Washington, D.C. (April 9, 2002) - ReformAMT - an organization aimed at correcting the injustice created by the Alternative Minimum Tax (AMT) - in conjunction with Americans for Tax Reform (ATR), and the Financial Planning Association (FPA), today issued a warning to taxpayers about AMT and its damaging effects. According to the groups, AMT - an outdated tax code originally designed to ensure the ultra-wealthy pay their fair share - is now hitting hardest the middle class and those it was originally intended to protect. These groups warn that many taxpayers may not even know they owe this tax, which can cause financial devastation, until they file their tax returns. The U.S. Treasury estimates that nearly 2.7 million people will be affected this tax season with those numbers jumping to 35 million (nearly one third of American taxpayers) in 2010.
Taxpayers caught in the grips of AMT come from every walk of life and work in every major industry in the United States. In particular, because of the way the AMT works and as a result of the recent economic downturn, some AMT taxpayers who exercised stock options will owe up to 400 percent of their income on unrealized paper gains. These and other taxpayers such as those that live in high-tax states, own their own businesses, or have accrued significant medical bills, may be caught off guard owing significantly more taxes because of the AMT. ReformAMT, ATR and FPA advise taxpayers to seek professional tax advice to be sure they fully understand this tax, and how it may affect them. Taxpayers interested in learning about reform efforts may visit www.reformamt.org for more information. Additional resources are available at www.atr.org and www.fpanet.org.
"We are extremely disappointed by the number of taxpayers who will be affected by the Alternative Minimum Tax this year - a tax that has essentially become the Alternative Maximum Tax," according to Jay Cena, vice president, ReformAMT. "We therefore encourage all taxpayers to seek professional advice and join ReformAMT members who are working with Congress and other taxpayer groups to reform this egregious tax."
"Originally, AMT was put in as one of those envy pieces of legislation to ensure the rich are paying their fair share," said Grover Norquist, president of Americans for Tax Reform. "In fact, the way it's structured, it hits businesses that invest a lot, families with many children, people who live in high tax states or high tax cities, and those who have a lot of property taxes. It is imperative that taxpayers understand this onerous tax and how it affects their family budgets."
"Congress should act to provide long-term relief for all those who are adversely affected by the individual AMT and individuals should carefully review their financial plans to contemplate possible AMT liabilities," said Alfred Campos, counsel and assistant director of government relations for the Financial Planning Association.