IRS warns lawmakers about retroactive tax changes

WASHINGTON (AP) - A bipartisan working group aimed at finding common ground on tax cuts is holding its first meeting today.

They're hoping to come up with a deal that would prevent sweeping tax increases from hitting taxpayers at every income level.

House leaders, meanwhile, are planning a vote tomorrow to extend middle-class tax cuts while letting taxes for the wealthy rise. The measure is seen as having no chance of passing in the Senate.

IRS Commissioner Doug Shulman is warning lawmakers that retroactively changing 2010 tax laws early next year "would be extremely detrimental to the entire tax filing season and to tens of millions of taxpayers."

Several big tax cuts have already expired for 2010, including a patch that spares more than 20 million taxpayers from being hit with the alternative minimum tax. Key lawmakers have told Shulman that they intend to pass a 2010 patch by the end of the year. Shulman says the IRS has programmed its computers anticipating Congress will patch the AMT.

Other expired tax breaks include tax breaks for educators, deductions for property taxes and state and local sales taxes.

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