Make us your home page

Today’s top headlines delivered to you daily.

(View our Privacy Policy)

AMT holdup could stop half of U.S. taxpayers from filing taxes, getting refunds

Dana Pinero of New York waits to mail tax returns on April 15, 2008. Tax filing and refunds could be delayed in 2013 if Congress doesn’t act to restrain the alternative minimum tax.

Associated Press (2008)

Dana Pinero of New York waits to mail tax returns on April 15, 2008. Tax filing and refunds could be delayed in 2013 if Congress doesn’t act to restrain the alternative minimum tax.

Nearly half of U.S. taxpayers would be unable to file their 2012 taxes — or receive their refunds — until at least late March if Congress fails to enact legislation by the end of this year to restrain the alternative minimum tax, the head of the Internal Revenue Service said Tuesday.

In a letter to Sen. Orrin Hatch, R-Utah, Acting IRS Commissioner Steven T. Miller said the agency made "a risk-based decision" not to reprogram its computer systems to account for the expiration of legislation that limits the reach of the AMT to about 4 million households each year.

Since that legislation expired in December, the AMT is in line to hit about 33 million people in the 2012 tax year, the letter said — hitting about 28 million of those families with an unexpectedly large tax bill.

If Congress passes new legislation before the end of the year, Miller wrote, everything would be fine: "The IRS would likely be able to open the 2013 tax filing season with minimal delays for most taxpayers."

"However, if there is no AMT patch enacted by the end of the year," Miller wrote, "there would be serious repercussions for taxpayers."

"Without an AMT patch, about 28 million taxpayers would be faced with a very large, unexpected tax liability for the current tax year (2012). In addition, in order to allow time for the IRS to make the programming changes necessary to conform our processing systems to reflect expiration of the AMT patch and the credit ordering rules, the IRS would, at minimum, need to instruct more than 60 million taxpayers that they may not file their tax returns or receive a refund until the IRS completes the necessary systems changes," Miller wrote.

"Because of the magnitude and complexity of the changes, it is entirely possible that these taxpayers would not be able to file until late March 2013, if not even later. Tens of millions of these taxpayers would unexpectedly have to pay additional income tax for 2012, leaving them with a balance due return or a much smaller refund than expected."

Hatch is the senior Republican on the Senate Finance Committee. Miller wrote the letter in response to requests from Congress about the impact on the agency of the year-end fiscal cliff, which threatens to dramatically change existing tax policy on several fronts, including the AMT.

In the past, Congress has repeatedly provided the agency with "bipartisan, bicameral assurances that Congress was working expeditiously to enact a patch." This year, however, political wrangling over taxes, primarily the expiration of the George W. Bush-era tax cuts, has prevented negotiations over legislation to limit the AMT.

If the AMT is not patched, those hit with the tax could see an average increase of $3,700 in their 2012 tax bills, according to estimates by the nonpartisan Tax Policy Center.

AMT holdup could stop half of U.S. taxpayers from filing taxes, getting refunds 11/13/12 [Last modified: Tuesday, November 13, 2012 10:05pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. Review: Arcade Fire open hearts, play with passion at the USF Sun Dome in Tampa


    Gloves off, hearts open and disco balls glittering, Arcade Fire scaled the stage for the first time ever in Tampa, pouncing and flailing and performing with all the passion that’s made them one of the world’s most celebrated rock bands this century.

    Arcade Fire performed at the USF Sun Dome in Tampa on Sept. 22, 2017.
  2. Lightning's Steven Stamkos looks close to top form in first game since November

    Lightning Strikes

    TAMPA — The wait felt like forever for Lightning captain Steven Stamkos, having gone 10 months without playing in a game.

    A scramble in front of the Lightning goal has Matthew Peca, far left, and Erik Cernak, middle, helping out goalie Andrei Vasilevskiy during the third period of a 3-1 win against the Predators. Vasilevskiy, who made 29 saves, was “exceptional,” coach Jon Cooper says.
  3. Rays journal: Alex Cobb may have pitched last game in Rays uniform (w/video)

    The Heater

    BALTIMORE — RHP Alex Cobb pitched well enough to lead the Rays to an 8-3 win over the Orioles on Friday.

    Wilson Ramos gives thanks after hitting a grand slam during the second inning, putting the Rays up 4-0.
  4. Steven Souza Jr. vindicating big trade for Rays

    The Heater

    BALTIMORE — There was a time when the three-team, 11-player transaction the Rays orchestrated to get Steven Souza Jr. from the Nationals looked liked a bad deal.

    The Rays’ Steven Souza Jr. has 30 home runs this season while improving his defense and baserunning but wants to improve on his .236 batting average.
  5. Fennelly: Lightning's Manon Rheaume made history 25 years ago Saturday

    Lightning Strikes

    The name is part of Lightning history, hockey history, sports history.

    Lightning goalie Manon Rheaume became the first woman to play in an NHL game 25 years ago today.