* Alternative minimum tax on affluent tied up in fiscal
* Tax authorities boost estimate of those impacted
* Up to 100 million could face delays
WASHINGTON, Dec 19 U.S. tax authorities warned
on Wednesday that as many as 100 million taxpayers - far more
than previously estimated - could face refund delays if
lawmakers' "fiscal cliff" negotiations fail to fix the
alternative minimum tax (AMT) before year-end.
The Internal Revenue Service said in a letter to lawmakers
that it was raising its estimate on AMT impact from 60 million.
"It is becoming apparent that an even larger number of
taxpayers - 80 to 100 million of the 150 million total returns
expected to be filed - may be unable to file," IRS Acting
Commissioner Steven Miller wrote.
The AMT is a levy designed to ensure that high-income
taxpayers pay a minimum tax. Democrats and Republican typically
agree to adjust the tax for inflation to prevent unintended
taxpayers from being hit by it.
This year, however, its fate is tied to heated negotiations
- primarily between President Barack Obama and House Speaker
John Boehner - over future taxes and federal spending as they
try to avoid the automatic tax increases and spending cuts known
as the fiscal cliff.
The AMT fix for calculating 2012 income tax has broad
bipartisan support, but so far been drowned out by the larger
federal budget questions.
Without action soon to fix the AMT, there could be "lengthy
delays of tax refunds and unexpectedly higher taxes for many
taxpayers," Miller said.
The IRS needs congressional authority to update tax-filing
software and forms so that Americans can start their tax returns
next year. Inaction by Congress on the AMT has left IRS unsure
which taxpayers will need to pay the AMT tax.
An IRS spokesman declined to comment on the agency's AMT
preparations to date.
"Failure to act on the fiscal cliff will throw the 2013 tax
filing season into chaos," Representative Sander Levin, a
Michigan Democrat, said in a statement.
About 4 million taxpayers pay the AMT now because Congress
routinely "patches" it for inflation to keep it from reaching
down into middle-income tax brackets.
Without a patch for 2012, up to 33 million taxpayers will
have to pay the AMT, according to IRS.
Obama's most recent offer to Republicans included a
permanent AMT patch.
House Republicans plan to vote Thursday on a bill to address
the fiscal cliff that also includes an AMT patch.