When the alternative minimum tax was introduced in 1969, it affected only a handful of taxpayers with high income and big deductions. But by 2010, it will hit 87 percent of married couples with income between $75,000 and $100,000. That’s not what it was designed to do; the AMT was meant to force big earners with lots of deductions to pay their fair share. Now it “brings in a group of taxpayers the IRS has no problem with,” says Olson. “The AMT has run its course.” The problem is, the AMT hasn’t been updated to account for inflation. Instead, Congress has been adjusting exemption criteria on a yearly basis. “It’s just a Band-Aid,” says Hockenberry.
The Band-Aid in this year’s stimulus plan reduces the number of taxpayers subject to the AMT to 4.4 million—it would’ve been 30 million, according to the Tax Policy Center. But if you’re living in a high-tax state or married with two or more kids, you might find as you calculate both your regular return along with the AMT—form 6251, which taxpayers are responsible for—that you could be liable for the latter. Confused? The IRS offers AMT assistance at www.irs.gov; click on “Online Services.”
I just have a question… hopefully someone knows. I received one of these and marked the option 3 on the letter and sent back. Since I sent it in I have not recieved any additional letters or contact at all. So I have proof that they had mistaken the years… But I am not sure if no response is a good response or if I should get some form of notification. So now when i file my current taxes… i am worried that if there was something wrong then, i would not recieve the money they owed to me for 2009. Im concerned.. if anyone could help i would appreciate it.
Fallout kicks ass
Got one of these letters today, Dec. 2009. Claiming some adjustment to my 2007 returns. I was able to call the number listed and talk with one of the IRS people and after informing him that it was the IRS that missed my deduction…..he agreed (NOW I’m frighten). He stated that a letter or cancellation/form would be forward to be in 4 weeks……but this is where they get you…The letter that I got from them states that I must respond to this letter using the form send to me, by them by Jan. 2010, way less then the 4 week cancellation form I’m suppose to get from them..so I think, telephone conversation or not, I’m going to send their form back marked Option # 3 I DO NOT AGREE WITH ANY OF THE CHANGES, I enclosed documentation to support the entries on my original returns.
10 Things the IRS Won't Tell You: http://bit.ly/5DyXaq