status of the bill introduced in the Senate by Senators Thune and Cantwell wasn't available at press time.