Bipartisan vow: We'll fix AMT

NEW YORK (CNNMoney.com) -- More than 20 million taxpayers are at risk of having to pay the so-called wealth tax when they file their 2010 taxes next year, if lawmakers fail to act. But that's not likely to happen.

On Tuesday, the Democratic chairmen of the House and Senate tax committees teamed with those committees' top Republican members to tell the IRS they are working on a bill to provide taxpayers with temporary relief from the Alternative Minimum Tax.

They advised the agency to "take all steps necessary" to adjust tax forms to reflect the anticipated changes.

"We will work to craft the AMT provision so that, in the aggregate, not one additional taxpayer faces higher taxes in 2010 due to the onerous AMT," the lawmakers wrote in a letter to IRS Commissioner Douglas Shulman.

Putting a temporary "patch" on the AMT to shield middle- and upper-middle-class taxpayers has become an annual event for Congress, although lawmakers have left this year's fix to the last minute.

The AMT was intended primarily for high-income taxpayers. But in recent years, it has threatened to engulf the less affluent because the income thresholds determining who must pay the tax were never adjusted for inflation.

While there is bipartisan disdain for the AMT, there is also bipartisan reluctance to get rid of it entirely because it raises a lot of revenue -- on paper, at least. If it's taken off the books all at once, lawmakers would be under pressure to find alternate sources of revenue to replace it or to cut spending to compensate.

That would be a much easier task if U.S. debt wasn't indefinitely projected to grow faster than the economy, barring other changes to the budget.

As it is, annual AMT patches cost roughly $70 billion a pop. The cost of the patch is typically added to the deficit every year.

The AMT patch is just one of a host of deadline-sensitive tax issues that the lame-duck Congress will face when it returns next weeks. But it is also the one tax issue that Hill watchers are most confident will be resolved before the year is out.