Kmart Corporation will reimburse dormancy fees charged on gift cards as part of its settlement with the FTC. The FTC filed a complaint that charges Kmart with deceptive practices in the advertising and selling of the cards.

According to the FTC, Kmart charged a dormancy fee of $2.10 for each month the card was not used after 24 months. If not used for two years, the dormancy fees would be $50.40. Kmart also advertised that the gift cards would never expire, but dormancy fees could quickly eat up the balance of a card and in the case of those with a value under $50.40, the card could become worthless in two years if not used. Kmart stopped charging dormancy fees after May 1, 2006.

The proposed settlement requires Kmart to reimburse the dormancy fees for consumers who provide an affected gift card’s number, a mailing address, and a telephone number. Kmart will publicize the refund program on its Web site, including a toll-free number, e-mail address, and a postal address for eligible consumers to contact Kmart to seek a refund.

The FTC has established a Consumer Hotline at (202) 326-3569 for consumers who have questions about the refund program. The Hotline will be updated as necessary.

According to the IRS, about 30 percent of early filers did not ask for the telephone tax refund, and almost half of those omissions were made by paid tax preparers.

“We are surprised how many tax preparers are overlooking the telephone tax refund,” IRS Commissioner Mark W. Everson said. “We want all taxpayers entitled to this refund to get it, whether they are using a tax preparer or doing the return themselves.”

The Internal Revenue Service today urged taxpayers to check to see if they qualify for the telephone excise tax refund after more than 10 million early filers did not request the one-time refund. For people requesting the telephone tax refund, it adds $30 to $60 — or even more — onto a refund.

For information and help on requesting the telephone tax refund, visit the IRS website.

Here’s a way to make good on that New Year’s resolution to save money with a little help from the IRS. This year the IRS is offering to split your refund among two or three checking or savings accounts when you use direct deposit.

If you are due a refund, simply file IRS’ Form 8888, Direct Deposit of Refund to More Than One Account, to divide your refund among two or three different accounts. You can specify how much of the refund you want sent to each account. The amount sent to any one account must be at least $1.

If you are filing a joint return, the IRS will deposit it to a joint account or one held in either filer’s name but check with your bank to make sure they will accept a joint refund deposit to an individual account.

You can still elect to have your refund deposited to a single account by filling out the direct deposit lines on your form 1040 or 1040a. You need file a separate form 8888 if you wish to split the deposit among two or three accounts.

So why not earmark part of your refund for your savings account this year? It might be a great boost to start saving in 2007.

For more information on splitting your direct deposit refund see the FAQ page at the IRS website.

The IRS estimates that 25% of taxpayers who are eligible for the Earned Income Tax Credit fail to claim it. The EITC was created in 1975 to offset the burden of Social Security taxes and to serve as a work incentive. The amount of the credit varies but it is generally determined by income and family size.

A taxpayer may be able to take the credit for tax year 2006 if the taxpayer:

* has more than one qualifying child and earns less than $36,348 ($38,348 if married filing jointly),

* has one qualifying child and earns less than $32,001 ($34,001 if married filing jointly), or

* does not have a qualifying child and earns less than $12,120 ($14,120 if married filing jointly).

To help taxpayers and tax preparers to determine eligibility for the EITC, the IRS has an interactive tool, the EITC Assistant. Basically if the EITC exceeds the amount of taxes owed, then a refund is due. You may be eligible for the Earned Income Tax Credit even if you didn’t earn enough income to be required to file a return. But if you do qualify, you will have to file to receive your refund.