As I am writing this column, it appears that the House-Senate conferees have reached agreement on a new tax bill. When enacted, it will impact every one of your clients. The major reported changes affecting individuals are an increase in the child care credit, marriage penalty relief, change in the tax rates, an increase in the AMT exemption, and my favorite, a tax reduction on both dividends and capital gains. For businesses, bonus first-year depreciation is increased and the maximum Section 179 annual expensing amount is raised. Yes, just like the last tax bill, there are changes that sunset after a number of years.

So, as with any tax legislation, accountants will be looking to see how such changes impact their clients. As a result, they will probably be sitting down with a number of them where they can identify significant tax planning opportunities. This will be especially true with regard to closely held business owners who have some control over the ability to generate dividends and capital gains for themselves.

You will also probably see some tax practitioners develop a few sophisticated, aggressive tax shelters. Believe me, they won't be aimed at the taxpayers whose income is primarily shown on their W-2s. Those individuals will continue to pay their fair share of taxes and more.

The final outgrowth that I see from this tax legislation are tax prosecutions when, in the IRS's opinion, a few of those tax shelters cross the line from tax avoidance to tax evasion. My concern is that a defendant might turn out to be a major accounting firm.

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