In 2012, about 4m taxpayers will get stuck paying the AMT tax. As the WSJ headline suggests, that number could go to 33m in 2013. That’s a massive increase; it will cause all sorts of problems. From the IRS letter to Senator Hatch re the AMT:
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If there is no AMT patch enacted by the end of the year, the IRS would be forced to operate the 2013 tax filing season based on the expiration of the AMT patch. There would be serious repercussions for taxpayers.
The changes to the AMT exemption amount and the special tax credit ordering rules could affect more than 60 million taxpayers – nearly half of all individual income tax filers.
(Note: Even if you do not owe AMT, you have to fill out and file the AMT forms.)
About 28 million taxpayers would be faced with a very large,unexpected tax liability for the current tax year (2012).
(Note: The AMT patch actually expired in 2011; a one-year exemption was granted, but the exemption is not effective if not re-patched. This was a legislative “time bomb” that was included in the deal that created the fiscal-cliff (debt ceiling deal).
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Can someone tell me or explain who pays this and for what. I don't understand.
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