Thursday, December 02, 2010

Behind the scenes on the AMT

Tax Notes reports on a warning from IRS Commissioner Shulman that sheds some light on how the IRS is preparing to handle the 2010 AMT.
Taxwriters assured Shulman in a November 9 letter that there will be no such scramble this year. Congress would "do everything possible" to enact an AMT patch by the end of the year, with exemption amounts for 2010 at $47,450 for individuals and $72,450 for joint filers, lawmakers wrote.
Apparently, the IRS has gone ahead and reprogrammed their computers with these numbers. Now it's beginning to look like Congress would rather argue than legislate.  If nothing is done, Republicans will pass new tax legislation with retroactive dates when they take over in January. Sounds easy, but it isn't. IRS will have to proceed on what the law is, not what it was promised to be.  They will have to reprogram for the unpatched AMT.
"It would be an unprecedented and daunting operational challenge to open the tax filing season under one set of tax laws with respect to AMT and extenders, begin accepting tax returns, and then have the law change," Shulman wrote to Democratic and Republican taxwriters in the House and Senate.
At a minimum, refunds will be delayed as the computers are reprogrammed for a third time for the 2010 AMT.

No comments: