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To: Les H who wrote (9773)	1/26/2004 12:49:35 AM
From: stephen wall	Read Replies (1) \| Respond to of 29609

From the recently released National Taxpayer Advocate's annual report to Congress. Its a 500 page report but the No. 1(AMT) and No.2(nonfiling and underreporting by self-employed. 310B annual shortfall)most pressing agenda items are worth reading. Bills before Congress for AMT: irs.treas.gov MOST SERIOUS PROBLEM: ALTERNATIVE MINIMUM TAX FOR INDIVIDUALS DID YOU KNOW? The minimum tax was enacted into law in 1969 after Congress learned that 155 taxpayers with adjusted gross incomes (AGI) of $200,000 or more for the 1966 tax year had paid no federal income tax at all.1 The Joint Committee on Taxation projects that within the next decade, almost two million taxpayers with incomes as low as $30,000 will have to prepare the AMT schedule with their tax returns - if only to prove that they do not owe AMT.2 In tax year 2001, over 660,000 taxpayers with adjusted gross incomes under $200,000 paid more than $1.625 billion in AMT. The number of taxpayers with AGI of less than $50,000 owing AMT in 2001 is virtually the same as the number of taxpayers with AGI between $475,000 and $500,000 who owed no AMT.3 By 2008, it will cost less to repeal the regular income tax structure and keep the AMT ($74 billion) than to abolish the AMT ($85 billion).4 In 2005, it is projected that 65 percent of married couples with an adjusted growth income (AGI) between $75,000 and $100,000 with two or more children will be affected by the AMT - up from one percent in 2003.5 Overall, the AMT is projected to affect approximately 12.7 million taxpayers in 2005 - up from just over 2.4 million today.6 In 2010, the AMT is projected to affect nearly 32 million taxpayers.7 The majority will have incomes under $100,000, and more than 36 percent of taxpayers with incomes between $50,000 and $75,000 will owe AMT.8 Taxpayers must often fill out a 12-line worksheet, read eight pages of instructions, and complete a 65-line form — only to find they owe little or no AMT after all.9 Other taxpayers must complete the 65-line form, even though they are not subject to the AMT, to substantiate their entitlement to certain tax credits. Taxpayers subject to the AMT must calculate their tax liability twice, once under regular income tax rules and again under AMT rules. Taxpayers are projected to lose the benefit of nearly 12 billion dollars in tax credits (such as business credits) in 2010 because of AMT.10 irs.treas.gov