IRS gives flood victims 30 extra days to file taxes

Victims of the recent flooding in Minnesota and North Dakota are getting an extra month to file their taxes, the Internal Revenue Service announced today.

"Because the flooding has occurred within close proximity to April 15––the nation’s tax day and the most significant tax filing deadline of the year––taxpayers and relief workers directly impacted by the flooding will have until midnight May 15 to file and make payments associated with their 2008 individual tax returns, otherwise due April 15, without incurring late filing or payment fees and interest," the IRS said.

Obama and team flood Sunday talk shows to discuss the economy, Afghanistan

President Obama joined the Secretaries of Defense and the Treasury this morning on the Sunday talk shows to discuss the economy and the commitment of additional troops to the war in Afghanistan.

Speaking on CBS' Face the Nation the President recounted his tough conversation with the leaders of the nation's top banks.

"What I said was, look, first of all, there are a lot of bankers that are doing good work in the community, that are acting responsibly, that haven’t taken huge risks. I understand that. But understand that for the average single mom who is just barely struggling to pay her mortgage or medical bills for her kid, who is paying her taxes, who is playing by the rules, and then finds out that a taxpayer-assisted firm is paying out multimillion-dollar bonuses, that’s not just not acceptable."

The President reaffirmed his commitment to make permanent the two-year middle class tax cuts passed as part of his recent stimulus package. "I’m going to be pushing as hard as I can to get it done in this budget," he said. "If it’s not done in this budget, then I’m going to keep on pushing for it next year and the year afterwards, so that we don’t see a drop-off after the two-year tax cuts."

Over on ABC's This Week, Treasury Secretary Timothy Geithner stressed that the government's response to the crisis would not end soon. "The lesson of financial crises is governments tend to do too little," he said, "They wait too long to escalate."

On NBC's Meet the Press, the Secretary defended his decision to provide nearly $1 trillion public-private loan guarantees as a simple choice between action and prolonged economic turmoil. "We can let -- leave that as it is, hope that banks earn their way out of this over time. That would be a mistake," he said. "That would leave us with a strong -- with a deeper, longer recession."

The President also discussed his decision to commit additional troops to the war in Afghanistan, saying it was a vital step in combatting Al-Qaida.

"What we want to do is to refocus attention on Al Qaida.," he said. "We are going to root out their networks, their bases. We are going to make sure that they cannot attack U.S. citizens, U.S. soil, U.S. interests and our allies’ interests around the world."

Secretary of Defense Robert Gates agreed on Fox News Sunday that Al-Qaida remained a serious threat, saying that Administration was willing to consider alternate proposals if the troop increase proved ineffective. "I think [The President has] been clear -- and frankly, it was my view in our discussions -- that we don’t want to just pursue -- settle on this strategy and then pursue it blindly and open-endedly," he said.

Senator McCain speaking on Meet the Press endorsed the President's approach, saying: "I think this -- the outlines of this proposal are good. The best way to get out of Afghanistan fast is people to think we’re staying."

The IRS wants you

The Internal Revenue Services is looking for a few good men and women.

The tax agency everyone loves to hate put out a public invitation this morning for "civic-minded volunteers" to join the Taxpayer Advocacy Panel, which "listens to taxpayers, identifies key issues and makes recommendations for improving IRS service."

“TAP members are your friends and neighbors, walking in the shoes of the average taxpayer. A better understanding of how to serve the taxpayer well is a key to sound tax administration,” IRS Commissioner Doug Shulman said in a statement.

The requirements:

To be a member of TAP you must be a U.S. citizen, current with your tax obligations, able to commit 300 to 500 hours during the year and pass an FBI criminal background check.  New TAP members will serve a three-year term starting in December 2009. Anyone chosen as an alternate would be considered to fill any vacancies that open during the next two years.

If you're interested, visit improveirs.gov for an application or call 1-888-912-1227. You've got until April 30.

Free tax filing for some, courtesy of the IRS

On Saturday, March 21, the Internal Revenue Service will provide free tax preparation for people making $42,000 or less.

More than 250 local IRS offices will be open from 9 a.m. till 2 p.m., and more than 1,000 "community partners" will offer the same services.

"Because of the economic downturn, many financially distressed taxpayers may be in need of free services. Our Super Saturday service will make it a little easier for people to get that help. Although our Taxpayer Assistance Centers are not normally open on Saturdays, we’re trying to go the extra mile in these difficult times," Doug Shulman, IRS Commissioner, said in a statement. "Our Super Saturday service will help people get their refunds quickly. Also, if you think you owe taxes and can’t pay, please come in and talk to us about it. There are steps we can take to help."

Here's what you'll need to bring:

• Valid driver’s license or photo identification (self & spouse, if applicable)
• Social Security cards for all persons listed on the return
• Dates of birth for all persons listed on the return
• All income statements: Forms W-2, 1099, Social Security, Unemployment, or other benefits statements, self-employment records and any documents showing taxes withheld
• Dependent child care information: payee’s name, address and Social Security Number or Taxpayer Identification Number
• Proof of account at financial institution for direct debit or deposit (i.e. canceled/voided check or bank statement)
• Prior year tax return (if available)
• Any other pertinent documents or papers

Anyone, regardless of income level, can visit a "Taxpayer Assistance Center" to get questions answered or arrange a payment schedule.

Visit IRS.gov to find a location near you.

President calls for FDA reform as Republicans continue to attack the budget

Acknowledging that the Food and Drug Administration is "underfunded and understaffed," President Obama vowed in his weekly address to renew the nation's commitment to food safety.

The President decried the current patchwork of food safety regulation, much of which was enacted around the turn of the century, as outdated and ineffective. The FDA has the capacity to inspect only about 5% of the food processing plants and warehouses. "That is a hazard to public health," Obama said. "It is unacceptable."

President Obama said he approached food safety "not just as your President, but as a parent."

"When I heard peanut products were being contaminated earlier this year, I immediately thought of my 7-year old daughter, Sasha, who has peanut butter sandwiches for lunch probably three times a week. No parent should have to worry that their child is going to get sick from their lunch."

The government will direct $1 billion to modernize labs and hire additional food safety inspectors to help prevent recurrences of the spinach contamination of 2006 and the recent outbreak of salmonella at the Peanut Corporation of America.

The President announced the nomination of Dr. Margaret Hamburg as Commissioner of the FDA along with Dr. Joshua Sharfstein as Principal Deputy Commissioner. The Administration will also create a Food Safety Working Group chaired by the Secretaries of Health and Human Services and the Department of Agriculture and other senior officials to recommend upgrades to our food safety laws.

Consumers Union has called for the Food and Drug Administration to inspect all food processing facilities at least once per year. CU strongly believes that the best way to safeguard our food supply is to unify the government's food safety functions under a single agency.

Meanwhile, the Senate's top Republican tax writer, Chuck Grassley of Iowa, used the Republican weekly address to deliver a scathing attack on the Administration's tax plans.

"[The President's] plans fail to recognize that Americans are not an endless source of tax dollars to pay for government spending," Grassley said, arguing that raising taxes on Americans making more than $250,000 would be devastating for small businesses.

"Tell these business owners their taxes will go up. Odds are, they'll cut spending. They'll cancel orders for new equipment, cut health insurance for their employees, stop hiring, and lay people off.

Grassley said that, if enacted, the President's budget would amount to the "biggest tax increase in history."

"Americans need leadership, and they need confidence now," Grassley continued. "They need their President and their elected representatives to connect all the dots. Jobs are hard-won. The government should first, do no harm."

The taxman cometh ... with statistics

As we all pull together our tax information for this year, the IRS has released facts and figures for last year's filings.

We handed over a total of $2,745,035,410,000 in Fiscal Year 2008, according to the Internal Revenue Service Data Book.

The IRS gave a little more than .5 percent of that--$428,838,202,000--back in refunds.

The government ended up with $2,316,197,206,000.

Spelled out, that's two trillion three hundred sixteen billion one hundred ninety-seven million two hundred six thousand dollars.

Where did all that money come from?

Almost 46 percent was from individual income taxes, according to the IRS numbers. Corporations chipped in another 13 percent, with excise taxes making up about 2 percent.

Estate and gift taxes were the smallest part of the pie at 1.2 percent.

The IRS says it processed more than 250 million returns, More than 101 million returns, including 58 percent of individual income tax returns, were filed electronically.

If you're intimidated by all those numbers (or by taxes in general), Consumer Reports has resources to help you file your taxes.

IRS still wants your tax money, but won't outsource collection duties

The Internal Revenue Service is ending it's contracts with private debt collection companies and will hire as many as 1,000 federal workers to collect delinquent taxes, the agency announced today.

"I believe this work is best done by IRS employees, and I believe we have strong support from the Administration and the Congress for increased IRS enforcement resources going forward," IRS Commissioner Doug Shulman said in a statement, citing a study that showed it was more cost-effective for the IRS to do its own collections work.

The agency head also said that IRS personnel could do the job better than outside contractors because they have "more flexibility handling cases."

"In these challenging economic times, I have asked all IRS employees to go the extra mile to help financially distressed taxpayers," Shulman said. "IRS employees have more options available to them to resolve difficult collection cases."

The IRS hired outside companies to assist in collecting delinquent taxes in 2006 after Congress passed voted to permit the practice in 2004. The current one-year contracts expire today, according to the IRS.

Some Republicans have fought to keep the private companies involved in IRS debt collection, arguing that it creates jobs.

"It's hard to believe that after worrying so much about keeping people employed, the administration has chosen this route," Sen. Chuck Grassley said in statement.

Some Democrats, the National Treasury Employees Union, and consumer groups have argued that federal workers can do the job for less money and will cut down on abusive collection tactics.

"This result, a long time coming in the face of growing opposition to the program, is not only a good decision by the IRS, it is the right decision," the union's president, Colleen Kelley, said in a statement. "It reaffirms what NTEU has said repeatedly—that given the tools and resources, no one can perform the work of the federal government better than federal employees. This is an important vote of confidence for IRS employees."

Some Republicans have fought to keep the private companies involved in IRS debt collection, arguing that it creates jobs.

"It's hard to believe that after worrying so much about keeping people employed, the administration has chosen this route," Sen. Chuck Grassley said in statement.

Some Democrats, the National Treasury Employees Union, and consumer groups have argued that federal workers can do the job for less money and will cut down on abusive collection tactics.

"This result, a long time coming in the face of growing opposition to the program, is not only a good decision by the IRS, it is the right decision," the union's president, Colleen Kelley, said in a statement. "It reaffirms what NTEU has said repeatedly—that given the tools and resources, no one can perform the work of the federal government better than federal employees. This is an important vote of confidence for IRS employees."