The introduction of lengthy tax packages is becoming an annual event in Washington, DC, and 1998 is no exception. This year, lawmakers passed the IRS Restructuring and Reform Act of 1998, which makes some long-overdue improvements in IRS policies and procedures and adds a host of other changes to an already bulging tax code.
The IRS-overhaul portion of the act stems from the work of a special congressional commission that studied the agency's need to restructure and from Senate Committee on Finance hearings held last fall that publicized numerous abuses taxpayers suffered under the strong arm of the IRS.
But there's more to the new law than IRS reforms. CCH Inc., a provider of legal, tax and business information in Riverwoods, Illinois, points out that the new statute contains 144 main act sections, more than 40 taxpayer-rights provisions, and more than 70 provisions that make what lawmakers call "technical corrections" to the existing tax code.
One change that's potentially lucrative for investors concerns the shortening of the capital gains holding period. Small businesses also benefit from a change dealing with the rollover treatment for gains on small-business stock. The new law also makes changes in the existing estate and gift tax law and alters some of the rules on Roth IRAs.
Joan Szabo is a writer in Great Falls, Virginia, who has reported on tax issues for more than 12 years.