Alternative Minimum Tax
Congressional Holdup on AMT Issue Will Not Delay Filing Season After All . . . DRAKE IS READY TO GO! 

In January the IRS gave taxpayers a bit of good news for a change.  Fears that tax season would be delayed by as many as seven weeks have been short-circuited by IRS programmers who have worked very hard implementing and testing the new Alternative Minimum Tax (AMT) patch into programs and systems.  This means both paper and e-filing can commence on January 11 for most taxpayers. 
Congress passed the AMT in1969 to prevent America’s wealthiest taxpayers from dodging their tax liability. But the original bill did not contain an adjustment for inflation, and each year more and more Americans have been swept into the AMT net. Without the “patch” enacted each year by Congress, the bill that originally targeted the extremely rich would target middle class Americans instead.
This year, Congress procrastinated passing the much-needed “fix” for AMT until late December. That delay sent the IRS scurrying to reprogram and test its systems, working longer hours and coming up with innovative ways to speed the transition.
Acting IRS Commissioner Linda Stiff stated that although the IRS regretted “the inconvenience the delay will mean for millions of early tax filers, especially those expecting a refund, we’ve taken extraordinary steps to figure out a way that we can start the filing season on time for most taxpayers, including some using AMT-related forms. Our goal has always been to make sure we can accurately process tax returns while getting refunds to taxpayers; as quickly as possible.”1 
Filing will begin on January 11 for most taxpayers; however, there are five forms that cannot be filed until February 11:
• Form 8863, Education Credits
• Form 5695, Residential Energy Credits
• Form 1040A’s Schedule 2, Child and Dependent Care Expenses for Form 1040A Filers
• Form 8396, Mortgage Interest Credit
• Form 8859, District of Columbia First-Time Homebuyer Credit
Although most taxpayers do not have to worry about the delays caused by the AMT patch, about 13.5 million taxpayers will be affected.  These include anyone who uses an AMT form listed above. If a client needs to file an affected form listed above, the IRS has asked that you not file that form until February 11, 2008.
The IRS can process other AMT forms, including Form 6251 – Alternative Minimum Tax – Individuals and any of the seven AMT-related forms not listed above, starting on January 14.  For more information on the AMT tax as well as the latest news from the IRS, visit their website at IRS.gov.

1 IR-2007-209, Dec. 27, 2007, Filing Season Opens on Time Except for Certain Taxpayers Potentially Affected by AMT Patch, http://www.irs.gov/newsroom, last visited on January 5, 2008.

From February 2008

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