Why won't Reid move an AMT patch before the Nov. 16 IRS deadline?

"The Internal Revenue Service set a Nov. 16 deadline to finalize forms and instructions for the 2008 tax-filing system. But Senate Majority Leader Harry Reid, D-Nev., said earlier this week that he won't move an AMT patch before Thanksgiving.

By missing the Friday deadline, lawmakers will mess up the timely issuance of tax refunds for millions of taxpayers. The IRS and Treasury Department estimate a patch not passed by early December could delay issuance of $75 billion in refunds to taxpayers who file 2007 tax returns before March 31, 2008. Additionally, 12 tax forms — one for the AMT and 11 others for various tax credits — would be affected by the delay.

"I think the folks that are using the term 'train wreck' are being very precise," a Senate Republican staffer close to the tax-writing process said. The staffer, who spoke on condition of anonymity, said the Senate is backed up with votes still to come on a controversial farm bill, several spending bills and a continuing resolution to fund government operations."

The alternative minimum tax (AMT), enacted in 1986 to make sure that a handful of millionaires paid at least some federal income tax, has come to affect tens of millions of taxpayers -- most not even close to being millionaires. But even though the AMT is taking a tax bite out of a burgeoning number of filers, the outcry most likely will continue to be addressed by temporary annual fixes, not the abolishment of the AMT, according to tax experts at the School of Accountancy in the W. P. Carey School of Business.

Charles Christian, Director of the School of Accountancy, says a temporary increase to the AMT exemption amount in 2006 kept upper-middle-income taxpayers from being gouged. Congress is expected to adjust the exemption again -- to some degree -- for the 2007 tax year. If they do not, an estimated 23 million taxpayers will be subject to the AMT this year.