With the 2004 election fast approaching, Congress quickly passed two sets of tax law changes that will bring major changes and increased complexity to the Tax Code. The 450 changes to the Tax Code include 34 new code sections—making this one of the most significant set of tax provisions passed by Congress in years. The American Jobs Creation Act includes big changes for business beyond the provisions aimed at repealing the FSC/ETI provisions deemed illegal by the World Trade Organization. Manufacturers, farmers, oil companies and almost every other business in the U.S. will find benefits in this bill. It also includes some revenue raising provisions, particularly harsher treatment of tax shelter promoters. Also passed in recent weeks, the Working Families Tax Relief Act extended many tax cuts that are set to expire or that have already expired. That bill’s retroactive provisions could require some quick steps by tax planners, while both bills include many provisions that will require action in the next few months to use in the 2004 tax year.

 

As IRS Commissioner under Presidents Kennedy and Johnson, Mortimer M. Caplin saw what tremendous value good reform could do in an agency such as the IRS. Today he sees an agency that was crippled by the wave of well-meaning actions of Congress in 1998 under the guise of reform. He accuses administrations Republican and Democrat alike of using the Tax Code to hand out favors and make easy repayments of political debts. But the seeds of popular outrage may lie the Alternative Minimum Tax, he notes in a must-read exclusive interview with TAXES Magazine.

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IRAs are second only to checking and savings accounts in terms of ubiquity in American households. They are everywhere and are typically part of any good retirement or estate plan. But there are some areas to watch for in IRAs for estate plans, particularly beneficiary designations. Under the right circumstances, IRAs can subvert the wishes of the decedent by being outside the protection of the will and other estate plans. But it doesn’t have to be that way. Attorney Kristen M. Lynch has mapped out the minefield for financial and estate planners in an article from the Journal of Retirement Planning.

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