All year long, Congress has talked, debated, discussed and yes, even voted on legislation to fix the Alternative Minimum Tax (AMT) – but never on a proposal that put the American taxpayer first.
Each proposal was offset with some other tax increases, under the misguided notion that the revenue from the AMT was money that the government owned.
As a result, Congress waited until the week before Christmas to do what it should have done months ago: pass an AMT bill with no strings attached.
However, this is only a one-year fix, and it comes under the premise that the issue will be revisited next year, when once again, efforts will undoubtedly be made to raise taxes someplace else to compensate for the AMT funds.
Moreover, this late action has potentially complicated the tax refunds of as many as 50 million taxpayers. By creating uncertainties about what tax breaks will be available for the 2007 tax year, people can expect delayed refunds, and increased IRS paperwork.
In fact, the IRS warned of these difficulties in November in a sternly worded letter to the chairman and ranking member of the Senate Finance Committee.
According to the IRS, it will take seven weeks from the day the President signs the AMT patch into law to reprogram its computers and update tax forms.
Consequently, taxpayers can now expect:
- Delays in processing their tax returns.
- Up to $89 billion in refunds not issued on time.
- Prolonged wait times when attempting to contact the IRS as more taxpayers phone in their questions surrounding the confusion of the delayed AMT patch.
Conversely, I am pleased that the nearly 110,000 taxpayers in the 5th Congressional District who would have been affected by the AMT next year will have relief from this unfair tax.
In fact, because of Wisconsin’s high property and income taxes, which cannot be deducted under the AMT, the 5th Congressional District of Wisconsin was set to be the ninth-highest district out of 436 to be affected by the AMT next year.
What still frustrates me is that the need for an AMT solution was not a surprise. Congress had all year to prevent this increase, but as a result of its inaction, this mess is now left in the hands of the IRS bureaucrats.
Congressman F. James Sensenbrenner (R-Wis.) represents Wisconsin’s Fifth District and lives in Menomonee Falls.
