The U.S. House of Representatives decided to give the IRS a little more money, but lawmakers also put limits on how the tax agency could spend the funds. Specifically, the appropriations bill prohibits the IRS from hiring any more private debt collectors. The restriction would not alter the debt collection contracts the IRS announced in March (details here). Those have been on hold pending an investigation of an allegedly improper contracting process (details here). When the matter is resolved, if it is resolved in favor of the three companies the IRS picked to track down unpaid tax bills, those firms…

I entered IRS’s electronic lair today. I paid our second installment of 2006 estimated taxes via the agency’s Electronic Federal Tax Payment System, aka EFTPS. For many years, I’ve written these checks and dropped them in the mailbox, usually on the deadline day (the 15th of April, June, September and January). That was particularly appealing back when there was check float, the actual time — days even! — it took checks to clear. But Check 21 did away with that and I’ve since become a devotee of online bill paying.I ramped up my e-money management this year, finally e-filing our…

<p>Section targeting</p> The war is finally over! The battle over an outdated tax to fund the Spanish-American War, that is. The U.S. Treasury Department today surrendered in its efforts to continue collection of the federal telephone excise tax. This tax was originally imposed more than a century ago to finance the Spanish-American War. You remember that war, don’t you? On April 25, 1898, the United States declared war on Spain in response to the sinking of the battleship Maine months earlier in Havana harbor. A temporary penny tax was then tacked onto long-distance calls to pay for the costs of…

During this string of hot and dry spring days, it’s hard to image that 25 years ago today, Austin suffered a deadly flood. Austin’s Memorial Day Flood of May 24, 1981, killed 13 people, destroyed 600 homes, flooded dozens of businesses and left $36 million in damages in its wake. The picture below shows damage done to a car dealership along Shoal Creek. Flood photograph courtesy of Austin Public Library and Austin History Center. …The power of water has always captivated me. Much of the fascination is because I grew up in desert West Texas, where not a stream was…

Since about half of us still file our taxes using paper forms, we’re keeping a whole group of IRS staffers employed. I’m talking about the folks who must take those handwritten or, if they’re lucky, typed forms and enter them into the agency’s computer system for processing. I suspect that this is not one of the top five jobs in the world. It’s got to be a bit tedious, typing in names and mostly numbers hour after hour, day after day. The stress level also is probably pretty high, knowing that one errantkeystroke could cause some taxpayer a fair bit…

I found the carpet in my office today. It’s that oatmeal color favored by builders and people who are sprucing up the house before they put it on the market. Neutral shades, you know, tend to appeal to more potential buyers. Unfortunately, I also found a couple of gray, smudgy spots on the carpet that I didn’t remember seeing before. Since about mid-January, the spots apparently were covered with tax material that took up about half my office’s floorspace. Now in my defense, a lot of that stuff was tax books,  IRS publications, various magazine and newspapers, online tax documents…

In all my years of filing taxes, I’ve gotten two follow-up letters from the IRS. The first was back in September 1996, and it began: "We’re proposing changes to your 1994 tax return." Yep, almost 2½ years later and IRS examiners are hard at work. It took them that long to notice that "the information on your tax return isn’t the same as the information reported to us by your employers, banks, and other payers." In this case it was those "other payers" that tripped me up. Although I’d been reporting dividend and capital gains distributions for years on our…

That was the subject line from a reader’s e-mail the other day. She was at wit’s end trying to find and decipher information on potential tax breaks. As truly empathetic as I am to her plight, I must admit that her e-mail not only jumped out at me from all the other missives crowding my e-mail box, it also cracked me up! Most of us curse. Many of us curse way too much. And few of us need to chew on that bar of soap my mother always threatened. But the reality of life in the 21st century is that…

Yesterday I threw a couple of rocks at tax preparation chains that messed up client returns. Today, I’ve been Windexing all the glass around my house and realized it’s time to spread the tax gaffe blame around a bit. We all make mistakes. Hold on a second. I have to go revive the hubby, who’s staggered to one knee and is gasping a bit after hearing my declaration. OK, he’s fine. He’s going to pay for his smart*** attitude later, but he’s fine right now. Theatrics aside, I repeat: We all make mistakes. And tax returns are a prime showcase…

Did you pay a tax preparer to do your return in February or March? You might want to pull that sucker out and give it another look. Apparently some tax pros screw up returns pretty badly. At least those that the Government Accountability Office encountered did. Michael Brostek, director of strategic issues for the GAO, told a U.S. Senate committee yesterday that the government investigative office visited 19 branches of large, commercial tax chains in a major metropolitan area over the last two months. Find the full GAO report here, and coverage of the hearing in this Washington Post story.…

I’m not a fan of stock options. They were "the" benefit back in the dot-com heyday and a few places still offer them, although an accounting practices change has made them a bit more of a bother for the granting companies. Even if they’re no longer offered like breath mints at your local diner’s cash register, some folks still have options they can eventually exercise. But to my thinking, they’re more trouble than they’re worth. Yeah, I know you get a price break on the stock, which means you’ll net more profit when you sell and all’s good. Unless your…

Call it the IRS version of Crime Stoppers. You know, the program in almost every community where law enforcement solicits the public’s help in nabbing bad guys. Now the federal tax collector wants to hear from people who’ve received fake IRS e-mails purporting to send you a refund in exchange for a little bit of your personal financial information. I got one just this last weekend. If you’ve been lucky enough to avoid this garbage, you can see what it looks like here. The IRS has set up phishing@irs.gov, a special e-mail box, and wants recipients of these bogus refund…

The IRS has issued a stop-work order to three private debt-collection firms that were awarded contracts earlier this month to start going after unpaid tax bills. You can go here to read more about the contracts and why many, including yours truly, thinks such outsourcing is not such a good idea. CCH, the publishing and tax software company, reports that the IRS put the brakes on the controversial collection plan after GC Services LP and Diversified Collection Services, Inc., filed protests with the Government Accountability Office, which handles contracting disputes involving any federal agency. The complaining companies were among the…

It’s official. I’m tax scam bait. This showed up in my e-mail on Saturday: From: Internal Revenue Service To: DontMessWithTaxes @ gmail.comDate: Mar 25, 2006 3:33 pm (2 hours ago) Subject: receive a tax refund …More options After the last annual calculations of your fiscal activity we have determined that you are eligible to receive a tax refund of $63.80. Please submit the tax refund request and allow us 6-9 days in order to process it. A refund can be delayed for a variety of reasons. For example submitting invalid records or applying after the deadline. To access the form…

I don’t like basketball. There, I said it. I said it here in Austin, where scores of other residents apparently are riveted as the Longhorns manage to hang in the NCAA tournament. For me, March Madness is truly maddening. Basketball is just not my sport, although Texas Tech’s only national championship came in 1993 thanks to the women’s basketball team. Yay, team and all, but that was a long time ago. So get this latest Big Dance over with already and on to baseball, please! Compounding my frustration with the roundball overload is that tonight’s games will disrupt my usual…

OK people. You really need to get a grip on what you’re selling on eBay. Same goes for buyers. If you, and you know who you are, weren’t paying for this crap, then the sellers would stop. The latest: Larry Summers’ half-eaten dinner roll. According to the Harvard Crimson (hat tip to TaxProf), the soon-to-be-ex university president ate half the roll on March 14 during a faculty meal with some undergraduates. One of the attending students got to the ort before the busboys and promptly listed it with the online auctioneer. Now here comes the icky part. The listing read:…

Spring sprang violently in Central Texas last night. Classic thunderstorms rolled through the area, bringing heavy rain, lots of lightning, hail and even a tornado touchdown (thankfully, without casualties) far southwest of Austin’s city limits. This is our first spring as Texas residents in many, many years. Weatherwise, now is not the best time to be in the state. Here at the southern end of Tornado Alley, you have to be on high alert March through May. We had a few violent storms come through my West Texas hometown while I was growing up. But my old stomping grounds are…

"Big Love" is getting a lot of attention. Naturally, TV critics are always looking for the next HBO breakout show to fill the void that will exist when the "Sopranos" are all whacked out. But the prurience potential of a show about a fictional polygamous family in present-day Utah is also getting a lot of mainstream coverage and prompting related "news" stories. The latest example: On this Sunday's Weekend Today Show, Lester Holt interviewed a real-life husband and wife and wife. I'm sitting there in bed waiting to see what Holt, an affable TV personality, might offer on this subject…

  Time. An artificial construct. A futile attempt by humans to control yet another immutable piece of the universe. What is a second, a minute, an hour, a year? Purely random segmentations that have no real meaning. At least that’s what I tell myself when my birthday rolls around. We have a clock that also has issues with time measurement. It’s a lovely handmade German timepiece that belonged to my grandmother. When I was young and living in the same small West Texas town as my grandparents, I was at their house often. And each time I was there, I…

This weekend, Austin’s premier annual event, the South by Southwest Festival began. So what did we do? Left town. Last year, when we returned to Texas in May and missed out on SXSW by just a few weeks, we bemoaned our bad timing. Next year, we said, we’ll hit the festival next year. Then we realized just how big this sucker is! Tens of thousands of people pile into the city for 10 days to observe, participate and enjoy the many aspects of music, film and interactive media. The 4,000 admission wristbands made available in advance for purchase by locals…

Do you want your friends, neighbors and family to know you’re a tax deadbeat? Some fear that such disclosures could soon happen, now that three private firms have been awarded federal contracts to collect tax debts. Yes, the IRS has joined the outsourcing ranks. The debt collector deals were announced Thursday afternoon. The new IRS contractors are the CBE Group Inc. of Waterloo, Iowa; Pioneer Credit Recovery, Inc. of Arcade, N.Y.; and, from right here in Austin, the heart of Texas, my new hometown, comes Linebarger Goggan Blair & Sampson, LLP. In making the announcement, IRS Commissioner Mark Everson specifically…

So you think the mortgage interest deduction helps make homeownership possible for most Americans? Think again, says Roger Lowenstein. In Sunday's (March 5) New York Times Magazine article "Who Needs the Mortgage-Interest Deduction?," Lowenstein writes: "But when exactly did the interest deduction begin? I had often heard my father rhapsodize about the G.I. Bill of Rights, which was enacted in 1944, when he was serving in the Pacific, and which a few years later was paying his tuition at law school; the mortgage-interest deduction came to be joined in my mind as an adjunct piece of social policy. One got…

The Tax Gap, that is. This is the difference between the amount of taxes that Americans owed and what they actually paid. The Internal Revenue Service says the U.S. Treasury was shortchanged $345 billion in 2001. This is the agency’s first look at the gap in 15 years. Some of the underpayments were because of honest taxpayer mistakes. Given the complexity of the tax laws (reform anyone?), that’s not a big surprise. Also not a big surprise: A chunk of the missing tax money was due to plain old tax cheating. IRS Commissioner Mark Everson, ever politic and probably painfully…

… and taxes. Granted, the world’s most romantic three words aren’t “Internal Revenue Service.” But when you look at the tax code, you’ll find that sometimes the IRS does play cupid. I know, I know. What about the marriage penalty? Well, that’s a topic that, like most things taxes, has undergone a lot of spin. As is usually the case with taxes, the penalty was primarily situational and, as discussed in this story, provided almost as many couples a benefit when they married as it hurt. But it was a nice hook — who’s for penalizing marriage in this day…

No, I’m not talking about outrunning overweight lawmen like Sheriff Buford T. Justice or Boss Hogg (OK, he wasn’t a cop, but he owned law enforcement in Hazzard County). I’m talking about being free of those incessant fat-free folks who want us all to eat cardboard so we can live longer. If I get an extra 20 years but can only eat tasteless crap during that time, what’s the point? Quality over quantity, people! Being a woman with body image issues (is that redundant?) I occasionally tried to follow the latest weight-loss trends. I’d spot a diet soda among my…

I am so happy for them! Those two kids belong together and I’m glad they finally realized it. Lance and Sheryl are calling off their split? Nick and Jessica, perhaps? No. Ken and Barbie are reunited! Just in time for Valentine’s Day. The New York Times reports that the leggy blonde has dumped interloper Blaine, the Aussie surfer, and is back in Ken’s arms. Or at least standing next to Ken, since neither his nor Barbie’s nonmalleable plastic arms allow for actual embraces. Cynics may question whether it’s true love. After all, it was Barbie who left Ken almost exactly…

Bet on it: The IRS will not collect on most of the Super Bowl wagers.

Today is the 20th national celebration of Martin Luther King, Jr., Day. …Perhaps it’s a testament to how far we’ve come that the holiday is now accepted enough to become a commercial peg. In the days leading up to the holiday, local retailers ran TV and print ads touting MLK Day sale specials. That’s not exactly the equality that Dr. King sought, but it puts his day on par with Presidents Day in February. Many cities will host events today in honor of Dr. King. And most will probably include at least a mention of his address to the crowd…

It’s Friday the 13th. I can hear Count Floyd now: “Oooohhhh. Scary.” It certainly is scary for some celebrities who are facing some potentially costly tax issues. Jury selection began this week for Richard Hatch, the first winner of CBS’s “Survivor.” The IRS contends that he didn’t pay taxes on his $1 million winnings from the popular show. But that’s not the only charge. The jury also will hear government evidence that Hatch spent money designated for a charity he created, filed false tax returns and committed bank, wire and mail fraud. What was he thinking? We first asked that…

The IRS is offering filers a MSRP for getting their taxes done.

He wanted a red coat. I don’t know his name. He didn’t say. In fact, he didn’t say a lot, probably due as much to the fact that he was the only boy in a group of four females as to his own natural temperament. I could see where it would be hard to get in a word with his grandmother and three more ebullient sisters alternately (and sometimes simultaneously) taking charge. But he did manage to tell me he wanted a red coat, not the blue one that had been picked out for him. So we found him a…