Lack of AMT fix could delay 100 million tax returns

Written By limadu on Kamis, 20 Desember 2012 | 12.08

Without an AMT "patch" in place by Dec. 31, up to 100 million taxpayers may not be able file their 2012 taxes until late March. And their refunds will be delayed, the IRS says.

NEW YORK (CNNMoney)

That's the latest estimate from the IRS, which would have to do some serious system reprogramming in the absence of an AMT provision.

Here's the problem: Income exemption levels under the "wealth tax" -- as the AMT is known -- were never adjusted for inflation since it was enacted decades ago. So Congress has regularly passed an AMT "patch" to correct for that by raising the exemption levels.

Except that lawmakers have so far failed to do so for 2012. And tax filing season begins in less than two weeks.

Without a patch, $45,000 for joint filers and $33,750 for single taxpayers is exempt from the AMT. But adjusted for inflation, those levels would jump to $78,750 and $50,600 in 2012, according to bills in the House and Senate.

CNN: Obama, Boehner remain at odds

No AMT fix would mean "lengthy delays of tax refunds and unexpectedly higher taxes for many taxpayers, who will be unaware that they are newly subject to AMT liability," IRS Acting Director Steven Miller said in a letter to House and Senate tax writers on Wednesday.

Without a patch, he estimates that close to 30 million additional taxpayers would have to pay the AMT.

And, he added, "[I]f Congress were to act at some point next year to enact a new AMT patch, the time and substantial expense necessary for the IRS to reprogram its systems to reflect expiration of the patch would ultimately be wasted."

The most aggravating thing about the situation: Both parties will agree to patch the AMT. The only question is when. At the moment, the patch is being held hostage to the fiscal cliff negotiations. To top of page

First Published: December 19, 2012: 5:34 PM ET


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