The IRS has expanded its Free File program this year. Taxpayers with an AGI (adjusted gross income) of $52,000 or less are eligible to e-file their tax returns for free.

That means that 70% (95 million) of all taxpayers will be eligible to file 2006 tax returns for no fee through one of the private sector tax software companies who are part of the Free File Alliance, LLC.

Free File for 2006:

* Free File is a free service offered by companies for taxpayers with an Adjusted Gross Income (AGI) of $52,000 or less.

* Before selecting a company link, review the tax software company’s criteria to confirm that you meet their eligibility for preparing and e-filing your federal return for free.

* Fees for state tax returns may apply. Some companies offer free state tax return preparation and e-filing. Check company websites for more details.

* Some companies offer extensions for free.

* Some companies offer free e-filing of the Form 1040EZ-T, Telephone Excise Tax Refund, for those who want to claim the refund credit and are not required to file a federal income tax return.

* You are under no obligation to buy any of the company’s other products or services.

To use the service, go to: Free File: Getting Started

No one likes paying taxes but some people will go to extreme lengths to avoid them, people like Ed Brown who has barricaded himself in his Plainfield, NH home after being convicted of tax evasion.

Brown is one of a large group of Americans who hold to the belief that income tax is unconstitutional and there is no law that requires citizens to file tax forms and pay taxes to the federal government.

Often cited by these anti-tax groups is their contention that the 16th amendment to the constitution was never properly ratified. Because not all the ratifying states used the exact same language or punctuation, the wording of the amendment ratified by most of the states differed from the original, with only four states ratifying the exact text proposed by Congress. Another argument made by some tax protesters is that because Congress did not pass an official proclamation recognizing Ohio’s year 1803 admission to statehood until 1953, Ohio was not a state until 1953 and therefore the Sixteenth Amendment was not properly ratified. Both of these arguments have been repeatedly rejected by the courts.

But Ed Brown still firmly believes that the government collects taxes illegally and refuses to comply with IRS regulations or recognize their authority. Brown, a former militia man who quotes the state’s motto “Live Free or Die”, plans to wait it out at his home which is equipped with generators, internet access and stocked with food. His home is also stocked with armed supporters, ready for US marshalls to descend.

The Sixteenth Amendment:
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

Fox News

KQED: You Decide Federal Taxes

If you plan to file for deductions for state sales taxes, college tuition and classroom supplies you may have to wait. The 2006 IRS tax forms don’t have lines for those deductions.

The 109th Congress extended those deductions at the last minute but they were not in time to make it into the tax forms printed up by the IRS.

To claim these deductions, go to the IRS website for instructions. If you e-file, the IRS says the online forms should all be updated to include these deductions. However, the IRS doesn’t plan on processing forms claiming those deductions until after Feb 3, so there’s no rush to file yet.

170,000 residents of the state of Wisconsin are being notified that their tax forms were mailed out with their social security numbers visible on the front.

State officials are now in a mad scramble to try to get as many of the forms back as possible before they are delivered to mailboxes.

The “computer error” leaves many residents open to possible identity theft as officials fear the numbers could be lifted from the forms by identity thieves who could then use the social security numbers to set up credit accounts.

Often victims of identity theft don’t know about these new accounts until they start to receive bills on the accounts opened by the thieves.

Beause it’s an extended weekend with the national day of mourning for President Ford following New Year’s Day, officials hope to recover any forms before they are processed through the post office.