Local News

Tax Refunds Might Not Come in Time for Christmas Bills

Posted December 24, 2007

— Tax refunds might not come quickly enough to help millions of Americans pay for their Christmas bills after Congress passed a one-year patch to the alternative minimum tax later than usual.

On Dec. 19, Congress voted to put a one-year freeze on growth of the AMT, shielding nearly 20 million middle- and upper-middle income taxpayers from first exposure to the tax. In 2006, the tax affected 4 million.

However, officials with the Internal Revenue Service said the agency will need at least 10 weeks to update its form and its computer system. By mid February, the government estimates that nearly 38 million returns – worth $87 billion – will be delayed.

Susanne Tote said she is among shoppers who stretch their credit limit in December while awaiting their refund.

"I file early so I can, obviously, get my return early, because I'd like to have my money as soon as possible," Tote said. "And it makes me angry that they do it this late in the season. They had all year. Why didn't they change it earlier so things could be on time?"

One-year fixes have become standard since the AMT was enacted in 1969 to catch a small number of very rich tax dodgers by imposing more stringent rules for deductions. However, the AMT was never adjusted for inflation, threatening to entrap many more people. Many beneficiaries of the AMT fix are people with incomes in the $75,000 to $200,000 range.

Certified public account Ben Micham could find a silver lining in the delay to passing an AMT patch in 2007: Complications in the tax code like those around the AMT drive more people to use tax preparers, he said.

"People are using tax preparers more and more because of the complexities," Micham said. "So that's gone up. Good for my job. Good for job security."

Even taxpayers with relatively simple returns might also be affected the delays, Micham warned. Accountants and technicians will have to adjust their software after the IRS finishes updating its system.

The length of the delays to refunds will depend on how quickly all those players in the tax system can adapt, Micham said.


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  • Nancy Dec 25, 2007

    "This is caused by petulant spoiled rich boy bush not directing the irs to be proactive. Thanks for the Christmas gift republican party!"

    And you obviously don't pay close attention to who held out until too late to pass the bill to postpone the mess - who heads the House? Who heads the Senate?

    Oh, drat, that would be democrats. Bush doesn't make the laws or write the bills, nor does he control the IRS, the IRS is at the beck and call of Congress.

  • fed up in 27613 Dec 25, 2007

    Heck, even a basic savings account would do them better!

    I guess you assume that all have bank accounts. I deal with clients who have employees that cash their check at the local grocery each payday and live paycheck to paycheck. I don't think many of these people would have the knowledge or opportunity to save the extra money collected each paycheck. Some might, but I would not suspect a large percentage.

  • cas-65 Dec 25, 2007

    I know a lot of people that basically plan to get a big refund every year. Never made any sense at all to me when you could adjust your deductibles and put that money into an account that would make you MORE than you would get back from your tax refund. Heck, even a basic savings account would do them better!

  • Evil one Dec 25, 2007

    I attended the Fair Tax Rally in Columbia, SC. It was fantastic, approx 8000 gathered and marched on the convention center while the Democratic Debates were about to begin.

  • tmedlin Dec 25, 2007

    I like the idea of the FairTax, too - but that takes away the Congress's way of Making deals on the hill, so it will NEVER pass.

  • Evil one Dec 25, 2007

    Pass the FAir Tax and make Apr 15 just another day.

  • wizard633 Dec 25, 2007

    Democrat controlled Congress in action for you. Better hope one don't become President this term. They are ALL about taking your money.

  • mvnull Dec 25, 2007

    "Actully it is just another way to milk your ou tof money that is yours...They do this to gain the interest and use it instead of paying it back to you."

    The government doesn't get any interest off they money they hold from taxes. It isn't like they can 'deposit' it in a bank.

  • floyd_lawson Dec 25, 2007

    "Maybe tonight you can start brushing teeth before you go to bed twice:once for the night and once for the next morning,instead of waiting and having to do the same in the morning,what you could have done last night."

    You sound experienced...If I say Merry Christmas I'm sure that will fuel more of your anger, so have one anyway!!!

  • DrunkSober Dec 25, 2007

    they just d*cked around long enough to try to let us no how dangerous they can be, i got the message!!
    What a bunch of crock Floyd.

    To use your example, why dont you brush your teeth every night instead of 'd#cking around'(your words) until morning yet you know that you will be brushing you teeth in the morning,anyway?

    IRS had to wait until the law was ACTUALLY passed,because it was not 100% guaranteed that the Charles Rangel law would be passed.

    Maybe tonight you can start brushing teeth before you go to bed twice:once for the night and once for the next morning,instead of waiting and having to do the same in the morning,what you could have done last night.