AMT Patch May Delay Filing for Some Taxpayers

WASHINGTON — The Internal Revenue Service announced today that the
upcoming tax season is expected to start on time for everyone except
certain taxpayers potentially affected by late enactment of the
Alternative Minimum Tax “patch.”

Following extensive work in recent weeks, the IRS expects to be able to
begin processing returns for the vast majority of taxpayers in
mid-January. However, as many as 13.5 million taxpayers using five
forms related to the Alternative Minimum Tax (AMT) legislation will
have to wait to file tax returns until the IRS completes the
reprogramming of its systems for the new law.

The IRS has targeted Feb. 11, as the potential starting date for
taxpayers to begin submitting the five AMT-related returns affected by
the legislation. The February date allows the IRS enough time to update
and test its systems to accommodate the AMT changes without major
disruptions to other operations related to the tax season. As the IRS
has said previously, it will take approximately seven weeks after the
AMT patch was approved to update IRS processing systems completely.

Although as many as 13.5 million taxpayers will not be able to file
their returns until Feb. 11, the effect of the delay may be lessened by
the fact that under previous filing patterns only between 3 million to
4 million taxpayers file returns with the five affected forms during
these early weeks in the filing season.

“We regret the inconvenience the delay will mean for millions of early
tax filers, especially those expecting a refund,” said Linda Stiff,
Acting IRS Commissioner. “We’ve taken extraordinary steps to figure out
a way that we can start the filing season on time for most taxpayers,
including some using AMT-related forms.  Our goal has always been to
make sure we can accurately process tax returns while getting refunds
to taxpayers as quickly as possible.”

The February delay caused by the AMT patch will affect taxpayers using any of these five forms:

• Form 8863, Education Credits.
• Form 5695, Residential Energy Credits.
• Form 1040A’s Schedule 2, Child and Dependent Care Expenses for Form 1040A Filers.
• Form 8396, Mortgage Interest Credit.
• Form 8859, District of Columbia First-Time Homebuyer Credit.

While these five forms require significant additional reprogramming
due to the AMT patch, the IRS has been able to reprogram its systems to
begin processing seven other AMT-related forms, including Form 6251,
Alternative Minimum Tax – Individuals.  Taxpayers filing these seven
forms should not experience delays in filing, and the IRS expects to
begin processing those returns starting on Jan. 14.

Electronic returns involving those five forms will not be accepted
until systems are updated in February; similarly, paper filers should
wait to file as well. All other e-file and paper returns will be
accepted starting in January. The IRS urges affected taxpayers to file
electronically in order to reduce wait times for their refunds. E-file
with direct deposit gets refunds in as little as 10 days, while paper
returns take four to six weeks.

“E-file is a great option for everyone, especially if they are affected
by the AMT,” said Richard Spires, IRS Deputy Commissioner for
Operations Support.  “Filing electronically will get people their
refunds faster, and e-file greatly reduces the chances for making an
error on the AMT or other tax issues.”

In addition to filing electronically, the IRS urges taxpayers to take simple steps to avoid problems:

• Taxpayers filing electronically should make sure to update their tax software in order to get the latest AMT updates.
• Taxpayers with $54,000 or less in Adjusted Gross Income can use
  Free File to electronically file their returns for free.  Free File
  will only be available by visiting the official IRS web site at
  IRS.gov. In all, 90 million taxpayers qualify for this free service.
• Taxpayers who use tax software to print out paper copies of tax
  forms should make sure they update their software before printing out
  forms.  Taxpayers using paper forms can also visit IRS.gov to get
  updated copies of AMT forms.

The IRS has created a special section on IRS.gov to provide
taxpayers with additional information and copies of updated forms
affected by the AMT.  In recent days, the IRS has posted updated copies
of all forms affected by the late enactment of the AMT patch by
Congress.

The IRS also reminds taxpayers that printed tax packages, which will
begin arriving in the mail around New Year’s, went to the printer in
November before the AMT changes were enacted.  The packages reflect the
law in effect at the time of printing.  The tax packages include
cautionary language to taxpayers that late legislation was pending.

The IRS is also working closely with tax professionals and the tax
preparation software community to make sure they can help taxpayers
with all of the latest developments on the enactment of the AMT patch
and other tax changes.

“The IRS is going to continue to do everything it can to make this a
fully successful filing season for the nation’s taxpayers,” Stiff
said.  “We will continue to work to keep taxpayers up to date and make
this situation as easy as possible for everyone.”

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