Congress has not yet “patched” the alternative minimum tax, or AMT, for 2010. Without a new law, millions of taxpayers will encounter this tax for the first time — and those who pay AMT will pay much more than normal. Everyone expects Congress to act, but the IRS generally has to proceed on the basis of what the law says, not what it’s expected to say. That creates a problem because we’re so late in the year: forms, instructions and publications written based on current law will require costly and time-consuming revisions after we get the new law.
That’s why the leading members of the congressional tax committees from both parties sent a joint letter to the IRS Commissioner promising to do “everything possible” to enact AMT relief legislation. The law will allow personal credits to be used against AMT, and set the AMT exemption amount at levels somewhat higher than for 2009.
Unfortunately, we’ve seen this movie before. Even in the best of times it’s difficult to be certain that Congress won’t deadlock over the details of legislation both parties say they want to pass. It’s institutionally difficult for the IRS to accept such assurances, and they may feel compelled to respond that they’ll treat the law as changed when Congress changes it.
Meanwhile, however, the lawmakers’ letter sets forth something we’ve been wanting to know: the numbers for the AMT exemption amount for 2010, assuming the legislation passes. For those who want to use these numbers for planning purposes, they’re posted in our Reference Room.
