6 Tax Predictions for 2012 — How Did I Do?

At this time last year, I published 6 tax predictions for 2012. Here’s how I did:

Prediction 1: Congress will extend the “2-month” payroll tax cut for the rest of the year.

Outcome: correct. They extended the 2% reduction in payroll taxes through 12/31/12.

Prediction 2: No tax reform will take place this year. It’s an election year so neither party will want to put forth anything that might rock the boat.

Outcome: correct.

Prediction 3: Once the elections are over, Congress will execute its favorite play — the punt — by extending the “Bush Tax Cuts” for another year or two. This will probably happen, with much drama, right before Christmas.

Outcome: incomplete. I still think they will extend all tax provisions for another year or two, but it obviously didn’t happen before Christmas!

Prediction 4: Most of the tax provisions that expire 12/31/11 (such as the AMT patch) will be extended along with the Bush Tax Cuts.

Outcome: incomplete, but again, I expect this to happen.

Prediction 5: Along with extending the Bush Tax Cuts and other tax provisions into 2013, Congress will either a) extend the payroll tax cut into 2013 or b) let the payroll tax cut expire but replace it with some other gimmick tax break.

Outcome: incomplete. I tend to lean toward option “b”, the “gimmick” option, for 2013 (as in, resuscitating the Making Work Pay credit). More on this when I give my predictions for 2013 in a few days.

Prediction 6: IRS efforts to regulate preparers will not have the desired effect, in 2012 or beyond. I think the result of this bureaucracy that is being created is that more burdens and annoyances will be placed on preparers, with no discernible benefit to consumers.

Outcome: correct. As of December 10, there are 304,077 unlicensed preparers who have not taken the RTRP exam. The deadline for passing the test is one year from today (12/31/13). That’s a lot of people who could be forced out of business if they don’t pass a basic, open-book test. Will the IRS extend the deadline? I was part of a Twitter debate about this last week. No one knows the answer.

Also, all the “buzz” around the RTRP designation seems to be generated from those of us in the blogosphere going back and forth with each other. I have heard NOTHING about the RTRP designation from the public at large. Nothing at all.

The IRS was supposed to launch a public relations campaign about the new licensing/registration requirements. Where has that campaign been? Are they waiting til after the 12/31/13 deadline passes?

I think it would be a stretch to say that these regulations are having the “desired effect.”

“This blog post, along with comments that may follow, should not be considered tax advice. Before you make final tax or financial decisions, please secure a professional tax advisor to give you advice about your unique situation. To secure Jason as your accountant, please click on the ‘Services’ link at the top of the page.”