Taxable Talk

In the no surprise department, the House passed the AMT patch bill that did not contain any offsets. It now goes to President Bush who will likely sign it tomorrow or Friday.

The IRS previously said that it would take ten weeks for their computers to be reprogrammed with the new AMT exemption amounts ($66,250 for joint filers and $44,350 for single filers). Assuming that's the case, the IRS computers will be ready to process returns on February 29, 2008.

If your refund gets delayed, you will know who to blame: Congress—specifically the Democratic leaders in the House and the Senate. They waited to bring this measure up until late November knowing full well what the impact would be.

Finally, Joe Kristan ended his post on this with a wonderful thought: "As the patch only covers 2007, it kicks the problem into 2008 - an election year. More fun awaits." Thanks, Joe. It's the Holiday Season, a time for good cheer, not reasons for the rest of my hair turn to gray.

TaxProf Blog linkfest on the AMT patch passage
Roth Tax Update post

News reports state that the House will consider an AMT patch bill that has already passed the Senate. The Senate version of the AMT bill does not contain any tax offsets (or "paygo") provisions. Earlier, the House had passed an AMT patch that contained such offsets.

Last night the Senate again considered the House bill and it again failed (48 - 46, with 60 votes needed). All but one of the Republicans present voted against the bill while all Democrats present voted for the measure.

Thus, the House was left with no option but to consider the Senate version of the AMT patch, or the Democrats would end up being blamed for a tax increase on the middle class. Unfortunately, due to the lateness of the bill, the IRS forms that millions of taxpayers will receive will have incorrect information, and it's probable that the IRS will be unable to process individuals' tax returns until sometime in March.

When NBC's Saturday Night Live looks saner than California's legislature, there's a problem.

Today, California's legislature will look at a new health insurance program, estimated to cost $14 billion. Interestingly enough, California's budget deficit for this fiscal year is now estimated at $14 billion.