The IRS may delay the start of its filing season if AMT is not addressed.

[madfloridian]

And it appears to be a stand off. The Republicans in the Senate will not allow the Democrats to make up the lost revenue by taxes elsewhere, and the Dems insist on it. The GOP is dug in on no taxes being raised, we are seeing it in Florida as our infrastructure is being privatized.

Dawdling May Cost Taxpayers

The Internal Revenue Service is looking hard at delaying the start of its filing season, set to kick off on Jan. 14, if Congress fails to pass legislation in the next two weeks. At issue is how to handle what could be a dramatic increase in the number of people facing a higher alternative minimum tax.

If there is a delay and it extends into mid-February, it would slow nearly 38 million refunds worth a total of about $87 billion, the IRS Oversight Board predicts.

The board, an independent advisory group, said in a report to lawmakers last week that it is "gravely concerned about the serious risks" to the filing season if Congress does not make timely changes to the tax. They include more mistakes by both taxpayers and the IRS and more people failing to pay taxes because of uncertainty about what they owe.

The alternative minimum tax was passed in 1969 and was aimed at about 155 very wealthy families who used deductions to avoid paying any federal income tax. The AMT disallows certain deductions and credits. It was not adjusted for inflation; as a result, over the years it has hit a growing number of middle-income taxpayers.

More than 4 million were subject to it in the 2006 tax year, and that could soar to 25 million this year without congressional action.

More about why it is going to be so hard. The major reason appears to be the GOP wants the Democrats to take a hit on it.

Crowded Agenda Greets Returning Congress

Congress also must pass a temporary fix to the AMT to prevent 20 million taxpayers from getting hit with tax increases averaging $2,000. House Democrats insist on paying for the AMT fix with revenue increases elsewhere. Republicans have promised to block that approach in the Senate. The common wisdom holds that any AMT fix will ultimately add to the deficit.

Even if the AMT is fixed, Democrats are likely to take a political hit. Delays in addressing the minimum tax are keeping the IRS from preparing tax forms and computer programs for the upcoming filing season, which means million of taxpayers counting on early refunds will be getting them later.

Maybe that is why Harry Reid did not bring it to the floor before the November 16 deadline.

Reid not bringing AMT patch up before deadline

"The Internal Revenue Service set a Nov. 16 deadline to finalize forms and instructions for the 2008 tax-filing system. But Senate Majority Leader Harry Reid, D-Nev., said earlier this week that he won't move an AMT patch before Thanksgiving.

By missing the Friday deadline, lawmakers will mess up the timely issuance of tax refunds for millions of taxpayers. The IRS and Treasury Department estimate a patch not passed by early December could delay issuance of $75 billion in refunds to taxpayers who file 2007 tax returns before March 31, 2008. Additionally, 12 tax forms — one for the AMT and 11 others for various tax credits — would be affected by the delay.

Sounds like the Democrats are in a bind in the Senate. In my opinion, this is a situation that they could explain to the public via the media, give their side of it. That would often work in our favor, and the public is ready to listen now I think. Well, most of them anyway.

[1monster]

1. What is the income amount that automatically kicks one into the Aternative Minimum Tax

bind?

[madfloridian]

2. I remembered someone posted this in another thread..

I can't find the original CNN source to verify. Still looking because I heard it also.


http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=132&topic_id=3704297&mesg_id=3704387

"Last night CNN did a piece. A family of four making 66,000
dollars annually gets their tax burden almost doubled. Not
fully doubled but a hit which can ruin some.

Since both parties are wedded to the Ruling Class, it is going
to be interesting to see what happens.

If our party were the party of the people, they would have
taken photo's of the GOP turning purple and screaming as
the protected the Rich Taxpayers. A great commericail
America--here is living proof --The GOP Protects the Rich.
They were fighting the idea of any taxation changes on the
rich."

[madfloridian]

3. Found a Yahoo article....that is correct.

http://news.yahoo.com/s/nm/taxes_congress_amt_dc

"The U.S. Treasury Department says Congress' failure to act earlier on an AMT reprieve could delay refunds. Taxpayers have until April 15, 2008 to file 2007 returns, but many, especially those due a refund, file as early as January. The agency says it needs time to print forms and update computer programs.

The AMT was enacted in 1969 to ensure the very wealthy did not take advantage of so many breaks that they paid no taxes. But because of inflation and some past legal changes, the tax now looms over a growing number of middle income people.

If Congress fails to act, the tax could hit married couples without children earning as little as $75,000 a year. Because of the way the tax works, families with children are more likely to be captured by the tax at even lower income levels.

According to congressional researchers, a family with one child making just over $70,000 could end up paying the AMT, while a family with two children making just over $66,000 could end up paying.

The proposed relief would allow most families making less than $150,000 to escape the tax."

[Reno.Muse]

4. Jeezus, this AMT is old news. These bastards had 6 years to fix this!

But the rich got tax breaks instead. We are so fecked.

[madfloridian]

6. They have been just patching it....they may not get that through this year.

Can you say Blue Dogs? They will vote for the corporate agenda and the money agenda.

[IndianaGreen]

5. Guess who will get blamed if Pelosi and Reid fuck this up?

How many voters will get hit by AMT?