Tax Controversy Services

Alternative Minimum Tax Issues

The alternative minimum tax prevents a taxpayer with substantial income from avoiding a significant tax liability. This equals the excess of the tentative minimum tax over the regular tax. Tax laws give preferential treatment to certain kinds of income and allow special deductions and credits for certain expenses. The alternative minimum tax attempts to ensure that all individuals who benefit from these tax advantages will pay at least a minimum amount of tax. The alternative minimum tax is a separate tax computation that reduces the benefit of certain deductions and credits, thus, creating a tax liability for an individual who would otherwise pay little or no tax. When the law was initially enacted, it was not indexed for inflation and it was intended to only affect taxpayers in the higher tax brackets. Since the law was not indexed for inflation, the number of taxpayers being negatively affected by this law is growing every year. The rules contain numerous caveats and our firm is skilled in devising methods that address AMT liability. We are also available to represent those who require resolution of IRS issues related to the AMT.