Earlier this week, in a letter to Senator Orrin Hatch (R-Utah), acting IRS Commissioner Steven Miller said that he had instructed his staff to leave the IRS's core systems "as-is" with respect to the alternative minimum tax and hold off on any substantial design and engineering work. The IRS made a risk-based decision to leave its systems programmed assuming that Congress would continue its historical practice and again enact extension of both the increased AMT exemption and tax credit ordering rules.
- If Congress enacts an AMT patch by the end of 2012, the IRS "would likely be able to open the 2013 tax filing season with minimal delays for most taxpayers."
- If an AMT patch is not enacted by year-end, there "would be serious repercussions for taxpayers." Roughly 28 million taxpayers would be faced with paying AMT. In addition, the IRS would have to instruct more than 60 million taxpayers that they cannot file their tax return or receive a refund until the IRS completes the necessary system changes. Due to "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."
Hatch released a general statement warning of "the largest tax increase in history" if the government goes off the fiscal cliff and that "28 million middle-class families and individuals will, for the first time, get hit with the alternative minimum tax and owe $92 billion in new taxes."
Will you be impacted by AMT in 2012? Contact our Tax Planning and Preparation Group at 440-449-6800.