Congress has officially passed their signature tax sell out plan. The plan guarantees a big payday for the wealthy at the expense of the middle class and the poor. While there are genuinely troubling aspects of this tax plan, there are also logistical concerns.
Tax professionals and human resources departments across the country are readying themselves for what is sure to be chaos in just 12 days when the new tax code goes into effect. Payroll companies have that short window of time to figure out the new withholding rules that will impact every American’s paycheck.
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The IRS and Treasury Department have to create new regulations to accompany the overhauled tax code. Those rules must exist to efficiently implement the new law, which ostensibly goes into effect in 12 short days. The problem is, these changes affect any number of tax situations for individuals and corporations large and small.
Better yet, the IRS does not currently have a permanent commissioner. The agency will be tasked with writing all of the new regulation without long-term leadership. Additionally, the IRS has seen funding declines that bring into question the agencies ability to handle the new workload.
Kevin Brady (R-TX) is the Chairman of the House Ways and Means committee. Brady has acknowledged that Congress will undoubtedly have to pass further legislation to make corrections to the tax bill as the problems inherent in it are discovered through its implementation.
Senator John Thune (R-SD) also acknowledged as much saying, “There will always be bumps in implementation with the IRS, and probably technical corrections to follow.”
People who live in high tax states like New York and New Jersey are scrambling to see if they can pre-pay their 2018 taxes ahead of the bill’s implementation as they are now capped in the amount of state and local taxes they can deduct from their federal taxes. However, pre-paying 2018 income taxes was specifically banned by the GOP in negotiations over the bill.
Larry Stone is a Democratic fundraiser who has become the county assessor in Santa Clara, CA. He suggests people talk with a tax professional before taking any action on the bill. His feeling encapsulates the current logistical dilemma. He said, “The problem is, this thing is being changed almost by the hour, and we’re getting close to the end of the year.”
Featured Image via YouTube Video