Late in December Congress passed this bill composed of a number of
popular tax breaks, and the bill was signed into law on December 20, 2006.
The problem with such late changes is that it becomes difficult to correct
tax forms to accommodate these changes. In this particular case, the IRS
has indicated that tax forms will not be updated, but instead they will
provide instructions for how the taxpayer can modify the form to include
these items when appropriate. As of this writing, those instructions
have not been issued.
The other issue that results is the inability of the IRS to process forms
with these tax benefits. The last word is that all such returns will have
processing delayed into February.
We are making no attempt to detail all the many provisions of this bill.
However, we have addressed the most common ones below which are divided
into the following categories:
For the most part, these provisions are tax incentives that everyone
knew would be extended. Thus they became political tools to attempt to
gain votes for other provisions throughout the year.
These provisions would be attached to an unrelated bill, in the hope
of putting pressure on its opponents to pass the bill anyway.
End the end, either those bills failed, or these provisions were removed.
That leaves Congress with the task of cleaning up the issues before
the end of the year. So now we have these late changes to deal with.
"Tax software is no substitute for tax knowledge."
Any views expressed herein are based on our best information. The content of this web site was written as general information without specific individual information and thus may not apply in all situations. This material was not written, and cannot be used by the taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer.