Congress tells IRS it can count on AMT relief before end of year

Congress tells IRS it can count on AMT relief before end of year

	Published : Wed, 31 Oct 2007 15:46 By : Agencies Print this Story

WASHINGTON (Thomson Financial) - Key leaders of Congress told the Internal Revenue Service (IRS) yesterday that it can count on Congress to approve legislation this year under which no new taxpayer would be subject to the alternative minimum tax (AMT) when filing their 2007 taxes.

In an Oct 30 letter, the chairmen of the Senate Finance and House Ways and Means Committees said they plan on extending the so-called AMT patch this year, and that the IRS should take this into account as it prepares 2007 tax forms.

'To accomplish this, we are committed to extending and indexing the 2006 AMT patch with the goal of ensuring that not one additional taxpayer faces higher taxes in 2007 due to the onerous AMT,' the letter said.

'We plan to do everything possible to enact AMT relief legislation in a form mutually agreeable to the Congress and the President before the end of the year,' it added. 'We urge the Internal Revenue Service to take all steps necessary to plan for changes that would be made by the legislation.'

US Treasury Secretary Henry Paulson has warned Congress that failure to act soon on the AMT would cause problems for the IRS, which has to begin planning tax forms soon. The AMT was originally designed to ensure a very small number of wealthy families and individuals pay some minimum tax, but is threatening to reach millions of middle-class families as incomes grow.

The congressional letter agreed that without extending the AMT patch, more that 23 mln new taxpayers would be subject to higher taxes under current law.

The letter also said Congress would raise the AMT exemption levels below which taxpayers are not threatened by higher taxes. It said that level would be 44,350 usd for individual taxpayers, and 66,250 usd for married taxpayers.

A House aide said today that the House Ways and Means Committee is expected to approve the AMT patch tomorrow, after which the entire House would have to approve it. A Senate aide said the Senate Finance Committee is hoping to approve the bill soon, but said no specific time had been set yet.

pete.kasperowicz@thomson.com

pik/wash/jrr

The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.