'Disaster' looms for 2013 tax season
Lawmakers have put off major tax decisions, including whether to continue the Bush tax cuts, until after the Nov. 6 election. That doesn't leave much time to make changes.
You think this tax season is difficult?
Next tax filing season could be a "real disaster," IRS Commissioner Douglas Shulman said Thursday, if Congress doesn't make key tax decisions before Jan. 1.
"You could have a real disaster in the filing season where there is total confusion," Shulman said during a speech at the National Press Club.
Members of Congress strongly disagree on tax policy and most have agreed to put off any substantive changes until after Nov. 6 elections. That doesn't leave much time to make decisions and revamp IRS procedures before the traditional Jan. 1 beginning of tax season.
And there are a lot of decisions to be made.
- The tax cuts exacted in 2001 and 2003 under President George W. Bush will expire at the end of 2012 unless Congress votes to extend them. Tax rates also will rise. (Post continues after video.)
- The Social Security payroll tax cut that lawmakers extended earlier this year after some resistance expires Dec. 31.
- The alternative minimum tax patch, a perennial congressional favorite, expires at the end of the year. If Congress takes no action, millions of Americans will face a take hike next year.
- Lawmakers may want to renew some tax breaks that have already expired.
- Whoever is elected president is likely to have some new tax initiatives.
Both President Barack Obama and his GOP rivals have expressed a desire for changes in the tax system, but neither side can muster the votes in Congress for a specific plan now. Whether the votes are there after the election is anyone's guess.
This year's tax filing season was able to go forward with little trouble because Congress didn't make any substantive changes at year's end. But the previous year, some taxpayers had to wait for the IRS to conform to late-breaking changes in the law and couldn't file their returns until mid-February.
In his prepared remarks, which focused on improvements made at the IRS in recent years, Shulman also noted that the agency relies on some technology dating from the 1960s and spends less than 3% of its budget on improvements to its technology infrastructure.
More from MSN Money:
Abolish the current Federal income tax system and implement the Fair Tax national sales tax now. It's about time! No more congressional tax games. It replaces the current 70,000+ pages of tax code with 120 pages that we can all understand. Congressional bills HR-25 and S-13 have been introduced and have 74 co-sponsors. See fairtax . org to learn about it and let congress know you support it.
Enough already! Change has to happen. A tax policy needs to be in place by the end of the year for the year 2013. Are the politicians in Washington, public servants? They are supposed to be. So here is what I am going to look into.
Forcing our public servant politicians to do work.
We have a task: Put a tax policy together for 2013
We have employees today that can make decisions: Politicians
We have a president today: Obama (and I could care less whether I like this guy or not. I also care less whether the local grocery store cart attendant becomes President in 2013. Right now we have a issue and it needs solved now.)
Vacations: Denied, get this settled now
I am tired of paying these people to avoid topics of tomorrow that need solutions today. It is April and the intelligent move is to table discussions until November. It is our fault. We are the ones voting these idiots into office.
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