H&R Block Digits - Central Perk 2008

How can we bring low-wealth Americans into the mainstream economy?

Silver Rights

You bring everyone up by moving money into the marketplace. More take-home, more to spend. When we pay more taxes, everyone loses.

AMT Hot Potato

Last week the Senate lobbed back to the House a revised version the AMT bill that includes a one year AMT patch, with a slight increase in the AMT exemption amounts and allowance of the nonrefundable personal credits against AMT. Only five Senators (all Democrats) voted against the bill. Now, it’s up the House to decide what to do. The House could give in to pressure from the Senate and pass the revised version of the bill, which Bush has indicated he will sign. Given that it’s so close to the end of the year, that is certainly the path of least resistance. Even if this is the case, the House isn’t expected to take up the bill until Wednesday (12/12), so it still could be the end of the week (or later) before the bill is signed into law by the President. Note, however, that it’s still possible that the House will insist on including some form of revenue offset. If it does, it means that this political hot potato of a bill would be dropped back into the Senate’s hands. Even if the Senate hears the tick, tick, tick of the start of tax season and decides to lob this version to President Bush, there is no guarantee that the President will be willing to play. Instead, the Pres could just pop the bill into his pocket (pocket veto) and let Congress try again in early January. Taxpayers, tax professionals, and the IRS are on pins and needles to see how this game of hot potato turns out. Congress needs to remember that no matter which side wins, it’s the taxpayers who stand to lose the most as they face refund and filing delays.

Hurry Up and Wait

It looks like we’ll have to wait at least another day to find out which way the House will tip its hat on the AMT bill. It’s under pressure from both the Senate and the White House to pass the latest version of the AMT bill that was passed by the Senate last week. The House is still hoping to find some mutually-agreeable offsets. The IRS is under pressure, too, as it understands how important its quick action will be in ameliorating the effects of the Congressional tug of war. It is considering how best to handle early-filed returns to avoid delaying billions of dollars of refunds. The IRS has revised forms ready on the assurance that a patch will be passed, but it says that paper returns won’t be processed if electronic returns can’t be processed. It looks like the patch will consist of a one year fix with slightly increased AMT exemptions and nonrefundable personal credits being allowed against AMT. Just when that patch will get signed into law is anyone’s guess at this point. Let’s hope Congress doesn’t keep us waiting much longer.

Hurry Up and Wait

First, I think this is fascinating watching a bill progress its way into law. Reminds me of that program I watched as a kid "I'm just a bill on Capitol Hill"... But, as a taxpayer, I'm completely frustrated. I normally file my taxes in January so I can get my refund early and pay for Christmas bills (read my credit card). Now I'm not sure when I'm going to get my refund and will be paying interest charges until this gets figured out. I really don't understand how this could be going on at this point in time. Extending the tax deadline doesn't help someone like me who counts on their refund.