12/07/2007
NFIB is closely watching the ongoing efforts in Congress to pass alternative minimum tax relief. Up to 23 million taxpayers could be socked with the tax if Congress does not pass a 1-year patch by the end of the year.
Every day is critical, however, since the IRS needs the AMT situation resolved before it can finish setting its computer system for the 2008 filing season. This week, we sent a letter to Senate Finance Committee Chairman Max Baucus (Montana) and Ranking Member Charles Grassley (Iowa), urging them to take quick action on a proposed 1-year fix for the AMT. We asked them to consider that any further delays in enacting a patch could cause delays for many early filers in receiving their tax returns.
The House and the Senate have both now approved a version of AMT relief, but the House bill requires the tax relief to be offset with spending reductions or other revenue increases. NFIB is urging Congress to move past this stalemate, noting in our letter to the Senate that "While providing relief for many of our members by patching the AMT is vital, paying for it with a tax increase is counterproductive."
According to the IRS Oversight Board, delaying the tax filing season start to Jan. 28 would result in $17 billion in delayed refunds, and a delayed start date of Feb. 18 would result in $87 billion in delayed refunds. Small-business owners count on their refunds to put back into their business and help grow the U.S. economy, so a timely start of the filing season is critical.
The AMT was enacted 40 years ago as a way to prevent the country's wealthiest citizens from exploiting a loophole that allowed them to avoid paying their fair share in taxes, but the tax was never adjusted for inflation and now plagues many middle-class taxpayers and small-business owners. It is estimated that if the tax is not repealed, the number of taxpayers affected will increase from approximately 1.8 million in 2001 to more than 41 million in 2013.
