Tax

I’m a sucker for financial calculators -- you know, those little widgets that help you find out how much you’ll pay monthly on your 30-year mortgage, how long it’ll take to pay off your student loans, or what you can save when you switch your balances to a new credit card.So it was with some interest that I came across a little application last week, courtesy of journalist Kay Bell’s “Don’t Mess with Taxes” blog (http://dontmesswithtaxes.typepad.com), that allows users to calculate what their income tax liability would have been under the original Form 1040 -- issued in1913. (The calculator can be accessed directly at http://politicalcalculations.blogspot.com/2007/04/income-tax-original-form-1040.html).

Liberty Tax Service reported a 20 percent increase in the number of tax returns prepared at its franchises for the 2007 fiscal year.

According to Vertex Inc.’s annual Sales Tax Rate Report, the average number of U.S. sales tax rate changes per year has grown by 28 percent since the late 1990s.Based on a comparison of the number of state, county, city and district sales tax rate changes during the six-year periods between 1995 and 2000, and 2001 and 2006, the study found that the average number of rate changes per year was 610 and 779, respectively. According to the report, the number of rate changes decreased for the earlier period, while the number of yearly rate changes fluctuated for the later period.

At first glance, the recent testimony of Treasury Secretary Henry Paulson, Jr. before the Senate Finance Committee on ways to reduce the tax gap was fairly typical, in that he urged Congress to approve the Presidential-submitted budget with increased IRS funding, and to pass 16 legislative proposals aimed at narrowing the tax gap.

The leaders of the Senate Finance and the House Ways and Means Committees have reached agreement on a tax package aimed at providing nearly $5 billion in tax relief for small businesses.

A Greenwich, Conn., investment banker was convicted on charges of evading millions of dollars of taxes, according to the U.S. Attorney for the Southern District of New York.A jury found Richard Josephberg guilty on a total of 21 charges, including three counts of tax evasion, four counts of failure to file tax returns, five counts of failure to pay taxes, two counts of subscribing to false tax returns, and single counts of conspiracy to defraud, health care fraud and obstructing the due administration of the Internal Revenue Service.

The Senate Finance Committee didn’t get the answers it was hoping for during a hearing this week with Treasury Department representatives on how to reduce the tax gap.In testimony before the committee, Treasury Secretary Henry Paulson said that Congress should focus its efforts on reducing the complexity of the tax code, as well as approving the entire budget request from the Internal Revenue Service and enacting the Treasury’s February legislative proposals that are backed by President Bush. Paulson said that in developing more than a dozen proposals to minimize the gap, the Treasury focused on changes that would come with minimal additional burdens.

Taxpayers frustrated by delays in Intuit Inc.’s tax-processing capabilities will have until midnight on April 19 to electronically file their returns.The Internal Revenue Service and Intuit said that as many as several hundred thousand last-minute tax filers were affected by Intuit’s server problems Tuesday night -- meaning that they, or their accountants, may have been unable to electronically file returns.

The Internal Revenue Service will grant a six-month tax filing and payment extension to those affected by the shootings at Virginia Tech.The relief applies to the victims, their families and emergency responders, as well as university students and employees.

The Brookings Institution has issued a new report, “A Local Ladder for Low-Income Workers: Recent Trends in the Earned Income Tax Credit.”Prepared by research analyst Elizabeth Kneebone, the report contains an analysis of Internal Revenue Service data on low-income working families who received the federal EITC for the 2000 and 2004 tax years. Among the report’s findings: