Amt 3996 Senate

[JON]

If I am reading it correctly the AMT fix was passed, but NO to the extenders. Does it go to conference committe now??? Dems blame Reps and Reps blame Dems.

[Larmil]

If I am reading it correctly the AMT fix was passed, but NO to the extenders. Does it go to conference committe now??? Dems blame Reps and Reps blame Dems.

I haven't seen the bill but the extenders were mentioned on the live C-Span at the time of the vote. I understand that it will go to the House next week (the House is on a long weekend the week following their two week vacation). The word is they will add PAYGO and send it back to the Senate.

[JohnH]

Is it any wonder

While this particular piece of legislation I would like to see passed, I am in general agreement with the observation that "No man's life, liberty, or property is safe while Congress is in session."

In a bipartisan manner (and I really mean that), I just want to say that it is no wonder that politicians of both parties are held in such low esteem. Their mantra seem to be "Separately we can do nothing, and together nothing can be done."

[New York Enrolled Agent]

Everyone knows the opposite of "pro" is "con".

So if progress means to go forward, then ....

[JON]

It goes to

the conference committe and some still have hope for changes.

[dsi]

Very well said NY EA.

[geekgirldany]

I received a email on Dec 8 from NATP about the problems that could happen if the AMT is not fixed. It is below. The way they talk it will be pretty bad if something isn't done soon. They even included a letter to send out to clients. Should I be letting my customer's know about this?
=============
As your trusted tax professional association, we at NATP take very seriously your need to know the latest tax information that could affect your business and your clients. As you may have heard, Congress is currently deliberating the proper way to patch the Alternative Minimum Tax (AMT) and extend several tax credits for 2007. This situation will affect your clients with delayed filings and, for some, delayed refunds.

If the AMT patch is not enacted soon, 23 million unsuspecting middle-class taxpayers will be subject to unintended higher taxes. Another 25 million taxpayers will face higher taxes because several credits, such as the child tax credit, the child and dependent care credit, the foreign tax credit, and several others, will expire at the end of 2007. Many of the affected people may be clients of yours.

While we believe that a patch will occur, it's unknown when that will happen and how the fix will affect the taxpaying public. It will take the IRS up to ten weeks to program any changes in the law. That means if Congress does pass a change in the law, followed by the President signing it by December 21, the last day of the Congressional session for 2007, the IRS could possibly not be ready to accept individual returns until mid-February or early March 2008. The IRS will likely ask that paper returns not be submitted. Any paper returns filed will be shelved until the IRS has a processing system that functions with the law.

<I>Many early return filers will be very disappointed because refunds will not be processed in a timely way. Other taxpayers will be frustrated because they will be unable to file their returns until the IRS is ready. You may experience some difficulties with your clients as a result. Your business will also be compacted into a short, but intense, filing season. It will be reminiscent of the 2006 filing season.

Our advice to you - plan ahead and adjust your operations accordingly. Your software vendor will likely have an update with accurately functioning software before the IRS has its system ready, so you will have the some chance to spread the workload over time. Remember that every tax professional and taxpayer will be subject to these circumstances.

We understand that this news may come as a disappointment to your clients, so we have created a letter for you to edit as you wish and share with clients to keep them informed and, hopefully, ease their frustrations. Click here to be linked to this letter. If you send newsletters to your clients, this may be something you would like to include.</I>

[JohnH]

Hard working Congress

Let's not be too hard on those hard-working Congress men & women. There's only so much work a human can squeeze into a day. After working about 6 hours on Friday and only getting two days off over the weekend, they're already planning to be back in session as early as 3:00 pm today and 10:30 tomorrow.

What dedication to doing the "people's business" and looking out for us! WHat more could we ask of them?

[skhyatt]

Let's not be too hard on those hard-working Congress men & women. There's only so much work a human can squeeze into a day. After working about 6 hours on Friday and only getting two days off over the weekend, they're already planning to be back in session as early as 3:00 pm today and 10:30 tomorrow.

What dedication to doing the "people's business" and looking out for us! WHat more could we ask of them?

They are my heroes.....

[bertrans]

Amt

Agreed as to our silly servants.

Does anyone happen to know the precise reason(s) why the AMT exemption amounts were not originally (or in the Reagan revision) indexed to inflation? Is there some 'deep' reason there?

[ecb34691]

Probably for the same reasons the taxable portion of social security has never been indexed! Stupid!

[Bees Knees]

There are a number of rules that are not indexed for inflation.

For example, the reason charitable miles has remaind at 14¢ for all eternity is because it is written in the code at 14¢ with no adjustment for inflation.

It could simply be a case where they forgot to include an inflation provision at the time they had their staff write up the new law.

[dsi]

My bet says Congress is procrastinating on the AMT patch for a few reasons, one being the treasury doesn't want to pay out any tax refunds in early January as in the past. They want to hold on the $$$ for as long as possible. Other reasons...politics as usual.

[JohnH]

Agree on the &quot;politics as usual&quot;

David:
I agree with you on the "politics as usual", but can't agree on the idea that this is actually an intentional ploy to hold onto the $ a little longer. That would imply that there is some sort of planning taking place. Whatever else they may do in Washington, I certainly don't give them credit for any sort of financial planning strategy.

[bertrans]

Amt

There are a number of rules that are not indexed for inflation.

For example, the reason charitable miles has remaind at 14¢ for all eternity is because it is written in the code at 14¢ with no adjustment for inflation.

It could simply be a case where they forgot to include an inflation provision at the time they had their staff write up the new law.

I understand your argument, but please bear with me.I realise that I may be on a fool's errand, but I am trying to look for some mote of rationality.

OK: maybe they did forget to adjust for inflation when the code sections were initially enacted regarding AMT....but it's been an awfully long time since then. Why no corrective action? Could congress have gotten 'addicted' to the increased revenues? AMT is, after all, a cash-cow: why plug up the udders? I don't know.