Tax Overhaul Leaves Little Time for Adapting to the Changes

Morningstar - The extensive rewrite of the U.S. tax code leaves little time for government agencies, businesses and individuals to adjust to its wide-ranging changes, many of which take effect in a matter of days.

The legislation, which Congress passed Wednesday, provides deep tax cuts for corporations and lower rates for many individuals. It also includes a significant overhaul of business taxation and international tax rules, and scales back key tax breaks.

"The implementation costs here are massive," said Bryan Camp, a law professor at Texas Tech's School of Law and former lawyer in the IRS chief counsel's office. "I don't think anyone probably has thought through all the different administrative ramifications of the bill."

Treasury officials have acknowledged the challenges in implementing the law, and have begun coordinating with the IRS and seeking feedback from trade groups on provisions requiring immediate action or guidance.

For example, the American Payroll Association, the largest payroll-industry trade group, warned lawmakers in a letter this month that its members were starting to panic over the prospect of changes to the W-4 form, which employers and employees use to determine how much tax to withhold from paychecks.

Millions of employees could need to file new W-4 forms, but it isn't clear when new ones will be ready.

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