2011: What Got Done, What Didn’t, Now What ?
Posted by lynnnicholscpa on January 8, 2012
2011 is history, but reverberations will continue until after Congressional elections in November 2012. Let’s start with what got done in 2011. Obviously the payroll tax cut and it’s heavily debated extension would be fresh in our memory. The most significant failure, of course, was the descent into partisan bickering of the so-called “super committee.” That was the last hope for meaningful action on over 100 various tax provisions; some now expired, some really creative new proposals, but all doomed to perish in the quagmire of political posturing.
What did get done was several significant enforcement initiatives: one against U.S. citizens using foreign bank accounts to hide assets and income from the IRS; another requiring registration, education, and testing of tax return preparers; and finally, robust enforcement of Treasury Circular 230 ethical standards against CPAs, EAs, and Attorneys who failed to exercise “due diligence” in preparing returns or giving tax advice. Congress may be paralyzed, but Doug Shulman is fully mobilized.
How about those expired tax provisions I mentioned earlier ? Here are just a few: enhanced AMT exemptions and available personal credits; State and local sales tax deduction option; teacher’s $250 deduction for classroom supplies; 100% bonus depreciation; enhanced Sec. 179 deduction (the 2012 limit will be $139,000); research credit; and 15 year cost recovery for “Qualified” leasehold improvements, restaurant property, and retail property.
That’s not a complete list. Depending on how you count, there are over 60 provisions that were allowed to expire . . .at least for now. No doubt, some will be the subject of late restoration efforts . . . and Congress can do that . . . change the law for 2012 anytime before December 31, 2012, it would not be “retroactive.” Confusing . . . chaotic . . . but not retroactive.
Shouldn’t the legislative process produce whatever tax changes are going to be made in time for taxpayers and their advisors to comply without special efforts and to plan with some certainty ?
