IRS chief warns of massive delay on tax returns

[Laura PourMeADrink]

http://www.politico.com/story/2012/12/irs-delay-tax-returns-85322.html?hp=l2

By STEVEN SLOAN | 12/19/12 4:18 PM EST
With fiscal cliff negotiations slowing to a near-halt, the IRS is warning that absent a deal, up to two-thirds of U.S. taxpayers will have to wait next year to file their returns.

In a letter to the top House and Senate tax writers from both parties, acting IRS Commissioner Steven Miller said that between 80 million and 100 million taxpayers won’t be able to file on time. That’s up from a November estimate, in which he told lawmakers that around 60 million taxpayers might have trouble filing.

The warning underscores the real-world chaos that would ensue if President Barack Obama and House Speaker John Boehner don’t reach a budget deal by Dec. 31.

The trouble all stems from uncertainty over how Congress might handle the alternative minimum tax. The parallel tax system has been in place for decades to ensure that even the richest Americans pay some level of tax. But it was never indexed for inflation, so Congress has to agree to a “patch” every few years.

The last patch expired at the end of 2011. Unless Congress acts, the tax would suddenly hit 30 million additional taxpayers — many of whom aren’t aware of the potential hit — on their 2012 tax bills.



Read more: http://www.politico.com/story/2012/12/irs-delay-tax-returns-85322.html#ixzz2FYIlu5f2

[subterranean]

1. Why can't Congress do this separately from the "cliff" negotiations?

Is there some rule that adjustments to the AMT have to be done as part of a larger budget deal?