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Turns and Twists


Edsel

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How do we really feel about turns and twists from Congress messing with tax preparation?  Especially those which are retroactive to returns already filed months ago?

CBSLee, one of our more knowledgeable members, is often the quickest to display the latest pronouncements.  He has an aggressive view of these twists as the more of them that occur, the more service time and revenue is available to the tax prep industry.  I don't think anyone can disagree, and I have to give credit for this positive viewpoint.

What about the rest of us?  Just in the last year we have seen all manner of special devices hammered thru the IRS - Stimulus payments, PPP loans, Payroll Tax Credits, Deferrals, etc.  How do you feel when pmi is disallowed and then during March, Congress re-instates it??  After you have already filed a dozen returns that could have deducted it?  What about suddenly allowing people to bail out of their RMDs after they've already received them this year? 

These are just a couple examples of retroactive changes - and actually these retroactive changes are just the tip of the iceberg.   What about PPP loan forgiveness when tax laws disallow deductions paid from exempt income??  Not to mention the phone ringing off the hook from people who want you to apply for this & that benefit?  The phone ringing off the hook from people who didn't receive their stimulus, even though you cannot really make the IRS issue them a check?

This is 2020, and if you think 2021 will be "back to normal" - maybe we had best think again.  Presidents and/or Congress (irrespective of party) will be tampering with the IRS and taxes now that it is known that the IRS and our industry can be jerked around.  Not just this year - every year.  If "back to normal" means a return to stability, my feeling is that you can watch that ship sail into the sunset.  In particular, the appeal to politicians in an election year to tamper with the economy will not be something they will want to resist.

Am I the only one who feels jerked around?  Or am I too engrained in conservatism, so I can depend on a stable tax law for planning and preparation?

 

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I’m a liberal and I get pissed off mad when ‘little’ changes to the tax code (like PMI reinstatement) are done so far after the fact. Or in December, ferchrissake! I know what a headache this kind of stuff means for us.  My only redeeming factor is that most, if not all of my PMI clients don’t itemize anymore, and CA never conformed to PMI so no change there. I only have one client that took a stimulus loan, no PPP, and I’ll deal with the IRA withdrawals next year.  
 

 But holy crap.  Stable tax laws allow businesses to plan ahead, budget for capital improvements ... I’m so happy at least half of my clients are retired.

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We need a constitutional amendment that ANY tax law, from ANY taxing agency, must be enacted 3 months prior to the start of the year for which it is in effect!  The taxpayer should be allowed to plan.  (They won't, of course.)

Just imagine a March budget crunch rolling around, and congress, retroactively, reverts to the 2119 treatment of home sales.

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