Looming Tax Dilemma on the Horizon

If you think your tax filings this year have been confusing, just wait until next year’s. A new tax dilemma looms.

IRS Commissioner Cautions Americans on Next Filing Season

That was the warning IRS Commissioner Doug Shulman gave taxpayers. He said if Congress waits until after the November elections to determine next year’s tax rates, the 2013 filing season could be a disaster.

The 2011 tax filing season gave a preview of what could come. The IRS delayed the start of the filing season for some taxpayers. Washington made changes to the tax code the previous December, during a lame duck session of Congress.

The delay lasted weeks with some taxpayers having to wait until mid to late-February to file their returns.

A New Tax Dilemma

Tax filing seasons typically begin at the beginning of the new year, but the IRS had to reprogram its processing system due to the late-2010 changes.

With the Bush tax cuts and payroll tax cuts set to expire at the end of this year, Congress isn’t expected to do anything with an election season approaching. Action on those rates will likely come until after Nov. 6 Presidential election.

Also on Washington’s need-to-do list: the Alternative Minimum Tax and other tax breaks for research and development, ethanol production and those for teachers who buy supplies for the classroom.

If Congress doesn’t get its act together and resolve those matters, individual and some corporate taxpayers won’t know how high or low their tax burden will be, a situation Commissioner Shulman labeled “total confusion” for taxpayers.

Only time will tell whether Congress resolves these matters swiftly. With hope, they will allow taxpayers to plan ahead with a bit more certainty.

Face Your Own Tax Dilemma

But if you’re certain you owe back tax debt to the IRS, hiring a tax attorney can help bring your financial situation out of limbo and into safe waters.

Tax rates may change after the election, but a tax attorney knows all the ins and outs of the tax codes and what the changes mean for you. That can help you avoid “total confusion” when dealing with an IRS agent.

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