Now that tax season is over and the dust is settling, I have to say something - POLITICIANS MAKE ME NUTS! Please forgive me for shouting. Congress did something that ought to be forbidden. Yes, I know it's a long list but I refer specifically to the tax law changes passed in January 2013 that affected 2012.
By mid-December, all the computer
software and forms are locked in, ready to go. Any changes after
December 1 cause havoc. Consequently, we had plenty of that as IRS, fifty states, plus H&R Block, TurboTax, and all the other tax software companies scrambled to rewrite their programs and get updates out to the users.
You may recall the media reported that IRS was not able to accept 2012 tax return filings until January 31 and if the return included the form claiming education credits the filing acceptance date was delayed to February 14. However, the problems resulting from Congress members' inability to communicate with each other affected more than the IRS. Each change to federal tax law had to be reviewed and approved at the state level. States had to determine if they were going to honor those changes. Some did; some did not. Either way, software companies couldn't update their state programs until the states decided what to do.
Consequently, while federal tax forms eventually processed, things bogged down at the state level. In my office, there were stacks of returns ready to go except that Illinois didn't decide on a certain business-related form until nearly the end of February. Corporation returns are due March 15. Let's just say Illinois was cutting it pretty close. Glitches hit Minnesota individual filers and some Wisconsinites are still experiencing problems. I'm sure there were many other state issues.
In light of all this, I strongly recommend that Congress pass a new law - one that controls its own behavior. The law should prohibit any change to tax statute that will affect prior years. In addition, any changes that would impact current year should not be allowed if the implementation date is after November 30.
Either changes that need to be made are important or they are not. If they are critical, then the politicians should get the job done well before December. After all, none of this is a surprise to them and they would have about 300 days to talk it over and get it done before the November 30 deadline I would implement.