Overview

From start to finish, 2010 was an important year for tax law changes. The year ended with an extension of the Bush- era tax cuts, an alternative minimum tax (AMT) patch, extenders relief and rein- statement of a modified estate tax. Even without such a dramatic closing, however, 2010 is notable for the tremendous impact of its other developments on a broad cross-section of taxpayers.

A series of tax stimulus measures, first in the Hiring Incentives to Restore Employment Act of 2010 (the HIRE Act, enacted March 18, 2010), then in the Small Business Jobs Act of 2010 (the 2010 Jobs Act, enacted September 27, 2010), and finally in the Tax Relief, Unemployment Insurance Re-authorization and Job Creation Act of 2010 (the 2010 Tax Relief Act, enacted December 17, 2010) provide substantial, but temporary, opportunities that, in many cases, must be acted upon quickly to maximize savings. To offset the cost of many of the tax breaks, Congress enacted “revenue raisers” with a special focus on tightening international tax rules, extending information reporting, adding anti- abuse provisions, and more. On the other hand, the $800 billion-plus of incentives in the 2010 Tax Relief Act was off-budget, exempt from the “pay-go” rules requiring offsetting tax increases.

Additionally, historic health care legislation, with its many tax components, is reason alone to single out 2010 as notable both for its initial impact and its reach into the future. This sweeping legislation impacts all taxpayers - individuals and employers - immediately and for years to come. Overlaid on 2010’s tax legislation is an equally significant output of guidance, procedures and initiatives from the IRS. The IRS used its powers to explain new laws, provide some relief to taxpayers experiencing economic hard times, strengthen heightened disclosure rules, and generally expand and refine its audit and collection tool kits. Court decisions pushed back on certain IRS positions, while reinforcing others.

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