Tax relief is in sight over to 20 million Americans who faced a sudden tax hike because they would have qualified for the Alternative Minimum Tax when filing their 2007 tax return. Currently, four million Americans pay the AMT. That number would have soared to over 20 million taxpayers who would have qualified had tax relief not been addressed by Congress.

However, e-filing delays may now be a reality, according to Liberty Tax Service. President Bush is expected to sign the Temporary Tax Relief Act of 2007 that extends the current AMT thresholds with a temporary one year “patch.”

Because this legislation comes so late in the year, e-filing and paper processing of tax returns for everyone may not start until February. Some IRS instruction manuals are now outdated because the IRS publication deadline has passed. IRS computers must be reprogrammed, and twelve IRS forms are affected by the AMT including those for child and dependent care credits. The resulting delay could be up to seven weeks. The result: a possible postponement of tax refunds for 15 million taxpayers, including lower and middle class taxpayers who normally file for early refunds.

The irony of the AMT is that it was established by the Tax Reform Act of 1969 to close some loopholes for America’ s wealthiest individuals and ensure that they paid their share of federal income taxes. Because the AMT has never been indexed for inflation, more and more middle-class taxpayers have qualified to pay it every year, often losing deductions for state and local taxes, other deductions, and some tax benefits for having children.