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2013 tax season a 'disaster' if Congress dithers

2013 tax filing season could see 'total confusion' unless Congress deals with tax cuts set to expire before 2013. Tax breaks on several dozen items await lawmakers, IRS commissioner says. 

IRS聽commissioner Douglas Shulman warned Thursday of a disastrous 2013 tax filing season if Congress puts off dealing with聽tax聽cuts that are set to expire at the end of the year or have already expired.

If Congress waits until the end of the year or acts retroactively on expired聽tax聽laws, "you could have a real disaster in the filing season where there is total confusion" about existing聽tax聽law, Shulman said at the National Press Club. He said one result could be that the聽tax聽agency, as it did last year, would have to delay the opening of filing for some taxpayers.

Shulman noted that the 2001 and 2003 George W. Bush聽tax聽cuts are set to expire at the end of this year, as is the payroll聽tax聽cut that was enacted last year and extended by President Barack Obama in February. The future of all those聽tax聽breaks is certain to be contentious as the fall elections near and as Congress approaches year-end votes on spending legislation.

Shulman said lawmakers also must decide on changes to the alternative minimum聽tax聽and determine what to do about several dozen already-expired聽tax聽breaks in such areas as research and development, ethanol, and schoolteachers who buy supplies for their classrooms.

"It is an issue we are tracking closely and we are quite concerned about and we are hopeful that these pieces of legislation will pass sooner rather than later," Shulman said.

Last year some taxpayers had to wait until mid-to-late February to file their returns because Congress made changes to the 2010聽tax聽law in December and the聽IRS聽needed more time to reprogram its processing system.

Shulman also told reporters he planned to step down as commissioner when his term ends this autumn. He was nominated by Bush in late 2007.