Bush signs AMT fix; refunds may be late

WASHINGTON — President Bush signed a temporary fix to the alternative minimum tax into law Wednesday, but the Internal Revenue Service will still need time to reprogram its computer systems for the change.

Congress passed the one-year fix for the tax, known as the AMT, just before adjourning for the year. The move saved about 128,000 Utahns from potentially paying a higher income tax for 2007. The timing of the measure's passage, though, left little opportunity for the IRS to update its system before tax season gets under way, so tax refunds may come later than expected.

After the bill passed, the IRS announced last week that it would begin the final reprogramming steps for the income-tax processing system and would "aggressively explore options for the 2008 filing season in order to minimize the impact of processing delays on taxpayers." The agency would make revised copies of the 12 tax forms affected by the AMT law available within 72 hours of the bill being signed into law.

"Our people will do everything they can to quickly update our systems for this major change and make this filing season as smooth as possible for everyone," IRS Acting Commissioner Linda Stiff said in a statement. "Our goal is to process tax returns accurately and to issue refunds to taxpayers as quickly as possible."

TurboTax, a computer program that allows people to file their taxes online or through downloaded software, offered its users the opportunity to sign up for an AMT alert e-mail to monitor the legal change's progress, including delays.

Bob Meighan, vice president of TurboTax, said the company had been anticipating that Congress would approve a patch, so the computer program will be fairly easy to update.

"The bigger question is when will the IRS be ready to do it," Meighan said. TurboTax filed about 21 million returns for 2006, he said.

Some people have estimated that the IRS could take seven weeks to update its systems with the new information, so processing returns would take that much longer.

Treasury Secretary Henry M. Paulson Jr. said that the IRS is "doing all it can to have a fully successful filing season."

"However, it is likely that there will be some delays, including delays of some refunds," Paulson said in a statement. "The Treasury Department and the Internal Revenue Service will do everything possible to keep American taxpayers informed throughout the course of the upcoming filing season."