There are more than a few reasons you are not hearing a lot from me on the plethora of tax law proposals before Congress.
In 1997 Congress passed and President Clinton signed the Tax Reform Act of 1997. It encompassed numerous revisions to the Internal Revenue Code. In 1998 another tax bill, the Tax Reform Act of 1998 was passed by Congress. I was invited to speak at a conference sponsored by University of Denver School of Law about this new law. I arrived in Colorado the night before I was to speak before 600 tax attorneys in a general session. For those of you who know the history of tax law, I had been invited by Clifton B. Kruse, one of the founding fathers of NAELA. This was a big deal.
At 7:00 PM the night before I was supposed to speak, President Clinton vetoed the bill. I quickly learned to tap dance.
And then once, one of my esteemed colleagues wrote an entire book on an important part of The Tax Reform Act of 1976. The law was due to take effect on January 1, 1977. Then, implementing the law was delayed until January 1, 1978. Implementing the law was delayed every year until 1981, when it was repealed without ever taking effect. The book party was great, but the book was moot.
Another well respected colleague wrote a book on IRAs that focused on what attorneys must know to assist clients in determining the best method to receive their IRA distributions. At the time, the owner of an IRA had to irrevocably elect to receive the benefits when they turned 70 ½. Also, there were at least five methods available, so making the proper decision was difficult.
I went to the book party the night the book was released. The next morning the Internal Revenue Service scrapped the entire existing process for determining IRA distributions, making her book worthless.
I spent two hours today reading various articles and reports speculating what would be included in the new tax law, if it is passed. Without having a clue of what will happen, I recommend my clients to review prior transactions to assure they have complied with the letter of the law. Given the half-written proposals circulating, this is a perfect time to correct any inadvertent errors they might have made and make sure they dot every “i” and cross every “t” to make sure they are not affected if the half-baked proposals circulating are passed.
While everyone else is busy trying to guess what is coming next, stick to the fixing the fundamentals. That way, whatever happens in Washington, whenever it eventually happens, you’ll be as prepared as anyone else. And once there is a clearer picture of what comes, I will contact you.