Participants face a 27.5 percent penalty, but taxpayers in limited situations can qualify for a 5 percent penalty.

A taxpayer who sells the home after one year, for example, would qualify for half the maximum exclusion.

There will be times, of course, when taxpayers may not qualify for either a full or reduced exclusion.

Married taxpayers filing jointly with income up to $150,000 will qualify for the $1,200 check, though it phases out completely at $174,000, according to Mr. Jones.

Few taxpayers qualify for miscellaneous itemized deductions (Line 24), because they can be taken only to the extent they exceed 2 percent of A.G.I.

However, the taxpayer may qualify for ordinary loss treatment under IRC 1231.

The Finance Committee estimated that at least 100 million taxpayers would qualify.

But a taxpayer with a $30,000 income would qualify for a $900 deduction.

Mr. Klain said that only about 30 million taxpayers would not qualify for Mr. Gore's tax cuts.

Under another exception, taxpayers can qualify if they devote more than 100 hours to the business and their participation is not less than any other individual's that year.