Domestic Taxes

IRS: No AMT patch would cause chaotic filing season

Miller sent the letter to the chairman and ranking member at both House Ways and Means – Reps. Dave Camp (R-Mich.) and Sandy Levin (D-Mich.), respectively – and Senate Finance – Sens. Max Baucus (D-Mont.) and Orrin Hatch (R-Utah).

{mosads}The IRS letter also underscores the real-world implications of the so-called fiscal cliff, which the White House and Congress are trying to confront this lame-duck session. 

Unless Washington acts, hundreds of billions of dollars in tax increases will happen at the end of the year, including the expiration of all Bush-era tax rates. Both sides have said they want to avoid the fiscal cliff, but have also laid markers on what could be protracted upcoming negotiations. 

President Obama, recently re-elected to a second term, has said that he will not allow the Bush-era rates for the highest earners to be extended again, after signing off on an extension two years ago. Congressional Republicans, meanwhile, have said they could be open to new revenues, but will not agree to a hike in tax rates.

The millions of taxpayers who would face the AMT if it wasn’t patched would pay an average of $3,700, according to the Tax Policy Center. The AMT disproportionately hits households in wealthier, high-tax states, like California, New Jersey and New York.

Both the Senate, led by Democrats, and the GOP House have passed bills that would patch the AMT this year. The Senate included a patch for 2012 in a bill that extended Bush-era rates only for family income up to $250,000, while the House measure that extended all rates included a two-year patch.

Tags Max Baucus Orrin Hatch

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