AMT gridlock to cause delayed refunds

Deputy Treasury Secretary Robert Kimmitt said today that there will be delays in sending out refunds for the 2007 tax year because Congress is too late in enacting legislation amending the alternative minimum tax. Mr. Kimmitt spoke on CNBC’s “Squawk Box” television program. “There will be delays for the 2007 tax year, delays in both processing and sending out refunds to the American taxpayer,” Mr. Kimmitt said. The House has passed legislation that would prevent about 19 million middle-income taxpayers from being subject to the AMT. The bill would raise taxes on private equity and hedge fund firms, which now pay taxes mostly at a 15% capital gains rate, to ordinary income rates as high as 35%. Republicans oppose the tax increase. “We are having a debate that is now affecting the administration of the tax code,” Mr. Kimmitt said. “The longer we go until the AMT “patch” is passed, the more effect there will be on the tax season,” he said. Also speaking on “Squawk Box,” Senate Finance Committee ranking minority member Charles Grassley, R-Iowa, said there appears to be enough support in the Senate to pass the AMT “patch” without raising taxes to pay for the lost revenue from the AMT. “It looks like we have the vote in the United States Senate,” Mr. Grassley said. Action will not be taken by Congress until early December at the earliest because Congress is adjourning for 17 days for the Thanksgiving holiday.