Typical government solution

[kcjenkins]

http://www.webcpa.com/news/IRS-Mulls-Limit...a:&st=email

A solution that would be easy for the government but totally unfair to many taxpayers. So they just may do it.

[Gail in Virginia]

IMO, limiting the losses should require passage of a new law by Congress. That is not to say they can't arrange for that, but it should take some time. I found the idea that they are going to use the information they have to identify more hobby losses more interesting. If they just automatically send letters requiring anyone who hasn't shown a profit in at least two of the last five years requiring them to prove they are not a hobby, they may increase revenue from this area. It would be interesting to see the results of such a program.

[kcjenkins]

The results? A lot of extra work [and fees] for us, as MANY, PROBABLY THE MAJORITY of new start-up businesses, no matter how legit, show a loss for the first couple of years.

[jainen]

>>limiting the losses should require passage of a new law by Congress<<

... or for a really radical approach they could just enforce the laws already on the books. Which, by the way, is all the G.A.O is saying in this article. I don't know what kc thinks would be totally unfair. The article plainly states that the G.A.O. is NOT recommending limiting losses, and the only unfair thing is the way the author cheats the reader with a misleading headline.

According to the article, the I.R.S. isn't going to change anything. The plan is simply to use existing data to work up some new statistics. That is indeed a typical government solution.