IRS Report Shows Increase In AMT Payments

by Mike Godfrey, Tax-News.com, Washington

27 November 2008

While the number of American taxpayers reporting alternative minimum tax (AMT) liability has fallen, Internal Revenue Service figures for 2006 have shown a substantial increase in the amount of alternative minimum tax reported.

The IRS's latest Statistics of Income Bulletin, which was released earlier this week and features information on over 138 million individual income tax returns filed for tax year 2006, revealed that the number of returns that reported an alternative minimum tax liability decreased by 1% between 2005 and 2006, the first decline since tax year 2001. But, for the fourth straight year, the amount of alternative minimum tax reported increased, by 23.8%, to USD21.6bn.

According to the statistics, total adjusted gross income less deficit (losses) reported for 2006 amounted to USD8.0 trillion, an 8.2% increase from the previous year, while taxable income increased 8.6% to USD5.6 trillion in 2006. Total income tax rose 9.5% to USD1 trillion in 2006.

Approximately 22.1 million individual income tax returns reported non-farm sole proprietorship activity in tax year 2006. Profits for these sole proprietorships decreased by an inflation-adjusted 0.4% between 2005 and 2006 after increasing 5.5% between 2004 and 2005.

The number of partnerships increased 6.6%, from more than 2.7 million in tax year 2005 to more than 2.9 million in tax year 2006. Total partnership net income (loss) increased by 22.1% between the two years, from USD546.2bn to USD666.7bn.

The report showed that non-loan transactions between large foreign-owned domestic corporations and related foreign parties reached USD1 trillion for the first time in 2004, an increase of more than 100% from 2002.

Nonprofit charitable organizations exempt from income tax filed more than 286,000 information returns for tax year 2005, an increase of 4% from tax year 2004. These organizations held more than USD2.2 trillion in assets, an increase of 9% from the previous tax year. Information returns for tax year 2005 were filed with the IRS in calendar years 2006 and 2007.

The report also showed that, in 2004, an estimated 2.7 million adults with gross assets of USD1.5m or more owned nearly USD11.1 trillion in assets. With a combined net worth of more than USD10.2 trillion (where net worth is defined as gross asset value less debts and mortgages), these top wealth holders made up only about 1.2 % of the total US adult population, although they held 20.3% of the total US net worth in 2004.

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