Waiting until the last minute is good drama but lousy tax policy

Year End Tax Dramas and the State of Tax Policy, a recent post by Professor Annette Nellen on her blog, 21st Century Taxation describes the recent flurry of letters between IRS Commissioner Shulman and the various tax-writing committees. It is not pretty, and it probably is not good policy.

Professor Nellen quotes Commissioner Shulman who has some strong opinions about putting off policy decisions.

I want to stress that it would be extremely detrimental to the entire tax filing season and to tens of millions of taxpayers if tax law changes affecting 2010 are deferred and then retroactively enacted in 2011. … it would be an unprecedented and daunting operational challenge to open the tax filing season under one set of tax laws with respect to AMT and extenders, begin accepting tax returns, and then have the law change.

The post then goes on to ask a few very pertinent questions about when tax rules should be set. Many people are dismayed at how Congress functions, and the annual ambiguity about taxes and regulations compounds the problem. This year, in addition to the usual uncertainty about the AMT, taxpayers also have no way to anticipate future tax rates and do not know the likely status of a long list of exemptions, deductions, and credits.

Check out Professor Nellen's blog post for a thoughtful treatment of the issue.
http://21stcenturytaxation.blogspot.com/2010/12/year-end-tax-dramas-and-state-of-tax.html