IRS muddies the waters

The Internal Revenue Service is living up to its reputation as the agency everyone loves to hate.

No sooner had the federal tax overhaul been signed into law by President Trump — with its $10,000 cap on state and local tax deductions — than people started showing up at their local city and town halls, checks in hand.

For a few brief, shining moments local government — especially in high-tax states like ours — never had it so good. Money was simply streaming in the door, people were willing to wait patiently in line to cheerfully write checks. Everyone likes a bargain and being able to save a few bucks from the clutches of the federal government, well, what’s not to like?

This was supposed to be a middle-class tax cut, right? And homeowners in particular were doing what every tax accountant interviewed right after passage of the bill agreed was the smart thing to do — prepay local taxes to the extent you could this year.

So Thursday, even as taxpayers were lining up checks in hand, the IRS sought to “clarify” the new rule and in a statement only a bureaucrat (or lawyer) could love said:

“In general, whether a taxpayer is allowed a deduction for the prepayment of state or local real property taxes in 2017 depends on whether the taxpayer makes the payment in 2017 and the real property taxes are assessed prior to 2018. A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017.” Got that?

Well, it might explain the mantra of that nice lady at Boston City Hall telling everyone who came to the window, “You know you could always do this.” Well, at least for the next quarter or two.

After that, well, it’s anyone’s guess.