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Outrage! Lack Of AMT Fix Could Delay Refunds!

From CNN’s Money.com:

Lack of AMT fix could delay 100 million tax returns

By Jeanne Sahadi | December 19, 2012

As many as 100 million taxpayers may be unable to file their returns until late March and would face refund delays if Congress fails to reach a fiscal cliff deal by Dec. 31 that includes an Alternative Minimum Tax fix.

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

Oh, no! Not "reprogramming!" By the way, how many people file their taxes before March?

By the way, how come we never hear how making the IRS enforce Obama-Care might delay tax refunds. Why is that?

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.

We’ve got news for you. Both Obama and Boehner’s plans will drop all income adjustments for inflation. Which will very quickly drive almost all earners into higher tax brackets. But it will also bring in a lot more revenue for the government.

Still, for some odd reason, the news media is not reporting that.

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.

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…

But it’s the possible delays in refunds that we are supposed to be upset about.

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.

Don’t bet on Congress patching the AMT. It’s a great way to bring in a lot more money. Money that can be used to buy votes. And that’s money that can be used to buy votes by giving people who don’t pay taxes more ‘free stuff.’

This article was posted by Steve on Thursday, December 20th, 2012. Comments are currently closed.

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