WASHINGTON, D.C. – Senate Small Business and Entrepreneurship Committee Ranking Member Olympia J. Snowe (R-Maine) today urged small businesses, which already face higher compliance burdens and costs than larger enterprises, to utilize updated tax forms and software in light of Congress’ late passage of alternative minimum tax (AMT) relief legislation (H.R. 3996). The Internal Revenue Service (IRS) has pledged to post revised tax forms to its website within 72 hours after the AMT patch is signed into law to assist the tax professional and software communities in preparing for the upcoming filing season.
“Unfortunately, Congress’ long overdue passage of the AMT relief bill will complicate the filing season, as the IRS must now revise forms to account for this legislation,” said Senator Snowe. “I urge small businesses and all taxpayers to ensure they are using updated forms and software as they go to prepare their taxes. I also ask that the IRS move as quickly as possible to ensure that the 2008 tax filing season is not unduly delayed and that taxpayers receive their refunds as expeditiously as possible.”
The AMT relief legislation that Congress cleared yesterday will, according to Treasury Department data, protect 21 million taxpayers from an average, unexpected tax increase of $2,000 for tax year 2007. Without enactment of this legislation, the AMT would have affected an estimated 85,000 Mainers, an increase of over 550 percent from the previous year. Enacted in 1969, the AMT was designed to ensure that a small group of high-income individuals would pay a minimum amount of tax. Under the AMT, individuals pay the greater of tax calculated under the AMT and under the traditional income tax system. Because AMT exemption amounts were never permanently indexed for inflation, the levy was expected to grow from 4 million taxpayers in 2006 to ensnaring 25 million taxpayers in 2007.