The Dead Cat Gets Passed Again: Congress Announces AMT “Patch”

Posted on 22. Dec, 2007 by in Taxes

The House Democrats yielded to Senate Republicans on Wednesday by approving a last-minute one-year “patch” that will save nearly 23 million American taxpayers from owing the alternative minimum tax (AMT) when they file their tax returns April 15.

Although the break is welcome, it is a little late – leaving taxpayers just a few days to adjust their finances. Congress also missed the IRS deadline for printing forms and instructions, and updating computer systems – meaning those who file early may be flagged incorrectly as owing the dreaded AMT. The IRS announced this week, however, that it will immediately begin the final reprogramming steps for its income-tax processing systems to prepare for the upcoming tax season. To help the tax professional and software communities prepare for the upcoming filing season, revised copies of the 12 tax forms impacted by the AMT legislation will be posted to IRS.gov within 72 hours after the AMT patch is signed into law.

I guess we have to be glad that Congress did something this year, even if it does end up costing taxpayers millions of dollars to implement. But I think Clint Stretch of Deloitte & Touche summed it up best when he said:

“This is the minimum amount of change you can make this year. They just keep passing the dead cat down to the next people who will have to deal with it. At some point the music will stop and somebody will be left holding it, but that’s probably not until 2009 or 2010.”

The AMT debate has been going on for years now. Everyone seems to think it’s a bad idea, especially the way it swallows up a larger and larger percentage of Americans, but nobody has the guts to make a change!

Let’s add “fixing the AMT” to the list of Congress’ New Year’s Resolutions.

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