When do tax laws become "final"?

At what point can one reasonably assume the tax laws (regulations? codes?) are final for 2008?

December 31, 2007? December 31, 2008? April 15, 2009? or some other date?

Is there a difference between "reasonably certain" and "absolutely certain"?

========================================= MODERATOR'S COMMENT: While "never" is a bit strong, it's pretty close. Since we cannot sit around forever, we each make assumptions about stability of the tax code and go from there.

Reply to
Ted
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It depends on the provision. It's an election year, so you're pretty safe in assuming there will be no major changes.

AFAIK there's been no extender bill passed yet regarding the things that they dribble out year by year, such as sales tax deduction and educator expenses, and there will be the traditional hoo-haw about AMT I assume.

I suspect that they'll actually get things nailed down by Labor Day this year so they can go home and campaign for re-election based on their zeal for tax simplification.

Reply to
Phil Marti

Lets say they do it by Labor Day. Can they still change thing later?

========================================= MODERATOR'S COMMENT: Last year, the 2007 AMT rules weren't signed into law until late December or early January. The Economic Stumulus Act Rebate wasn't settled until even later in 2008, and is still changing as we speak!

Reply to
Ted

Congress can pass a law that takes effect any time they want it to. Normally there is a lead time before it goes into effect, but they can have make it effective immediately.

To know when a particular law becomes effective, you have to read the law. Once they pass it can they change it before it becomes effective? Yes.

Stu

Reply to
Stuart Bronstein

Or even retroactively.

Reply to
Kurt Ullman

So there is no safe time to know the tax laws are final... okay. Generally speaking, about when in the year are they "usually" "essentially" final for that year.

Reply to
Ted

I'd think you're be pretty safe by Christmas - of the year you are concerned about, of course.

Stu

Reply to
Stuart Bronstein

"Ted" wrote

For sure by December 31st.........not sure what year though. Pretty sure we're set on the 2007 return year laws.

The bulk of the tax laws are already "final" for 2008, as there are no whispers of changes in most tax laws. It's those things that you hear about this fall that may get changed (the usual suspects, AMT, extenders, etc), and some past changes have been well into the new year and they make them retroactive to the beginning of the prior year.

If there is a specific section that you have concerns about, there are many sources to see what legislative actions are pending in those areas. Most of those reporting sources are pay-to-play, so it's not worth it to pay for information you don't need, but someone here might subscribe to the updates that concern you. Ask and you might receive some useful information on pending legislative changes concerning topics related to you.

Reply to
Paul Thomas, CPA

When the President signs it or Congress overrides his veto - just like any other federal law.

Reply to
D. Stussy

I think that is basically his concern. Is there a drop-dead time for the Congress to pass it, etc.? In theory, probably 12-32-08. In real life, whenever Congress adjourns for Christmas, usually around 12-15 or so.

Reply to
Kurt Ullman

But remember that the economic stimulus package, which approved the tax rebates this year, wasn't passed until February.

In most cases, if there's something still up in the air at the end of the year, it's reasonably well known.

Reply to
Barry Margolin

Have never understood how it could (or should) be anything other than the first of these, given the phrase in Article I, Section 9, of the Constitution, which proves that: "No . . . ex post facto Law will be passed."

Without being quite as fervent as James Madison, Federalist Number 44,

1788:

"?ex post facto laws ? are contrary to the first principles of the social compact, and to every principle of sound legislation. ... sudden changes and legislative interferences ? become jobs [i.e., tools, or tactics?] in the hands of enterprising and influential speculators, and snares to the more-industrious and less-informed part of the community." 

it just seems to me that one should be able to make good faith financial decisions -- at least for the duration of a given year -- based on the tax laws relevant to those decisions _at the time they are made_.

Reply to
AES

Yeah, but that is, if I understood the semi-byzantine law, deals with 2008's taxes. It is just that 2007 taxes had to be filed to get it. There were no changes in a past year's law.

Reply to
Kurt Ullman

How soon we forget Bush's March 2002 tax law known as the Job Creation and Worker Assistance Act of 2002 that changed some 2001 tax laws in response to 9/11. Or Clinton's 1993 tax law that retroactively changed the law for dead people.

There are often technical corrections that are passed years after the original error was made. For example in the JCWAA of 2002 (see above) there was a correction that was retroactive to tax years beginning after 12/31/1983. Yes

1983. The correction was to the advanced payment of EITC.

-- Drew Edmundson, CPA Cary, NC

Reply to
Drew Edmundson

The restriction against "ex post facto law" has generally been held to apply only to criminal laws. Such laws change the status of facts and relationships or the consequences of acts retroactively.

Otherwise courts uphold retroactive laws all the time. One of my favorite cases is one in which the California Supreme Court held a statute was retroactive.

The statute in question stated that any contract clause entitling one party to attorneys fees in case of dispute would apply to all parties to the contract. It also said, "The provisions of this statute cannot be waived in any contract entered into after the effective date hereof."

The court said that the statute clearly meant that the effect of the statute could be waived in contracts entered into before the effective date of the statute. But no such waiver would have been necessary if the statute weren't retroactive. So the legislature must have meant it to be retroactive.

Stu

Reply to
Stuart Bronstein

In 2001 the rebate law was RETROACTIVE, passed later in the year to take effect for the whole year. Fortuneately it is was a lowering of a low-end bracket and didnt cost additional tax.

Reply to
rick++

When you are buying a house, you don't know how much property tax you will have to pay in 5 years time.

Reply to
s_pickle2001

If Congress makes a change after you file your tax return, are you required to file an amended return if it affects you? I'm guessing it would only be required if it increases your tax.

Reply to
Barry Margolin

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