In response to a letter from several members of Congress, the Internal Revenue Service will stop trying to enforce collection of alternative minimum taxes due on incentive stock options for the rest of the month.
The suspension of AMT collection efforts will be in effect through the end of the fiscal year ending Sept. 30. The decision will give Congress a few more weeks to pass legislation to fix a problem with the AMT that forces taxpayers to pay heavy taxes on shares of stock they have held after exercising the incentive options, only to see the value of the stock plummet before they could sell it. The IRS has been collecting the AMT, along with interest and penalties, in some cases even garnishing wages. A bill known as the AMT Credit Fairness and Relief Act of 2007 is pending in Congress to fix the problem.
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