Unprecedented east Jerusalem building in pipeline

Israel is planning its biggest construction surge in east Jerusalem in decades in a move that critics argue would cement its grip on the contested territory, further complicate any prospects for peace with the Palestinians, and badly rattle Israel's already rocky relations with the rest of the world. With more than 9,000 apartments in various stages of planning and construction, Prime Minister Benjamin Netanyahu is reaffirming his opposition to ceding any parts of the holy city to the Palestinians, a compromise two of his predecessors had accepted. The planned construction contributes to completing a ring of Jewish areas around the Arab inner core of east Jerusalem, making it more difficult to one day link it to the West Bank, which surrounds the city on three sides. The Palestinians, who hope to establish a future capital in the holy city's eastern sector, say there can be no peace accord without partitioning Jerusalem. They claim the construction push proves Netanyahu isn't serious about establishing a Palestinian state alongside Israel. Within the space of a single week, Israeli officials have moved more than 5,000 apartments in east Jerusalem close to the stage where construction can begin, including a project that would build the first new Jewish settlement there in 15 years. With some other 4,000 apartments already being built or about to start, the pace is unprecedented, says Daniel Seidemann, an expert on Jerusalem construction. Those 9,000 apartments would add almost 20 percent to the existing stock of 50,000 apartments built for Jews in east Jerusalem in the 45 years it has been occupied. "In the last three months, we're looking at a surge like nothing we've seen in the past since 1967," when Israel captured east Jerusalem, said Seidemann, who views the construction as an obstacle to peace. Israel annexed east Jerusalem, with its Palestinian population, immediately after capturing the territory from Jordan and began building housing developments for Jews there. The annexation has not been recognized internationally. Today, more than 200,000 Jews live in east Jerusalem alongside some 300,000 Palestinians. Polls show a majority of Jewish Israelis favor holding on to all of Jerusalem, and construction in east Jerusalem has not stirred passionate opposition among Jewish Israelis. Most don't see the Jewish areas of east Jerusalem as illegitimate settlements — preferring to call them "Jewish neighborhoods" — whereas some in Israel vehemently oppose settlements in the West Bank. Yet there is growing nervousness in Israel about the new east Jerusalem plans, with some fearing the current diplomatic woes could blossom into economic isolation as well, driven by the world community's clear impatience with Israel's settling of occupied land. In the longer term, some in Israel warn, if a division is rendered impossible by filling the occupied sector with Jews, there will be no way to reach a deal on the West Bank as well. The area would be in effect absorbed into the Jewish state, rendering it more bi-national and — unless the Palestinians are given the vote — less democratic. Palestinians have increasingly framed the issue in those terms, suggesting to Israelis that the construction runs against their own interests. "The Israeli government is making the two-state solution impossible with this unprecedented settlement building," senior Palestinian official Yasser Abed Rabbo said this week. Netanyahu is forging ahead — and polls show that he remains poised for reelection next month. If anything, he is currently feeling heat from a surging religious party on his right. "With God's help, we will continue to live and build in Jerusalem, which will remain united under Israeli sovereignty," he said at the campaign launch event of his Likud-Yisrael Beitenu list Tuesday night. Such tough talk aims to assuage those on Netanyahu's right who are skeptical that everything in the east Jerusalem pipeline will be built, noting that some construction projects were unofficially frozen in the past under international pressure. If officials do push ahead, the 9,000 could be built within a few years. Other major construction projects in east Jerusalem were either smaller or strung out over a decade, said Seidemann. Hagit Ofran of Peace Now, an anti-settlement watchdog group, also said the pace was unmatched. According to Seidemann's figures on the major projects, the big push of the last decade was the Har Homa neighborhood, with 3,200 units built. In the 1990s, 2,200 apartments went up in Ramat Shlomo. In the 1980s, 11,000 apartments were built in Pisgat Zeev. In the 1970s, Israel started building the Neve Yaakov, Gilo, east Talpiyot and Ramot areas, and Seidemann estimates that around 20,000 apartments were built in those areas throughout that decade. The Jerusalem municipality did not respond to multiple requests for its statistics on planned and actual construction Netanyahu put settlement construction plans into high gear to punish the Palestinians for winning U.N. recognition of a de facto state of Palestine in east Jerusalem, the West Bank and Gaza Strip last month. Israel withdrew settlers and soldiers from Gaza in 2005, but still controls the West Bank and east Jerusalem. In peace talks, Palestinians privately have accepted former U.S. President Bill Clinton's 2000 proposal that Jewish areas of Jerusalem would remain under Israeli sovereignty under a peace accord, and Palestinian neighborhoods would become part of a Palestinian state. At the same time, they have spent four decades watching Israeli construction permanently change the face of the city, and see every new housing project in east Jerusalem as yet another obstacle to building their capital there. Building for Arabs in the eastern sector has been limited since 1967, something Palestinians see as an attempt to stifle their presence in the city, though the current municipality denies any discrimination. The expanding Jewish footprint in east Jerusalem also tightens Israeli control around the heart of the Israeli-Palestinian conflict: the Old City, home to the most sensitive Jewish, Muslim and Christian religious sites in the Holy Land. A hilltop compound there is Islam's third-holiest site, revered as the place where the Prophet Muhammad ascended to heaven in a nighttime journey told in the Quran. The same complex is the holiest site in Judaism, home to two biblical temples, with the Western Wall at its foot. Palestinians have refused to return to the negotiating table unless Israel stops all construction in east Jerusalem and the West Bank, a condition Israel rejects. Talks deadlocked four years ago. The renewed construction push in east Jerusalem has drawn international condemnation, as have plans to build more than 6,000 more homes for settlers in the adjacent West Bank, where more than 340,000 Jews live among 2.3 million Palestinians. Last week, the United States used unusually blunt language to criticize the settlement activity, accusing its top Mideast ally of engaging in a "pattern of provocative action" and saying plans of new construction "run counter to the cause of peace." The most contentious of these plans involves development of a corridor in the West Bank linking east Jerusalem and the Maaleh Adumim settlement. The Palestinians say this project, known as E1, would make it impossible for them to create a viable state because it would sever east Jerusalem from its West Bank hinterland and drive a deep wedge between the West Bank's northern and southern flanks. Israel shelved the project for years under U.S. pressure, but started acting on plans to build 3,400 apartments there earlier this month. Netanyahu's aides have said construction is years away and his rivals have questioned whether he really intends to build. But the very fact that plans there are advancing has drawn ferocious criticism from Israel's closest Western allies. Some of the projects closer to fruition would similarly hinder access from the West Bank. Following action last week, the government can soon ask developers to submit bids to build 2,610 apartments in the Givat Hamatos project — the first new settlement to be built in east Jerusalem since 1997. Once a bid is awarded, construction can begin, though it could take months, if not longer, to reach that point. Within the following week, officials pushed two other projects totaling up to 2,700 apartments to that same stage.

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Egypt's Mubarak moved to army hospital on health concerns

Hosni Mubarak, the Egyptian strongman ousted last year after 30 years in power, was moved to an army hospital from a prison hospital on Thursday following a fall that raised fresh concerns about his fragile health. Mubarak, 84, was forced out in a 2011 uprising and sentenced to life in prison in June of this year for his role in killing protesters during the revolt. He was admitted to a prison hospital that month following what security officials called a "health crisis". Mubarak's health has been the subject of intense speculation in Egypt and he has spent much of the time before and after his trial in the prison hospital. His lawyer said he was transferred to the military hospital after fracturing a rib in the fall in his prison clinic. He said he also suffered from lung complications and dizziness. "The health condition is deteriorating to some extent due to the president's fall the week before last," lawyer Mohamed Abdel Razek told Reuters. Mubarak is to be treated at the military hospital in Cairo's Maadi suburb. "He will stay for awhile," a security source told Reuters. Mubarak's legal team had been pressing to have him moved from the prison hospital to a better-equipped facility, saying he was not receiving adequate treatment. There has been no clarity, however, on the exact nature of any of his ailments, with state media reporting a variety of illnesses ranging from shortage of breath to heart attacks and comas. On July 16 Mubarak was sent back to prison on the orders of the former public prosecutor who said his health had improved and he no longer needed the advanced care of the military hospital where he had been moved in June. At the time, senior officers and military sources gave various accounts of Mubarak's condition, including that he was in a coma and on life support. The fate of his family, accused by Egypt's new rulers of accumulating vast wealth illegally during Mubarak's long reign, is also the subject of much speculation. Public prosecutor Talaat Abdallah has agreed to a request from Egypt's illicit gains authority investigating corruption to confiscate funds from two bank accounts belonging to Mubarak's wife Suzanne and move them to the central bank, the MENA news agency said. The state newspaper al-Ahram said the amount to be confiscated was 27 million Egyptian pounds ($4.4 million). In May 2011 Suzanne Mubarak was released from detention on graft accusations and relinquished some of her assets to the state. Mubarak's two sons are also being held in prison, facing trial on graft charges, which they deny.

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Secret UK files lift lid on Thatcher-Reagan Falklands contacts

Britain's former Prime Minister Margaret Thatcher wrote an emotional letter to U.S. President Ronald Reagan during the 1982 Falklands War calling him the "only person" who could understand her position, formerly secret documents showed on Friday. Newly declassified files from 1982 lift the lid on contacts between the two leaders over the crisis and reveal the extent of the pressure Thatcher felt she was under when Argentina invaded the remote South Atlantic archipelago to reclaim what it said was its sovereign territory, triggering a 10-week war. In one file, the tough, outspoken Thatcher called the build-up to the Argentine invasion the "worst, I think of my life", while letters to Reagan from the time show her reliance on the U.S. president and their close working relationship. "I am writing to you separately because I think you are the only person who will understand the significance of what I am trying to say," Thatcher told Reagan in one letter, saying the principles of democracy, liberty and justice were at stake. Britain held its breath when Thatcher dispatched a naval task force to the British-ruled Falkland islands following the Argentine invasion. Despite losing several warships, the British eventually reclaimed the South Atlantic islands 74 days later. Some 649 Argentines and 255 British troops were killed. Elsewhere, the files show that Thatcher stressed the special relationship between the two countries as she requested Reagan's help in a letter signed off with "Warm personal regards, Margaret". "I also believe that the friendship between the United States and Britain matters very much to the future of the free world," she wrote. The files provide a unique perspective on the first and only female British prime minister's personal feelings as she waged war against Argentina, contemporary records specialist Simon Demissie told Reuters. "You really hear how personally strained she was, how surprised she was. Her voice really comes through - her sense of shock that she would have to send forces to the other side of the world," Demissie said. "We get a sense that she is as decisive as ever and that is something which really appealed to the military officials close to her," Demissie said in reference to minutes from the War Cabinet meetings ahead of the crisis, which were also released on Friday. CLANDESTINE HELP Secret for 30 years, the files reveal Thatcher's political maneuvering during other events in 1982, including the Iran-Iraq war, the imposition of military rule in Poland and the Israeli invasion of Lebanon. They also show that British attitudes to its U.S. ally were less deferential than the prime minister's letters to Reagan suggest. In a transcript of a telephone conversation between Thatcher and her foreign minister, the prime minister criticized Reagan's communication style, describing a message from the president as "so vague I didn't think it was worth reading when it came in at half-eleven last night". In another file, she noted "the US just does not realize the resentment she is causing in the Middle East", while a Foreign Office briefing on Reagan described the actor-turned-politician as "knowing much less than he seems to". However, one document showed how deeply indebted British officials felt to the United States for its "clandestine help" during the Falklands war; help that the United States was anxious be kept secret. "The US have made it clear that they do not wish to reveal publicly the extent of the help with which they are providing us. They are very much worried about the effects on their relations with South America. We must accept this as a fact of life," a Ministry of Defense letter said. The United States assisted Britain with intelligence and communications facilities as well as with military equipment such as munitions, the document said, confirming information already in the public domain. Emblazoned with the words SECRET and CONFIDENTIAL, many of the 6,000 declassified files will prove a treasure trove for history students keen on ferreting out hitherto unknown details of the major political events of 1982, said records specialist Demissie. "Everything comes out in the end," he said.

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Japan voters back new PM cabinet, economy top priority

More than half of Japanese voters support new Prime Minister Shinzo Abe's cabinet, media surveys published on Friday showed, with the country's stagnant economy topping the list of problems voters want the hawkish new leader to tackle. Abe took office on Wednesday, after his conservative Liberal Democratic Party's (LDP) landslide election victory this month, promising to revive the world's third-biggest economy with bold monetary easing and big spending by the debt-laden government. Support for Abe's cabinet, which is packed with allies who share his conservative views but leavened with some party rivals, ranged from 52 percent in a survey by the Mainichi newspaper to 65 percent in a poll by the Yomiuri newspaper. Fixing the economy, now in its fourth recession since 2000, was voters' top priority. Forty-eight percent of voters in a survey by the Asahi newspaper put the economy as their first priority, compared with 11 percent who stressed security issues, which are also a key element of Abe's platform. Abe, 58, wants to revise Japan's post-World War Two constitution limits on the military so Tokyo can play a bigger global security role, but only 32 percent of voters in the Asahi poll backed the move compared to 53 percent who opposed. Voters were split over the LDP's post-Fukushima nuclear disaster energy policy, with 46 percent in favor of its plan to restart off-line nuclear reactors that are confirmed safe and 45 percent opposed, the Yomiuri said. Abe, who quit abruptly in 2007 after a troubled year in office during which his early high support rates crumbled, is all too aware of the need to show results quickly ahead of a July election for parliament's powerful upper house. The LDP and its smaller coalition partner won the two-thirds majority in the lower house that allows them to enact bills rejected by the upper chamber, where they lack a majority, but that process is cumbersome. "We are getting firm support for our practical response," the Yomiuri quoted Shigeru Ishiba, the LDP's No.2 leader, as saying. "We must achieve results so that we can maintain this support.

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Thatcher papers: 'worst moment' of her life

She called it, simply, the worst moment of her life. It came in March 1982 during the days before the Falklands War, after Argentina established an unauthorized presence on Britain's South Georgia island amid talk of a possible invasion of the Falklands, long held by Britain. Prime Minister Margaret Thatcher realized there was little that Britain could do immediately to establish firm control of the contested islands, and feared Britain would be seen as a paper tiger that could no longer defend even its diminished empire. She was told that Britain might not be able to take the islands back, even if she took the risky decision to send a substantial armada to the frigid South Atlantic. "You can imagine that turned a knife in my heart," Thatcher told an inquiry board in postwar testimony that has been kept secret until its release by the National Archives on Friday, 30 years after the events it chronicles. "No one could tell me whether we could re-take the Falklands — no one," she told the inquiry board. "We did not know — we did not know." The assessment is more downbeat than the view offered in Thatcher's memoir, "The Downing Street Years." Thatcher's handling of the Falklands crisis is remembered as one of the key tests of her leadership. The former prime minister, now 87, has been hospitalized since having a growth removed from her gall bladder shortly before Christmas. She has stayed out of the public eye in recent years because of worsening health problems. Argentina did invade on April 2, and Thatcher launched a naval task force to take back the islands three days later, after the United Nations condemned the invasion. Britain succeeded by mid-June. The war claimed the lives of 649 Argentines and 255 British soldiers, along with three elderly islanders. Thatcher testified she had been terrified that by sending the seaborne force which would take weeks to reach the Falklands (known as Las Malvinas in Spanish) she would provoke even more aggressive action by the Argentines while the vessels were in transit. She feared this might make the military operation even more hazardous when they arrived. She persisted in the bold mission despite the risk of an Argentine troop buildup that might force her to turn the armada back, a result that she said "would have been the greatest humiliation for Britain." She doesn't state the obvious political cost: The mission's failure would have cut short the career of Britain's first female prime minister with her almost inevitable ouster as party leader. The vivid picture of Thatcher's feelings of helplessness and rage — and eventual resolve — are portrayed in thousands of pages of formerly Secret documents released by the National Archives. Historian Chris Collins of the Thatcher Foundation — which plans to make the documents available online — said Thatcher's testimony before the inquiry chaired by Oliver Franks was "very carefully prepared" because she felt politically vulnerable. "She was concerned at the damage the report might do her, because there was much potential for embarrassment at the government's pre-war policy of trying to negotiate a settlement with Argentina ceding sovereignty while leasing back the islands for a period, plus suggestions that Argentine intentions could have been predicted and invasion prevented," he said. She concedes to the committee that her political analysis was incorrect because she believed Argentina's junta would not invade, as it was making progress at the United Nations in its effort to build diplomatic support for its claim to the disputed islands. She said she thought the junta wouldn't risk this support with unilateral military action. "I never, never expected the Argentines to invade the Falklands head-on," she told the inquiry board, which was investigating, among other things, whether the government should have been better prepared. "It was such a stupid thing to do, as events happened, such a stupid thing even to contemplate doing. They were doing well." The papers detail how Thatcher urgently sought U.S. President Ronald Reagan's support when Argentina's intentions became clear, and reveal Thatcher's exasperation with Reagan when he suggested that Britain negotiate rather than demand total Argentinian withdrawal. The documents describe an unusual late night phone call from Reagan to Thatcher on May 31, 1982 — while British forces were beginning the battle for control of the Falklands capital — in which the president pressed the prime minister to consider putting the islands in the hands of international peacekeepers rather than press for a total Argentinian surrender. Reagan's considerable personal charm failed on this occasion. Thatcher, in full "Iron Lady" mode, told the president she was sure he would take the same dim view of international mediation if Alaska had been taken by a foe. "The Prime Minister stressed that Britain had not lost precious lives in battle and sent an enormous Task Force to hand over the Queen's Islands (the Falklands) immediately to a contact group," says the memo produced the next morning by Thatcher's private secretary. She told the president there was "no alternative" to surrender and re-establishment of full British control. The newly public documents also reveal an extraordinary draft telegram written several days later by Thatcher to Argentinian leader Gen. Leopoldo Galtieri in which she describes in very personal terms the death and destruction both leaders would grapple with in the coming days unless Argentina backed down. She tells her counterpart that the decisive battle is about to begin, imploring him to begin a full withdrawal to avoid more bloodshed. "With your military experience you must be in no doubt as to the outcome. In a few days the British flag will once again be flying over Port Stanley. In a few days also your eyes and mine will be reading the casualty lists. On my side, grief will be tempered by the knowledge that these men died for freedom, justice, and the rule of law. And on your side? Only you can answer the question." The telegram was never sent, and Galtieri resigned in disgrace several days after Britain reclaimed the islands.

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White House defends offer as 'good faith effort'

 The White House is defending President Barack Obama's proposal to set a higher threshold for tax increases than what he vowed to do during his presidential campaign. The White House says Obama has moved halfway to meet House Speaker John Boehner on a "fiscal cliff" deal that raises $1.2 trillion in tax revenue, down from the $1.6 trillion Obama had initially requested.
White House spokesman Jay Carney says that offering to raise taxes on taxpayers earning more than $400,000 rather than the $200,000 he ran on demonstrates, in Carney's words, Obama's good faith effort to reach a compromise.
The new tax proposal is contained in a broader plan that Obama gave Boehner Monday that would cut spending further and lower cost-of-living increases for most Social Security beneficiaries.

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Factbox: U.S. House "Plan B" tax bill likely to have short shelf life

The U.S. House of Representatives is likely to vote this week on what is being called "Plan B" on avoiding the "fiscal cliff."
The Republican-sponsored legislation aims to extend current low tax rates for most families. Without such action by Congress, across-the-board income tax rates will rise on January 1.
The combination of $500 billion in tax hikes and $100 billion in spending cuts, which are scheduled to start in the new year, could push the U.S. economy into recession, according to experts.
House Speaker John Boehner, the top Republican in Congress, and Democratic President Barack Obama have been trying for weeks to avoid the fiscal cliff with an alternative tax and spending-cut deal. Boehner says he is offering this very limited alternative in case negotiations with Obama fail.
Here are key elements of Boehner's Plan B:
* A House vote is expected on Thursday.
* Boehner expressed confidence on Wednesday that the measure would pass but some House Republican aides were not yet predicting that.
* The White House has said Obama would veto the Boehner Plan B in the unlikely event it made it to his desk.
* Democrats are viewing Plan B as nothing more than a diversion from attempts to reach a broad deficit-reduction deal to avoid the fiscal cliff. They see it as a way for Boehner to give his conservatives a vote on a measure that they can tout as a tax-cut bill for all but the wealthiest and inoculate them against Democratic accusations of obstruction.
* Republicans argue that they are acting responsibly by providing a backstop against massive tax increases in case the Obama-Boehner negotiations fail.
* Once Plan B is dealt with, all attention will shift to whether Obama and Boehner can work out a broad agreement by December 31 or whether the country will go off the cliff. If that happens, there is speculation that some sort of deal might be worked out in the early weeks of January to avoid the full brunt of the tax hikes and spending cuts.
* Under Boehner's Plan B, current low tax rates would be made permanent for families with net annual incomes of up to $1 million. The measure would let tax rates rise on income above $1 million. Without action by Congress, all income tax rates are set to rise on January 1 with the expiration of tax cuts enacted a decade ago by then-President George W. Bush.
* Plan B includes a grab bag of other expiring tax provisions. It would permanently fix the alternative minimum tax so that middle-class taxpayers do not creep into a tax bracket intended for the wealthiest. Annual AMT fixes have prevented tens of millions of households from paying a higher tax rate.
Also included are moves to maintain estate taxes at their current 35 percent rate per individual after a $5 million exemption. The White House backs reverting to the 2009 estate tax levels of 45 percent tax after a $3.5 million exemption per individual, though some moderate Democrats back keeping the current law.
Plan B legislation would raise dividend and capital gains tax rates for those earning $1 million and over to 20 percent, from its current 15 percent for most who pay such taxes. Most Democrats back raising the current 15 percent tax rate on investment income to 20 percent for households earning more than $250,000.
* The Joint Committee on Taxation estimates the plan would reduce U.S. revenues by around $4 trillion over 10 years.
* The plan does not address spending issues, including automatic across-the-board spending cuts also looming at year's end.
* The bill does not address how to resolve a looming stand-off over the government's borrowing authority. The government will need to raise the "debt ceiling" in the next few months to avoid default, and Obama wants higher borrowing authority approved promptly. House Republicans continue to want to hold back and use it as leverage in ongoing fiscal cliff talks, according to aides.
* Senate Majority Leader Harry Reid already has warned there are not the votes in his chamber to pass Boehner's plan. But if the House sent the Senate such a bill, Reid could respond in one of a few ways. He could declare that the Senate in July passed its version of this legislation, but with a $250,000 threshold, and take no further action. Or, he could offer a variation of the Senate-passed bill. Obama has proposed a $400,000 cut-off for maintaining low income tax rates. Reid could embrace that level or another one.
* The legislation is being inserted into an existing bill that originally had to do with Burma trade policy. A House Rules Committee spokesman said this was being done to avoid some potential procedural delays.

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U.S. charges three Swiss bankers in offshore account case

 Three Swiss bankers accused of conspiring with American clients to hide more than $420 million from the tax-collecting U.S. Internal Revenue Service were indicted, the U.S. Attorney's Office in Manhattan said on Wednesday.
The indictment named Stephan Fellmann, Otto Huppi and Christof Reist, all former client advisers with an unnamed Swiss bank. None of the bankers have been arrested, authorities said.
Their attorneys were not immediately known.
The indictment said the unnamed bank did not have offices in the United States.
Banking secrecy is enshrined in Swiss law and tradition, but it has recently come under pressure as the United States and other nations have moved aggressively to tighten tax law enforcement and demanded more openness and cooperation.
In April, two Swiss financial advisers were indicted on U.S. charges of conspiring to help Americans hide $267 million in secret bank accounts.
In January, prosecutors charged three Swiss bankers with conspiring with wealthy taxpayers to hide more than $1.2 billion in assets from tax authorities.
UBS AG, the largest Swiss bank, in 2009 paid a $780 million fine as part of a settlement with U.S. authorities who charged the bank helped thousands of wealthy Americans hide billions of dollars in assets in secret Swiss accounts.

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"Fiscal cliff" turmoil could hit 100 million taxpayers: U.S. IRS

WASHINGTON (Reuters) - U.S. tax authorities warned on Wednesday that as many as 100 million taxpayers - far more than previously estimated - could face refund delays if lawmakers' "fiscal cliff" negotiations fail to fix the alternative minimum tax (AMT) before year-end.
The Internal Revenue Service said in a letter to lawmakers that it was raising its estimate on AMT impact from 60 million.
"It is becoming apparent that an even larger number of taxpayers - 80 to 100 million of the 150 million total returns expected to be filed - may be unable to file," IRS Acting Commissioner Steven Miller wrote.
The AMT is a levy designed to ensure that high-income taxpayers pay a minimum tax. Democrats and Republican typically agree to adjust the tax for inflation to prevent unintended taxpayers from being hit by it.
This year, however, its fate is tied to heated negotiations - primarily between President Barack Obama and House Speaker John Boehner - over future taxes and federal spending as they try to avoid the automatic tax increases and spending cuts known as the fiscal cliff.
The AMT fix for calculating 2012 income tax has broad bipartisan support, but so far been drowned out by the larger federal budget questions.
Without action soon to fix the AMT, there could be "lengthy delays of tax refunds and unexpectedly higher taxes for many taxpayers," Miller said.
The IRS needs congressional authority to update tax-filing software and forms so that Americans can start their tax returns next year. Inaction by Congress on the AMT has left IRS unsure which taxpayers will need to pay the AMT tax.
An IRS spokesman declined to comment on the agency's AMT preparations to date.
"Failure to act on the fiscal cliff will throw the 2013 tax filing season into chaos," Representative Sander Levin, a Michigan Democrat, said in a statement.
About 4 million taxpayers pay the AMT now because Congress routinely "patches" it for inflation to keep it from reaching down into middle-income tax brackets.
Without a patch for 2012, up to 33 million taxpayers will have to pay the AMT, according to IRS.
Obama's most recent offer to Republicans included a permanent AMT patch.
House Republicans plan to vote Thursday on a bill to address the fiscal cliff that also includes an AMT patch.

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What's on the table now in 'fiscal cliff' talks

An update on the latest offers on the table in negotiations to avert a year-end avalanche of federal tax increases and spending cuts known as the "fiscal cliff":
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INCOME TAXES
House Speaker John Boehner would allow income tax rates to rise for people making more than $1 million per year and would hold rates where they are for everyone making less. The top rate on income exceeding $1 million would go from 35 percent to 39.6 percent.
President Barack Obama would freeze income tax rates for taxpayers making $400,000 or less and raise them for people making more.
The two sides are moving closer together. Previously, the Republican House leader opposed allowing any tax rates to go up; Obama wanted higher taxes for individual income above $200,000, or $250,000 for couples.
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PAYROLL TAX
Obama has dropped his proposal to extend a temporary cut in Social Security payroll taxes paid by 163 million workers. Republicans want that tax to go back up.
Raising the payroll tax by 2 percentage points to its old level would cost a worker making $50,000 a year another $1,000 — or a little more than $19 per week — during 2013.
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SOCIAL SECURITY
Obama is offering to reduce cost-of-living increases for Social Security recipients. Republicans have been seeking this as a key to long-term deficit reduction. But many congressional Democrats oppose it.
Government pensions and veterans' benefits would also get smaller cost-of-living increases.
In addition, taxpayers, especially low- and middle-income families, would pay more because of changes in the way that tax brackets are adjusted for inflation.
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MEDICARE
Obama continues to reject Republicans' plan to raise the eligibility age for Medicare from 65 to 67. Boehner now says raising the eligibility age is not essential to a deal.
Obama wants to limit cuts in Medicare and other health care programs to about $400 billion over 10 years; Republicans want to overhaul Medicare to save even more money.
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DEBT LIMIT
Obama wants a deal that would raise the amount the government is allowed to borrow to cover the next two years, to avoid another debt showdown with Congress until after the 2014 midterm elections.
Previously, Obama had demanded permanent authority to increase the debt ceiling without congressional approval. Republicans want Congress to be part of the decision-making process so they can demand budget-cutting in exchange for additional borrowing.
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OTHER TAXES
Obama and Boehner both propose raising taxes on dividends and capital gains from 15 percent to 20 percent.
Both sides would reduce the number of deductions and exemptions that wealthy taxpayers can claim.
Obama would also let estate taxes revert to a 45 percent rate, after the first $3.5 million of an estate is exempted. Boehner backs a plan for a 35 percent rate and $5 million exemption.

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