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February 2009

About a month ago, California officials announced that fiscal problems had prompted them to put a hold on state taxpayer refunds. Now Kansas is doing the same thing. The Wichita Eagle reports that the state is suspending tax refunds and doesn't have enough money in its main bank account to pay employees. According to the paper, Kansas Budget Director Duane Goossen said that the state stopped processing income tax refunds last week. Democratic Gov. Kathleen Sebelius had suggested transferring the necessary money from other state accounts, but such a move requires legislative approval and the GOP refused Monday to allow... Read more →

That variation of the giant discounter's slogan might apply to its philanthropic arm. The Wal-Mart Foundation has awarded a $3.6 million grant to launch a free mobile tax filing program. The retailer-supporter tax tour is a partnership of United Way and the nonprofit One Economy Corporation. According to Wal-Mart's announcement, vans equipped with online filing technology and carrying IRS-certified tax professionals will set-up in Wal-Mart parking lots, as well as at the offices of One Economy’s community partners. Individuals earning less than $56,000 per year can visit the vans and file their taxes free of charge. The Mobile Tax Center... Read more →

For workers, the new Making Work Pay tax credit provision in the just-passed stimulus package will mean a few extra dollars in their paychecks. The latest word is that about $13 a week should start showing up in pay envelopes in June. But what if you don't get a paycheck? That would be the case for retirees and veterans. During last year's stimulus rebates process, these folks got a $300 payout based on the amount of retirement money they received as long as they filed a tax return to let the IRS know of the benefits. That rebate system is... Read more →

The latest economic stimulus package, officially known as H.R. 1, the American Recovery and Reinvestment Act of 2009, is halfway home. The House signed off on the compromise measure this afternoon. The Senate could possibly vote on the bill tonight. As soon as details about what was in the bill, and especially the Making Work Pay credit, started coming out, people started asking questions. Now that the new tax break is imminent, the queries are coming fast and furious. "I already filed my taxes for this year. Do I need to refile now to get this money?" asks Jessica. "Will... Read more →

For some folks, the fact that Friday the 13th falls just before Valentine's Day is appropriate. Too many people rely on sheer luck to make their relationship with a spouse or significant other work. Take it from me, a person who's spent the last 30 years, most of them married, with the same person, it requires a lot of work, not just good fortune or hearts and flowers, to make it last. And for most folks, the hardest task is finding a way to work together financially. That's particularly true in these financial times. Many couples who have relied not... Read more →

February 12 is a pretty big birthday day. Most of the attention today is on Charles Darwin. It's the bicentennial of Darwin's birth. Google has an artsy icon in honor of the man who gave us one of the greatest, and most controversial, scientific breakthroughs. And tons of stories are out there discussing the British naturalist's findings. As we reflect on Darwin today through a tax lens (that is what all y'all are doing today, right?), we can definitely say that the U.S. tax code has evolved over time. But Feb. 12 has a more direct tax connection. Thanks, Abe:... Read more →

I know. You read that headline and said, what the ... ? That's exactly the reaction that Zach had. So he dropped me an e-mail message. I'm a recent graduate just starting out and I have two jobs, which I receive W2s from, and I work freelance as well. I make about 2/3 of my income from the W2 jobs and the rest from freelance work. This year, I got a "1099-G" for the first time. It says that I got $364 refund from the state in 2008, which I did, but I didn't know that you had to pay... Read more →

Everyone knows by now that the Senate approved its stimulus package. I haven't written much (any) on it or the previously approved House version. Why not? Because this stew is still simmering and a lot of cooks will be stirring it in the next few days. As noted in every report on the stimulus packages, the House and Senate have different ideas about what's needed. Some things from both proposals likely will be changed or eliminated altogether. So I'm not getting too excited about what a final bill will or won't do until there is an actual final bill. That... Read more →

The full Senate today approved its economic stimulus package. Now a House-Senate conference committee will have to come up with a melded version that can then be OK'ed, once again, by both legislative bodies before going to Obama for his signature. But one former IRS attorney says there's a much simpler way to stimulate the economy and put more money in our deficit-ridden federal coffers: a national tax amnesty. Tax amnesties are popular with state tax departments. The Federation of Tax Administrators has a list of such programs that have been offered since 1982. In these cases, a state's delinquent... Read more →

Real Taxpayers of Genius e-file

That's the message from Maryland tax officials. Taking a cue from those great "Real Men of Genius" beer ads, the Old Line State tax office salutes Mr. Frustrated Taxpayer, who reduces his tax hassles by e-filing. Maryland's tax advice YouTube spot incorporates the background quips theme of the Bud Light radio ad originals. But despite the light-hearted presentation style, the Maryland video has a serious message. "Bringing humor to the otherwise stressful topic of doing taxes is one way we hope to grab people's attention," Maryland Comptroller Peter Franchot said in a release. The Maryland e-file video closes with Franchot... Read more →

Over the weekend, the chances for a stimulus package relatively soon improved greatly. A group of Senators met on Saturday to devise that legislative body's answer to the previously passed House bill. But there's much work to be done. And it looks like the original deadline of having a measure signed by Obama by the Presidents Day holiday probably won't be met. The reason: There's still lots of political sniping going on, not only between Democrats and Republicans, but also within the parties. Some of the down-and-dirty details are chronicled in U.S. News' Political Bulletin. Now I'm not saying that... Read more →

Taxpayers lost a champion last week when former Internal Revenue Service Commissioner Donald C. Alexander passed away. Alexander was commissioner from 1973 to 1977. During that time he stood up to President Richard Nixon, refusing Nixon's efforts to use the IRS to investigate those on the former president's "enemies list." According to Alexander's obituary in the Washington Post, Alexander learned the day after his swearing-in of a secret band of IRS investigators who combed through the tax returns of 3,000 "notorious" groups and 8,000 individuals. In addition to rebuffing Nixon, Alexander also blocked an effort by the Agriculture Department to... Read more →

What's the answer to our economic woes? According to James K.Galbraith, it's government spending. Uncle Sam needs to spend now. Spend a lot. Then spend some more. In the Feb. 16 issue of Fortune magazine, Galbraith, a professor of government at the LBJ School of Public Affairs at the University of Texas, voiced his support for "a very, very big stimulus package." "Every previous recession in my professional life has been a shock to a reasonably healthy system," Galbraith told the magazine, "This is a general collapse of the core funding mechanism all across the country, and you don't know... Read more →

Helio Castroneves has found maneuvering the federal court system a bit more challenging than the race tracks with which he's more familiar. The two-time Indianapolis 500 winner has been charged with plotting, along with his sister and an attorney, to evade taxes on approximately $5.5 million in income. Last week, he headed to federal court in Miami to seek dismissal of the charges. U.S. District Judge Donald Graham, however, black flagged the request. Another hearing on more pretrial motions is scheduled for Monday. The trial itself is set to start on March 2. Federal prosecutors allege that the Brazilian racer... Read more →

For many of us, this was the first week we could file our tax returns. The reason? We finally got all those tax statements we need to fill out our Form 1040 and associated schedules. You know the paper I'm talking about. Your W-2 from your employer is the biggie. Then there are all those various incarnations of Form 1099, bearing suffixes such as INT, DIV, G, R, B and MISC, just to name a few. If you're paying a mortgage, your lender will send you a 1098 (or an acceptable substitute) detailing the home loan interest and, if they're... Read more →

I see what Obama is doing. This is all part of his secret plan to pump money into the Treasury. He's going to nominate every single taxpayer in America to a Cabinet post in an effort to bring in millions in unpaid taxes. Apparently that's all it takes for tax debts to be revealed. If only that were true. Sadly, it just seems that political wannabees are at best the world's sloppiest tax filers and at worst, just plan old tax cheats. The latest Obama Administration appointee to have tax troubles bared is Hilda Solis. Currently the U.S. Representative for... Read more →

Washington, D.C., is still abuzz about the decision by two Obama Cabinet nominees to opt out of the process. Erstwhile Health and Human Services Secretary Tom Daschle decided that his effectiveness would have been compromised, and other Obama agenda items overshadowed, by his incomplete reporting of income on prior-year tax returns. I'm not so sure that's true. Despite public posturing, Capitol Hill can be a pretty friendly fraternity. Daschle spent a lot of time there, so most folks are familiar with what he could bring to the table as far as HHS issues, particularly health care. Personally, I think it's... Read more →

Tax troubles end Daschle, Killefer hopes

To paraphrase Casey Stengel, "Can't anyone here get their tax returns right?" The apparent answer is a big, fat "no." And that inability has ended the Cabinet hopes of two Obama appointees. Tom Daschle has withdrawn his nomination to head the Department of Health and Human Services. The decision came as both lawmakers and the public continued to question how he neglected to claim all his income, including the value of a chauffeur-driven car, on his returns. There also were some improper charitable tax deductions involved. Although Daschle, a former Democratic Senator from South Dakota, made good on his tax... Read more →

'Girls Gone Wild' founder arrested again

Joe Francis, the man who has made millions off the "Girls Gone Wild" videos, showed up late Monday for a hearing connected to his tax evasion charges. The video entrepreneur said he was five hours late because he was suffering from the flu. The judge didn't care. Francis was taken from the court in handcuffs. The hearing wasn't even on the actual charges that Francis claimed more than $20 million in bogus business expenses. It was to consider his attorneys' request to be removed from the case. Since Joe didn't show, the lawyers are stuck, at least for a while... Read more →

Could it be true? Could Citigroup executives really decide to pull out of the company's 20-year, $400 million agreement with the Mets, which includes naming rights to the club's new baseball stadium? Maybe public shaming does work after all. Reports of financial groups spending extravagantly after receiving Troubled Asset Relief Program (TARP) funds, aka bailout money, have not set well with the public. Last fall, Citigroup received $45 billion in bailout funds. Subsequently, Uncle Sam agreed to cover most losses on $301 billion worth of the financial group's bad assets. And Citigroup's CEO, along with other banking industry officials, are... Read more →