so todays the day for 06......as a tribute to tax day I thought I would share this good news with any and all concerned ,, its a journal article I read yesterday....I missed getting AMTed by a whisker this year but , next year I am a dead duck….my accountant says he’s going to have a huge jar of Vaseline set up in his office next year for a lot of his clients.......


April 14, 2007; Page A8
It's almost tax day -- but cheer up, things could get worse, and probably will.

This year more than three million taxpayers will be hit by the Alternative Minimum Tax on their 2006 income. But next year that number could rise to 23 million unless Democrats in Congress come up with a way to halt the juggernaut that is the AMT. The fixes that have been put in place the past few years have expired, and if nothing is done nearly one in five filers will be caught short by a tax that was created in 1969 to target 21 -- yes, 21 -- millionaires who had managed to avoid paying any taxes at all.


Congress's Taxing Hurdle: The AMTWho are those 23 million? If you live in one of the high-tax states listed in the nearby chart, have a family with children, and make even $75,000 a year, you would probably be one of them.

The Democrats say they don't want this soak-the-rich tax to hit the middle class. But the AMT's relentless growth is largely of their making. Liberals created the AMT to punish those 21 millionaires but failed to index it for inflation. And Democrats raised the AMT tax rate in 1993 -- to 26% and 28% from a single rate of 24% as part of Bill Clinton's tax increase of 1993. According to the Joint Committee on Taxation, the AMT would have hit "only" 2.6 million Americans next year if not for that tax hike.

So nearly 90% of this problem was created the last time Democrats ran the government. And those who voted for it included Speaker Nancy Pelosi, Ways and Means Chairman Charlie Rangel, as well as Senators Barbara Boxer, Dianne Feinstein, Chuck Schumer (then in the House), Joe Lieberman and Chris Dodd.


To be fair, all but five Democratic Senators and 41 Democratic House Members voted for the bill. And of the five Senate dissenters, only New Jersey's Frank Lautenberg is still there. We single out the Democratic delegations from California, New York and Connecticut because they are the high-tax states likely to have the largest numbers of AMT victims if the tax isn't fixed or repealed. Taxpayers can deduct state and local taxes under the normal IRS code, but not under the AMT. So, in another liberal irony, Democratic Governors are now demanding that Congress pass AMT relief so they can keep their high state tax rates.

Now, Democrats like to blame the ever-encroaching AMT on the Bush tax cuts. The Orwellian logic of this argument is that the 2001 and 2003 tax cuts lowered the bill for almost everyone who pays taxes, but it didn't lower their bill as figured by the AMT (except temporarily). So by lowering taxpayers' "normal" taxes, President Bush is said to have made the AMT a bigger problem. However, you only pay the AMT because of the Bush tax cuts if those tax cuts lowered your bill in the first place -- you're still paying less than you would have.

Democrats have compounded their AMT dilemma this year by adopting "pay-as-you-go" budget rules that say any tax cut (such as AMT relief) must be offset either by other tax increases or entitlement spending cuts. Democrats aren't about to cut any spending, so now they're confronted with the problem of how to pay for AMT relief. Even a one- or two-year fix could "cost" tens of billions under Democratic revenue estimates, and full repeal would cost $1 trillion over a decade.

So what to do? Of course, raise taxes on "the rich"! Word around Washington is that Democrats may try to combine AMT relief with a measure to repeal some of the Bush tax cuts. But no one should be fooled by this class-war fakery. The AMT was itself supposed to be a soak-the-rich scheme. Like most such schemes, it's now hitting millions of the non-rich, with millions more on deck for a soaking. The same would go eventually for whatever new taxes Democrats claim would also only apply to the rich.

The easiest exit from this box canyon would be for Democrats to cut the AMT rate back to its pre-Clinton levels, and then cut some spending if they want to stick with their crazy "pay-go" rules. Better yet, they could start thinking about larger tax reform that would eliminate the AMT, lower rates for everyone, and close loopholes and needless deductions.


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and for those who have no idea what AMT is etc...

hers a primer..


Congress's Taxing Hurdle: The AMT
By NICK TIMIRAOS
April 14, 2007; Page A7

As many Americans race to finish their taxes, Congress returns from recess next week facing twin challenges: fixing the alternative minimum tax and raising money to pay for the fix.

The alternative minimum tax originally was created to prevent the wealthy from using heavy deductions to legally avoid paying income tax. But because it is not adjusted for inflation, the tax increasingly ensnares upper-middle-class taxpayers who never were intended to be its targets.


Repealing the tax is supported by members of Congress but is costly. The government could lose $1 trillion in revenue over the next decade if it were eliminated. That has Congress looking at a partial repeal and also at ways to ramp up tax collections by, among other things, trying to close the estimated $290 billion "tax gap" -- the difference between what taxpayers should have paid and what they actually pay.

While the alternative minimum tax means a significant boost in the tax bills of many Americans, proposals to close the tax gap -- by increasing resources for the tax collector -- could be costly for many, too.

Here's what's at stake:

What is the alternative minimum tax? The AMT is a separate system from the regular income tax, and it operates under many different rules. There are two rates -- 26% and 28%. Some popular deductions that many people claim under the regular system, such as state and local taxes, aren't allowed under the AMT. Because of the AMT, taxpayers at certain income levels have to figure out their taxes both ways and pay the higher amount.

How many people are affected? Four million taxpayers will pay the AMT in their 2006 taxes, but that could rise to 23 million for taxes filed next year. Those who pay the tax face an average increase in their tax bill of $6,800.

The problem has become more pronounced because President Bush's tax cuts lowered income-tax obligations for those who pay through the regular tax system without addressing the growing numbers that are subject to the alternative minimum tax.

Who is most likely to get hit by the AMT? The tax tends to hit those with annual incomes between $100,000 and $500,000 the most, but it could reach some who earn as little as $50,000 to $75,000 on next year's taxes.


White-collar professionals in high-tax states like California and in the Northeast tend to bear the brunt of the tax, because it doesn't give credits for state and local taxes. Taxpayers with large families or high medical expenses also are hit harder because it doesn't provide credits for dependents and has a higher threshold for deductions for medical expenses.

What will Congress do? In past years, Congress and the president have prevented the growing reach of the AMT with a series of one-year fixes. Congress passed such a fix for taxes filed this year, but hasn't passed one yet for next year's taxes.

Democrats have suggested that they want to permanently overhaul the tax, but because they have passed pay-as-you-go spending rules, the government would have to pay for the lost revenue by increasing taxes or cutting spending. Ultimately, Congress may defer action until after the 2008 election, when it also will consider the fate of the Bush tax cuts.

If Congress boosts the resources of the Internal Revenue Service, who will be affected? The difference between what taxpayers should have paid and what they actually paid on time was $345 billion in 2001. After enforcement efforts, it collected $55 billion, leaving a net gap of $290 billion. The IRS estimates the overall compliance rate at about 84%.

President Bush's budget for the 2008 fiscal year proposes a $410 million spending increase for compliance programs in order to bring in $29 billion in increased taxes over the next decade. Congress might increase that even more.

As a result, the number of families who are audited could rise. Right now, about 1% of all filings are audited. The odds of an audit are higher for those with higher incomes. Around 6% of individuals with an annual income exceeding $1 million were audited last year.

Small businesses and the self-employed are estimated to be the largest source of the tax gap, and therefore would likely bear the brunt of more aggressive enforcement efforts. One proposal would require banks to report to the IRS merchants' annual credit-card payments so that the IRS could compare the tax returns of small businesses with the payments to determine any underreporting of income. Small-business groups are fighting back by arguing that more intrusive regulation would add to their already high tax-preparation costs.

* * *
The AMT illustrates how a good-faith attempt to address an issue in the income tax system can have enormous unintended and undesirable consequences."

Eric Solomon, Assistant Secretary for Tax Policy, U.S. Treasury Department

"It is easy to look at a $290 billion tax gap and see a pot of gold. But for many taxpayers, efforts to close that gap could become a mountain of paperwork."

Scott Hodge, President, Tax Foundation

* * *
THE FACTS
Form 1040, the main tax-filing application, got its name because it was the 1,040th form issued by the Bureau of Internal Revenue, a predecessor to the IRS.

In 2000, each $100 collected by the IRS cost 39 cents to collect.

The first electronic transmission of a tax return to the IRS occurred in 1986. Last year, more than 73 million people filed their taxes electronically.

In a March survey by Harris Interactive, 58% of those polled said they believed their taxes are "too high," about 31% said they are "about right" and 2% said they are "too low."

Americans spent more than 6.4 billion hours on tax compliance in 2005.

In 2001, taxpayers paid, on average, a "surtax" of more than $2,000 each to subsidize noncompliance by others.

The 16th Amendment created the federal income tax in 1913. In its first year, it taxed incomes of more than $3,000 at 1% and incomes of more than $20,000 (about $400,000 adjusted for inflation) at rates from 2% to 7%.

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__________________
No individual can plan his own existence in their view.

So the state planners must arrogate to themselves the right to manipulate any sector of the economic system if the good of “society” or the “general welfare” is paramount.

Ipso- if the rights of the individual get in the way, the rights of the individual must be sublimated.

The Road to Serfdom
FA Hayek (interpretation)


Mortgage Backed Security survivor

Those of us who made enough money to pay taxes in 2006 , are aware that April 17th is tax day this year.

__________________
“ The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.”

Adam Smith , The Wealth of Nations 1776

"We have always known that heedless self-interest was bad morals; we know now that it is bad economics"
FDR's second Inaugural Address

For those of us who make quarterly tax deposits today is no different than any other day.

Technically, it is tomorrow, April 17th.

The article was about the future problems of Alternative Minimum Tax, or AMT. You do not exactly have to be rich to be subject to the tax Goober. Depending on what deductions and credits are taken on one's return, an individual with as little as $50k can be subject to the AMT. I don't think $50k can make someone be "rich" Goober.

No kiddin'. That's the first thing I thought of...

__________________
Obama's New "57 State Patriotic Pin":




Sayeth John Drake - 10/13/08: "OK, you're right, I admit to LYING"

I just love the end of tax season because I finally get to see my wife again.

__________________
When they come a wull staun ma groon
Staun ma groon al nae be afraid
Thoughts awe hame tak awa ma fear
Sweat an bluid hide ma veil awe tears

Those of us who have the intelligence to read our tax forms are aware that this year, for some weird-ass reason, it's April 16 for most of the country, and April 17th for some.

(Some = ME,MD,MA,NH,NY,VT, & DC)

__________________
Today's forecast: Government corruption.

Tomorrow's forecast: 100% chance of more 'politics as usual'

Maybe it's finally time to vote Libertarian

I've been out of it for some time, but aren't there 12 or so IRS districts and at that time they were all on different database systems.

You have been out. Its computer systems have been updated and universally accessible for the last 5 years. IRS has reduced the number of service centers from 10 to 5 for indivuiduals, centralized busienss return processing to two service centers, and certain other tax forms are sent to just one center, namely Cincinnati. The main reason has been technology improvements and upgrades, along with a majority of taxpayers filing electronically.

IR 2007-25 gave the filing date of April 17th for all taxpayers. This was done at the discretion of IRS commissioner Everson.

Today should be just another day, and it will be when we pass the Fair Tax. No more income filing, tax prep, stressing till the last minute, rushing to find stamps etc. You will pay your share of taxes whenever you buy something, and do not have to report what you bought, and how much tax you paid. Your entire paycheck will be yours to spend. No more FICA or witholding.

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http://www.fairtax.org

Elminate all taxes on income and replace with a national sales tax.

It's usually April 15, but in those states that celebrate the start of the Revolution, it's Patriots Day, which was once April 19, and is now the Monday of the week it occurs in. So we catch a break in Massachusetts and get an extra day if the 15th is on a Saturday or a Sunday or a Monday. And all the states that mail their returns to the Andover Mass Service Center catch that same break. But this year the whole country gets a break because the IRS discovered after the forms were printed that April 16 is Emancipation Day, a recently enacted District of Columbia holiday. Under an old Federal statute, District of Columbia holidays have national impact. So IRS offices will be open, it's not a national holiday, but it can't be a due date because of the DC Holiday.
Thanks to the storm that hit the Northeast this weekend, we get an extra two days if we were affected by the storm. Well, my garage got flooded, so I get til Thursday.

__________________
“ The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.”

Adam Smith , The Wealth of Nations 1776

"We have always known that heedless self-interest was bad morals; we know now that it is bad economics"
FDR's second Inaugural Address

OK, I apologize for the feeble attempt at humor.
I know all about AMT, and AMT horror stories.

Here's a true story, it took place a while ago, but it's the worst AMT horror story I've ever heard.
A woman who was a secretary at Digital Equipment Corporation was advised to take a second mortgage to exercise her DEC employee stock options, and hold the stock for a year, so that the huge profits would only be subject to long term capital gains and would not be counted as ordinary income.
Well, DEC stock shit the bed, it went from around $120 to like a dollar, her stock was worth less than she paid to redeem the options, pretty bad huh?
Come April, the IRS informs her that she owes $300,000 AMT on the option exercise, because while regular taxes on qualified Employee Stock Options are deferred, AMT is not.

This is a woman who was making maybe $30,000/ yr.
She had second mortgage she took out to redeem the options, a $300,000 AMT tax bill, and stock that worth a couple of thousand dollars.

__________________
“ The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.”

Adam Smith , The Wealth of Nations 1776

"We have always known that heedless self-interest was bad morals; we know now that it is bad economics"
FDR's second Inaugural Address

Good call, otherwise any penalties would be overtturned under the equal protection clause. (Well, Should be, but since the SCOTUS only views the Constitution as a set of guidelines, you can't be sure...)

Thanks for the explanation! (Tho I was still Partly right - it was 'for some weird-ass reason'!)

__________________
Today's forecast: Government corruption.

Tomorrow's forecast: 100% chance of more 'politics as usual'

Maybe it's finally time to vote Libertarian