IRS and Telemundo Host Tax Information Program in Spanish

In their newest press release, the IRS announced they are going to team up with national TV network Telemundo for a special one-hour tax program for Spanish-speaking taxpayers set to air on Sunday, January 30. Be sure to check your local listings for exact times.

“Los Impuestos y Usted” will help viewers determine whether they qualify for many tax benefits, including the Earned Income Tax Credit or EITC. Workers who earned $48,362 or less from wages, self-employment or farming last year could receive larger refunds if they qualify to receive EITC.

IRS estimates four of five eligible taxpayers claimed their EITC last year, obtaining an average $2,200 from the credit. To qualify, taxpayers must meet certain criteria and file a tax return, even if they do not have a filing requirement.

Among other topics, the program features Free File, a program that allows individuals to file their taxes online at no cost, how to get free tax help at local community centers and other services available at www.irs.gov/espanol.

Mónica Noguera, host for many of Telemundo’s specials, will present the IRS program, which features in-studio interviews with IRS tax experts. IRS tax experts will also be available during the airing of the program to answer questions.

Continue reading at IRS.gov…

Nearly 70 Percent of Taxpayers Used IRS e-file in 2010

According to the IRS's newest press release about 99 million taxpayers filed their federal income tax returns electronically last tax season. This represents a 3% increase from the year before.

Of the 141.5 million returns filed so far this year, almost 70 percent were filed electronically.

Each year, more taxpayers chose to e-file their tax returns. Last year, nearly 95 million taxpayers, or 67 percent, used e-file. In the past decade, the number of individual tax returns e-filed has increased by 145 percent. The overall number of individual tax returns increased only by 8 percent. IRS e-file is no longer is the exception; now it is the norm.

Home Computer e-Filers

Taxpayers who prepare their own tax returns using home computers continued to set the pace for e-file. This year, more than 35 percent of e-filers prepared and filed their returns themselves.

Almost 35 million returns were e-filed from home computers, up 8 percent from last year.

Direct Deposit Refunds

More than 74 million refunds were electronically deposited into taxpayers’ accounts, saving taxpayers a trip to the bank. More importantly, these taxpayers received their refunds at least a week faster than those receiving paper checks.

Continued at IRS.gov...

Refund Anticipation Loan Alternatives

A few weeks ago I posted a blog entry regarding the IRS’s announcement that they would suspend the availability of the debt indicator next tax season. This indicator was used to identify whether an individual taxpayer would need to have a portion of their refund withheld because of unpaid taxes or other debts, such as unpaid child support or delinquent federally funded student loans.

However, the indicator also enabled tax companies to issue refund anticipation loans (RALs). These refund advances have come under fire over the past few years, because of excessive fees, and some unethical tax preparation offices that target low income taxpayers. Without the debt indicator, tax preparers will not be able to offer RALs.

Since RALs will no longer be available to taxpayers I decided to put together the following list of alternatives. By planning ahead you can prevent yourself from getting into a situation next April where you need extra money in a rush.

File Early

You can file your tax return as soon as tax season begins mid January. If you need your refunds quickly, then you should try to file as early as possible – while making sure you have all the proper documentation. As you get closer to the deadline IRS offices become swamped and it will take longer for them to process your return, and issue a refund. If you need your return quickly, then you should file as early as possible.

E-File your Return

Stop wasting time with paper returns, if you do not already e-file your tax return, then I highly recommend doing so this upcoming tax season. You will get your refund almost as fast as you would with a RAL, but without paying a penny in interest. According to the IRS, paper filers can expect to wait eight to ten weeks for a refund. E-filers, on the other hand, will receive their refunds in only a couple of weeks. Additionally, the likelihood of an error is significantly reduced when you e-file.

Direct Deposit

It is also a good idea to have your refund deposited directly into your bank account. Even if you do not e-file your return, you should still consider opting for direct deposit. When the IRS issues a check, it can take weeks to reach your mailbox. However, when you have the refund direct deposited it will show up in your bank account in as few as ten days.

Visit a Free Tax Preparation Office

If you are worried you might not be able to pay to have your tax return prepared without a RAL, you should consider visiting one of the IRS’s free tax return preparation sites offered by the Volunteer Income Tax Assistance Program (VITA) and the Tax Counseling for the Elderly (TCE) Program. In order to be eligible for the free service, you will need to meet certain income requirements. For more information visit this page on IRS.gov.

Payday Loans

Just in case you do find yourself in a situation where you have no other option, you can always consider a payday advance loan. In order to qualify for an advance you will usually only need a steady job, and proof of income. However, you should always use extreme caution with payday loans, as they are notorious for very high fees and interest rates.

Important Tax Deadline Approaching

The deadline for taxpayers who filed a request for an automatic extension is only a few days away (October 15th), and if you have not yet net filed your return then you should do so as soon as possible. However, Friday is also a deadline for thousands of nonprofit organizations at risk of losing their tax-exempt status.

SV Herald.com:

“The Oct. 15 deadline is particularly important this year because it’s the last chance for many small charities to comply with the law under the one-time relief program the IRS announced in July,” said IRS commissioner Doug Shulman. “And as always, it’s an important deadline for taxpayers who took an extension to file their returns.”

Don’t miss your 1040 deadline

The IRS expects to receive as many as 10 million tax returns from taxpayers who used Form 4868 to request a six-month extension to file their returns. Some taxpayers can wait until after Oct. 15 to file, including those serving in Iraq, Afghanistan or other combat zone localities and people affected by recent natural disasters.

The IRS encourages taxpayers to e-file. E-file with direct deposit results in a faster refund than by using a paper return. Electronic returns also have fewer errors than paper returns. Oct. 15 is the last day to take advantage of e-file and the Free File program.

Read more here

The 3 Main Types of IRS Audits

Although the IRS performs over a million audits per year, not every one results in an in person review. In fact, the most popular type of audit is done by mail. The Roni Deutch Tax Center - Tax Help Blog posted a new entry explaining the 3 main types of audits. Check out a section of the article below, or click here for the full text.

Letter Audit

The letter audit is by far the most common type of IRS audit. Typically, letter audits are a simple request for more information, or a list of possible math errors. Some times the audit is just to inform you of a correction that has been made to your return, which can result in either a tax bill, or a larger refund. The IRS may ask you to supply them with a few documents or receipts, and you will be required to respond.

The IRS may take a while to process your response, and it could take weeks or even months before you hear back regarding the audit. With a letter audit you are not required to meet face to face with any IRS representatives. All correspondences can be completed through the mail.

Office Review

The second, and more intimidating type of IRS audit is the office review. You will be asked to meet with an IRS auditor at a place in close proximity to your home address. The representative will work with you to schedule a review at a time that is convenient for you, and you can feel free to ask to reschedule any appointment that might not fit into your schedule.

25 Best Places to Retire

The economic downturn has been especially difficult on retired taxpayers. Fortunately, there are some places in this country that are friendly to retirees. CNN Money.com put together a list of the 25 best places to retire at. You can find a section of the story below, or check out the full list here.

1. Durham, NC

Population: 223,284

% over 50: 25%

Median home price: $163,000

State income tax: 7.75%*

Where to take classes: Duke University

Durham would rank as a retiree Mecca even without Duke University's stellar lifelong-learning program. Residents enjoy four seasons -- but without them being too extreme. Homes are affordable, the area is dotted with golf courses and parkland, and the region is home to a renowned university medical center.

This former tobacco town also is a budding cultural haven. Duke's Nasher Museum of Art has a growing contemporary art collection. Concerts and Broadway hits, such as Billy Elliot and the Lion King, frequently make their way to the newly built 2,800-seat Durham Performing Arts Center.

2. Hanover, NH

Hanover, NH

Population: 8,516

% over 50: 25%

Median home price: $401,000

State income tax: 5%*

Where to take classes: Dartmouth College

New England is chock full of charming villages. But few are as welcoming to retirees as Hanover, home of Dartmouth College and its 20-year-old senior education program.

Outdoor enthusiasts can kayak on the Connecticut River or hike in the White Mountains. Winter, of course, brings 94 inches of snow on average, so residents make the most of the cold (five ski hills are within an hour's drive) or head south.

Continue reading at CNN Money.com…

Obama Considering Tax Cuts to Boost Economy

Earlier today new reports emerged predicting that the Obama administration will propose a set of new cuts to Congress. These tax incentives are said to be aimed at helping small business owners to help with the country’s ongoing unemployment problem.

CBS News reports:

On the morning after President Obama told Americans in a primetime address from the Oval Office on Iraq that getting the economy moving again was his "central responsibility as president," The Wall Street Journal ($) reported the administration is considering tax cuts to give the economy a boost.

Unnamed sources tell the newspaper that Mr. Obama's economic team might ask Congress for additional tax cuts for small businesses in addition to the $30 billion of similar cuts awaiting a vote in the Senate.

The Journal reports there's not a clear view of what kinds of small businesses would benefit from the yet-to-be-proposed cuts or how much revenue the government would lose.

The administration might also propose a payroll tax cut for businesses and individuals, the sources told the newspaper. Tax cuts passed during the president of George W. Bush are scheduled to expire at the end of the year, which would make income taxes rise.

Whether any major proposal will receive congressional approval between now and the pivotal mid-term elections is uncertain. The House and the Senate aren't scheduled to convene again until Sept. 13. Democratic aides on Capitol Hill told the newspaper that there's not much of a chance for any immediate action with the party's majorities at stake.

Read more here

IRS Seeks New Issues for the Industry Issue Resolution Program

In a new press release, the IRS encouraged business owners and other interested taxpayers to participate in the Industry Resolution Program by submitting tax issues that are in need of a resolution.

The objective of the IIR program is to resolve business tax issues common to significant numbers of taxpayers through new and improved guidance. In past years, issues have been submitted by associations and others representing both small and large business taxpayers, resulting in tax guidance that helps thousands of taxpayers.

Recent submissions accepted into the IIR program include:

• Network assets in the telecommunications industry (unit of property)
• Asset class determination under Revenue Procedure 87-56 for wireless telecommunication assets
• Vendor mark down allowances in calculation of inventory under the retail inventory method
• Network assets in the utilities industry (unit of property)

Guidance issued as a result of the IIR program includes:

• Technical terminations of publicly traded partnerships - procedures for requesting relief, delegation of authority for granting relief, and a sample closing agreement documenting the conditions under which relief is granted. (Industry Director Communication LMSB-04-0210-006)
• Auto Last In First Out - for automobile wholesalers, manufacturers and dealers regarding the proper treatment of the dollar-value, LIFO inventory method for pooling purposes of crossover vehicles, which have characteristics of trucks and cars. (Revenue Procedure 2008-33)

How to Stop the IRS Machine

Taxpayers all over the country are receiving letters from the IRS with unsettling news. According to Forbes, the IRS has been sending out bills to taxpayers because of discrepancies between their 2008 tax return and income totals reported by employers and other sources. However, before you reach for your checkbook, be sure to take a careful look at the notice. Many of the letters are reportedly incorrect and/or misleading.

Forbes.com reports:

It's document matching time at the Internal Revenue Service. Millions of taxpayers are opening their mailboxes to find a boldly stated notice shouting "Summary of Proposed Changes" identifying an increase to their 2008 taxes, penalties, interest and a whooping Proposed Balance Due. These notices are often more than 10 pages long, and not until you've gotten to page five do you find out what the IRS alleges created the problem: discrepancies between the amounts reported to them by others and what you included in your return. This is the meat of the letter (known as a CP-2000 notice) and often where you will find what led to the notice "mis-match."

Do not reach for your check book in defeat. Do not immediately scream obscenities about your tax preparer. These letters are often wrong. They are directed at getting your attention. They are machine-generated, generally unseen or untouched by human eyes or hands until the taxpayer responds to the notice. Until a response is received and logged in by IRS personnel, the machine will control the process. Uninterrupted, this automation will lead the IRS to be legally entitled to collection of the balance being proposed. Here are a few examples illustrating the variety of issues on notices I've seen recently:

Shock and Awe Proposed Balance Due: $54,871; Actual Balance Due: Zero

The IRS computers concluded the taxpayer had an IRA distribution of $198,981, but showed a taxable IRA distribution of just $40,000 on the return. The real story is this: The taxpayer converted a pre-tax IRA worth $198,981 to a Roth IRA early in 2008, and he correctly reported this as an IRA distribution on his 2008 return. The stock market dropped dramatically toward the end of 2008. Not willing to pay taxes on an amount well in excess of the account value in early 2009, he properly "re-characterized" (returned to his traditional IRA before filing) all but $40,000 of the converted amount, reporting that amount as taxable on the return. He correctly disclosed this and included Form 8606 on his return. It was all explained, but the IRS machines had not checked for those entries. (For 10 Reasons To Convert To A Roth IRA, click here.)

Shock and Awe Proposed Balance Due: $524; Actual Balance Due: Zero

The taxpayer authorized $2,000 of her 2008 IRA distribution to be donated to her local church. Her tax return correctly indicated a $21,690 distribution with $19,691 taxable. As the IRS instructions dictated, the code "QCD" (for qualified charitable distribution) was indicated on the return. But the IRS' "automated underreporter" systems apparently did not notice the code.

Read more here

N.Y. Judge Calls Husband's Pre-Divorce Filing of Back Taxes 'Despicable'

According to Law.com, a New York judge recently ruled that a taxpayer’s move to file amended returns claiming over $1.5 million of extra income on the day of his divorce trial was a malicious attempt to stop his wife from recovering marital assets.

"It is well settled that expenses (including unpaid taxes) incurred prior to the commencement of a divorce action constitute marital debt which, under normal circumstances, should be equally shared by the parties. However, in those rare instances where a party's conduct in creating a debt is so egregious, shocking, fraudulent or malicious, the Court can exercise its discretion and refuse to apportion the debt," Acting Supreme Court Justice Andrew A. Crecca wrote in Maria C. v. Dominick C., 04775/08.

"Under the facts and circumstances of this case," the judge concluded, "this is one of those rare instances."

The Dix Hills couple, whose names were redacted from the decision, were married in 1987 and had four children. The husband runs a home-improvement company, the wife worked "in the secretarial field," as Justice Crecca put it, until their first child was born.

The wife, Maria C., filed for divorce in 2008 on the ground of constructive abandonment. The judge found that the couple had not cohabited as husband and wife since January 2007 and that the husband had refused "to engage in marital relations."

Shortly before the divorce went to trial in March, the defendant-husband, Dominick C., unilaterally filed marital tax returns for the years 2004 through 2007.

In the amended returns, the husband admitted earning more than $1.6 million in unreported income over those four years.

The husband filed the returns on his own initiative, as the couple was not being audited or under investigation, and without his wife's signature. He included on the cover page a list of assets the government might consider attaching, including the couple's house. The husband stated the house's value ($1.2 million), the size of the mortgage and the name of the bank that held the loan.

IRS Provides Tax Help, Guidance to Gulf Oil Spill Victims

Over the weekend, the IRS published a new press release with guidance for individuals and businesses affected by the oil spill in the Gulf of Mexico and announced a number of new efforts to help affected taxpayers, including a special Gulf Coast Assistance Day on July 17.

“This is a very difficult time for many people affected by the oil spill in the Gulf of Mexico. As residents of the region cope with the evolving situation, I want to assure them that the IRS will be doing everything it can to provide tax help to those who need it,” IRS Commissioner Doug Shulman said. “We encourage anyone who has an issue with the IRS to contact us and explain their hardship, and we will work with them to find a solution. We’ll do everything we can under current law to help taxpayers.”

The guidance released today is based on current law, and it explains how recipients of payments from BP should treat the payments for tax purposes. According to the current law, BP payments for lost income are taxable in the same way that the wages or business income these payments are replacing would have been. The law treats compensation for lost wages or income differently for tax purposes than compensation for physical injuries or property loss, which generally are nontaxable.

Every person can have unique financial circumstances, so the IRS encourages taxpayers to review their tax situation or talk with their tax preparers about the implications of payments or compensation from the oil spill.

The new information is available in a question-and-answer format on a special section of the IRS website, IRS.gov. The IRS is closely monitoring the situation in the Gulf, and additional information will be added to IRS.gov as it becomes available.

Anti-Tax Initiative Qualifies on California Ballot

California taxpayers will be voting on a new anti-tax initiative in November that would make it illegal for lawmakers to approve taxes disguised as fees without a proper vote. According to Mercury News, both the California Taxpayers Association and the California Chamber of Commerce are supporting the initiative.

California's secretary of state certified the initiative Thursday, the ninth to go before voters in November.

The proposition would stop state lawmakers from approving taxes disguised as fees without the constitutionally required two-thirds vote for a tax increase. Passing a fee right now only requires a majority vote of the Legislature.

Supporters say lawmakers try to skirt the high vote threshold required to approve taxes by labeling charges as fees on everyday items such as food and fuel.

The initiative also would require local officials to bring similar fee increases to voters.

How To Set Up Your First 401k

Retirement may seem decades away to younger taxpayers, but most financial experts actually say the best time to start saving for the future is in your early twenties. However, most taxpayers in their twenties are usually focused on school, their first serious jobs, or even starting a family. Fortunately, MSN Money recently published a helpful article on how to setup your first retirement plan, and I highly recommend anyone without a 401k or IRA check it out below.

Start early

Money you tuck away for retirement in your 20s has decades to compound. Make savings automatic, beginning with your first paycheck, and try to ramp up your contributions whenever you get a raise.

"Our goal for new employees just getting into the work force is we want to get them to save 10% of their gross wages as soon as possible," says Mark Berg, a certified financial planner and the president of Timothy Financial Counsel in Wheaton, Ill. Those who can't afford 10% right away can start smaller. "We try to target 4% to 5% initially and then as they get raises, we'll add a percent or two to the amount they are putting in," says Berg.

If your company has a waiting period before new employees are allowed to join the 401k plan, make note of that date and begin participating as soon as you are eligible.

Get a 401k match

An employer match is a powerful incentive to participate in a 401k. A company match of 50% of contributions up to 6% of pay for an employee earning $35,000 annually can boost that worker's retirement savings by $1,050 each year.

If your employer doesn't offer a 401k match, it's still worthwhile to invest in a 401k for the tax break. Young employees can contribute up to $16,500 to a 401k in 2010 and won't pay income taxes on the amount contributed until retirement.

Consider a Roth 401k

Some companies offer a choice between traditional and Roth 401k's. Traditional 401k deposits give you a tax break in the year you make the deposit, but income tax is due when the money is withdrawn. Roth 401k contributions are made with after-tax dollars, and withdrawals in retirement are tax-free.

The Roth option can be a good deal for young people who are currently in a low tax bracket. "People who potentially will retire in a higher tax bracket than they are in right now should use a Roth," says Clark Kendall, a certified financial planner and the founder of Kendall Capital Management in Rockville, Md.

High-Income Taxpayers Should Maximize Charitable Contributions, Other Itemized Deductions in 2010

If you are a high-income taxpayer, and are considering a significant charitable donation then you should consider making it in before the end of 2010, according to the Tax Foundation. This year, a handful of restrictions on itemized deductions – including those on charitable contributions – will return beginning in 2011, after a year-long hiatus.

"The federal individual income tax has, since its inception, allowed for personal exemptions to provide tax relief to low-income filers," said Tax Foundation Chief Economist Patrick Fleenor, who authored the report. "Over time, politicians have also created itemized deductions to favor certain products and services. To raise revenue, the federal government has over the past 20 years scaled back the benefits of personal exemptions and itemized deductions by phasing them out for high-income people through the PEP and Pease provisions, which have created significant problems, raising marginal tax rates and adding to tax complexity."

Tax Foundation Special Report, No. 178, "PEP and Pease: Repealed for 2010 But Preparing a Comeback," is available online at http://www.taxfoundation.org/publications/show/26260.html.

In some cases, PEP and Pease push the marginal tax rate up substantially. Next year, under President Obama's budget, a married couple filing jointly with combined AGI of $254,550 would pay a 28 percent rate without PEP and Pease, but a 30.5 percent rate with PEP and Pease. Couples earning a little more, over $262,950 in AGI, would face a marginal effective tax rate of 39.2 percent instead of 36 percent, according to the report.

The Pease provision, named after former U.S. Representative Donald Pease (D-OH), phases out the benefits of itemized deductions -- such as deductions for mortgage interest, state and local tax paid and charitable contributions -- for high-income earners. In 1991, the first year it was in effect, the income threshold below which a taxpayer would keep the entire value of his itemized deductions was $100,000 in AGI for joint filers and $50,000 for all other filers. A taxpayer declaring income above the threshold and claiming itemized deductions that are subject to Pease would have to subtract 3 percent of the income above the threshold from the deduction amount.

In 2009, the phase-out threshold for Pease, which is indexed for inflation, was $166,800 for joint filers and $83,400 for other filers. Under President Obama's policies, the threshold for Pease would be $254,550 for married couples and $203,650 for singles.

Continue reading at TaxFoundation.org…

4 Million Will Pay Health Care Penalty

A Congressional Budget Office (CBO) report has been released, and if their predictions are correct 21 million Americans will be without health insurance in the year 2016. 4 million of them will likely be required to pay a penalty for being uninsured. According to this CNN article, the CBO is projecting the federal government could see a $4 billion per year revenue increase between 2017 and 2019.

High-income families making at least $96,000 will pay two-thirds of those fines, while families making between $24,000 and $96,000 will contribute nearly one-third of the funds collected.

Under the health care overhaul, which legislators passed in March, most U.S. residents will be required to purchase health care or pay a fine. By 2016, the penalty will be either a flat $695, or 2.5% of household income -- which ever is higher. The fines are capped based on income.

The CBO report noted the majority of the uninsured will not be subject to these fines because they belong to exempt groups including extremely low-income households, some religious sects and unauthorized immigrants.

Cigarette Tax Bump in 15 States Lifts U.S. Fees to $2.35 a Pack

After cigarette taxes went up in 15 states during the year 2009, it brought the national average to an astounding $2.35 a pack. The average state tax assessed on a pack of cigarettes is $1.34, in addition to the $1.01 federal tax that was also increased last year. As this Bloomberg.com article explains, the various increases have resulted in more than $1 billion in new state and federal tax revenue.

Smoking rates in the U.S. fell about 15 percent in the last decade, though declines slowed in the last five years, according to the Atlanta-based CDC. Thomas Frieden, the agency’s director, has warned that decades of smoking reductions may be ending unless taxes increase and more money is spent on education.

“Increasing cigarette excise taxes is one of the most effective tobacco control policies,” the report’s authors wrote. “Additional increases in cigarette excise taxes and dedication of all resulting revenues to tobacco control and prevention programs at levels recommended by CDC could result in further reductions in smoking.”

Each $1-a-pack increase brings in about $9.1 billion in annual tax revenue, according to the report. A dollar increase, over time, also prevents about 1 million smoking-related deaths and stops 2.3 million children from becoming smokers, the CDC said.

Continue reading at Bloomberg.com…

Beware of IRS’ 2010 “Dirty Dozen” Tax Scams

Earlier today the IRS published their 2010 list of 12 tax scams to look out for in this new press release. Amongst the “dirty dozen” scams are phishing, zero wages, and income hidden offshore. You can find a section of the release below, or read the full text at IRS.gov.

Hiding Income Offshore

The IRS aggressively pursues taxpayers involved in abusive offshore transactions as well as the promoters, professionals and others who facilitate or enable these schemes. Taxpayers have tried to avoid or evade U.S. income tax by hiding income in offshore banks, brokerage accounts or through the use of nominee entities. Taxpayers also evade taxes by using offshore debit cards, credit cards, wire transfers, foreign trusts, employee-leasing schemes, private annuities or insurance plans.

IRS agents continue to develop their investigations of these offshore tax avoidance transactions using information gained from over 14,700 voluntary disclosures received last year. While special civil-penalty provisions for those with undisclosed offshore accounts expired in 2009, the IRS continues to urge taxpayers with offshore accounts or entities to voluntarily come forward and resolve their tax matters. By making a voluntary disclosure, taxpayers may mitigate their risk of criminal prosecution.

Phishing

Phishing is a tactic used by scam artists to trick unsuspecting victims into revealing personal or financial information online. IRS impersonation schemes flourish during the filing season and can take the form of e-mails, tweets or phony Web sites. Scammers may also use phones and faxes to reach their victims.

Scam artists will try to mislead consumers by telling them they are entitled to a tax refund from the IRS and that they must reveal personal information to claim it. Criminals use the information they get to steal the victim’s identity, access bank accounts, run up credit card charges or apply for loans in the victim’s name.

Taxpayers who receive suspicious e-mails claiming to come from the IRS should not open any attachments or click on any of the links in the e-mail. Suspicious e-mails claiming to be from the IRS or Web addresses that do not begin with http://www.irs.gov should be forwarded to the IRS mailbox: phishing@irs.gov.

IRS Investigates Flurry of Threats Against its Workers and Facilities

According to the Washington Post, the number of threats being made against Internal Revenue Service employees has been rapidly climbing since the incident last month when a plane flew into an IRS office. The pilot and one IRS employee died in the crash, and since then the IRS has investigated more then 70 reported instances of a threats being made by taxpayers to IRS workers.

Workers have received a mix of inappropriate verbal comments -- including jokes or statements of support for pilot A. Joseph Stack -- and more serious threats, claimed National Treasury Employees Union President Colleen M. Kelley.

Kelley said she learned of the threats from the Treasury Inspector General for Tax Administration, which tracks threats against IRS workers. Neither TIGTA nor the IRS would confirm the number of threats or share details of the probe.

"TIGTA is actively and aggressively investigating all threats made against IRS employees, infrastructure and property," said J. Russell George, the treasury inspector general for tax administration. His office and the IRS have instructed workers to report threats immediately. "It would be a little naive to think that we don't get some threats over the course of doing business," said IRS Communications Director Terry Lemons.

Attacks and threats against IRS workers and facilities are nothing new and are not confined to the annual spring tax filing season, Lemons said. People have rammed cars into offices as well as set them on fire. And some people have taken out hits on agency employees, he said.

IRS Outlines Steps to Assist Taxpayers?

In this new press release, the IRS explains the tactics they are using to assist “unemployed taxpayers and others,” however as one of the attorneys at my law firm pointed out some of the statements they make are nearly identical to ones they made in this press release—published a year ago.

Last year, the IRS promised to provide assistance in the following areas:

• Postponement of Collection Actions
• Added Flexibility for Missed Payments
• Additional Review for Offers in Compromise on Home Values
• Prevention of Offer in Compromise Defaults
• Expedited Levy Releases

Then in this new release the IRS now promises to help taxpayers in the following ways:

• Postponement of collection actions in certain hardship cases
• Added flexibility for missed payments on installment agreements and offers in compromise
• Additional review of home values for offers in compromise
• Accelerated levy releases for taxpayers facing economic hardship

Is the IRS really putting extra effort into helping unemployed taxpayers, or just reusing an old press release? Either way, actions speak louder than words and I just have not seen any real action on these objectives.

Obama's Proposal to Limit Itemized Deductions to 28% Rate

From the Tax Professor Blog:

President Obama proposes to fund his health care bill in part by limiting the tax rate at which itemized deductions reduce tax liability to 28%:

The Administration proposes to limit the tax rate at which high-income taxpayers can take itemized deductions to a maximum of 28 percent, affecting only single taxpayers with income over $200,000 and married taxpayers filing a joint return with income over $250,000 (at 2009 levels). The proposed limitation would be effective for taxable years beginning after December 31, 2010.