WASHINGTON - The congressional struggle over how to protect millions of middle-class people from getting soaked by the alternative minimum tax this year entered its final stage yesterday as the Senate rejected a House demand that the $50 billion in tax relief be paid for.
The Senate voted 48 to 46 for the House-passed bill, well short of the 60 needed to advance the measure to shield 21 million from an average AMT bill of $2,000. The bill would have covered the cost of the lost revenue by closing a loophole on offshore tax havens.
With that vote, the House was scheduled to vote today on a Senate-passed measure that fixes the AMT for a year but provides no offsets to pay for it.
Republicans and the White House insist that, because the AMT was never meant to affect millions of people, there is no need to raise taxes to pay for legislation to keep it from growing.
The AMT fix was one of the last must-do pieces of legislation before Congress adjourns for the year.
The consequences of the congressional dispute could be felt by millions. The Internal Revenue Service has said that it will take seven weeks from the time the bill is signed into law to reprogram and test forms.
The IRS said yesterday it has yet to decide whether certain delays in processing returns and sending out refunds will affect just AMT taxpayers or all taxpayers.
