Congress’s failure to renew the Bush-era tax cuts before going into recess is leading the IRS to contemplate unprecedented action to avoid a big withholding hit come January. For the first time, the IRS may base its tables on speculation regarding what action Congress will take:
Lack of congressional action on 2011 income taxes may force the Treasury Department to make unprecedented moves to prevent U.S. workers from seeing large tax increases in their January paychecks.
The issue: 2011 tax-withholding tables. Treasury officials usually release the tables, which determine the take-home pay of millions of wage-earners, by mid-November because it takes payroll processors weeks to adjust their systems before Jan. 1. . .
“Things get very dicey after the first of December” because of employers’ need to know the 2011 rates, said Michael Graetz of Columbia University Law School, a former Treasury official. . .
Some have suggested that if Congress doesn’t act in time, Treasury officials might consider a one- or two-month grace period in which it maintains current tables until Congress passes tax legislation. Capitol Hill tax staffers, meanwhile, say the Treasury could set 2011 withholding at current levels for joint filers earning less than $250,000 ($200,000 for single filers), on the assumption that Congress seems likely to enact this change.
The path the IRS is contemplating piles dishonesty upon dishonesty. The whole idea to withholding is to hide our taxation. If people had to cut a check to pay their confiscatory taxes, there would be a revolt. But, someone had the bright idea that if the public never saw that money in the first place, they wouldn’t really miss it.
Now the IRS is concerned that people will be upset when the withholding rates soar as a result of the Democrat’s refusal to renew the tax cuts. The public should be upset, and the IRS should not be covering for them.
Internet Scofflaw 
You must be logged in to post a comment.