Tags: irs | tax

IRS Chief: Congress Inaction Risks 2013 Tax 'Disaster'

Thursday, 05 Apr 2012 04:15 PM

The commissioner of the U.S. tax-collecting Internal Revenue Service warned on Thursday of "a real disaster" for taxpayers next year should Congress miss a Dec. 31 voting deadline to renew major tax provisions.

Congress is expected to wait after Election Day, Nov. 6, to take up whether to extend the individual income tax cuts passed under former president George W. Bush that expire at the end of the year.

Democrats want to extend the cuts only for the poor and the middle class, while Republicans want them extended for the wealthy as well — setting up a contentious period that may not be resolved quickly.

Editor's Note:The IRS’ Worst Nightmare — How to Pay Zero Taxes

Allowing tax provisions to be unsettled as 2013 begins will cause confusion for taxpayers, said Douglas Shulman, IRS commissioner, speaking at the National Press Club in Washington.

"We're going to have real risk in the system," if Congress delays, Shulman said.

"You could have a real disaster in the filing season where there's total confusion," especially for the alternative-minimum tax "patch," he said.

The alternative minimum tax is a parallel tax system that applies to higher-income taxpayers. A legislative fix to index it for inflation must be approved before year's end to prevent the tax from hitting taxpayers in lower income brackets.

In the absence of congressional action by Jan. 1, the IRS might be forced to delay the tax-filing season, which begins promptly with the new year, Shulman said.

As it is, Congress faces a huge workload for the two-month "lame-duck" period after the elections when about $650 billion of tax and spending provisions expire.

Editor's Note:The IRS’ Worst Nightmare — How to Pay Zero Taxes

 

© 2017 Thomson/Reuters. All rights reserved.

 
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2012-15-05
Thursday, 05 Apr 2012 04:15 PM
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