Tax News Roundup

Every Saturday, we'll take a look at the top tax stories in the news.

President Bush's Tax Returns Are Made Public
President Bush made their 2005 tax return available for public inspection. According to the White House press release, the President and First Lady reported taxable income of $618,694 and paid $187,768 in federal taxes, which means they have an average tax rate of about 30%. Average tax rates can be lower or higher than the marginal tax rates. You can find your own average tax rate by dividing your total tax (Form 1040 line 63) by your taxable income (Form 1040 Line 43).

You can find copies of President Bush's tax returns at the Tax History Project.

Senator Grassley Urges IRS to Rein in Hidden Expenses in Free File Program
Senator Grassley, chairman of the Senate Finance Committee and a top tax policy advocate, has urged the IRS to review the "hidden" expenses associated with the IRS Free File program. Free File is an alliance between the IRS and software publishers to make Web-based tax preparation software available for free. Under the Free File program, companies are allowed to charge for preparing a state tax return, and each publisher can set its own eligibility requirements for free use. Many of the free versions of the tax software are slower to use because publishers add in web pages to sell upgrades to their premium software programs. My favorite factoid in all the news coverage, the Washington Post quotes an IRS exective, who reveals that "Only three IRS employees work full-time on the Free File program."

What Happened to Tax Reform?
Several newspapers are running editorials and commentary on the current state of tax reform. The Houston Chronicle reports that even IRS Commissioner Mark Everson is pushing for reform. "Congress fails in the effort to get a simple, understandable tax code," Everson is quoted as saying. President Bush is pushing for tax cuts, but no word if he supports efforts to simplify the tax code. Congress is considering bills to provide temporary relief from the Alternative Minimum Tax. It's not just political officials who want changes to the tax code. Most Americans Still Say Tax System Unjust, according an Ipsos poll.

Tax Haven Getaways 2006
Thinking of escaping to a tropic tax haven? Forbes Magazine profiles ten countries "where income taxes are low or nonexistent."

U.S. Seeks Order to End What It Calls a Tax Scheme
The federal government is trying to shut down "the No. 1 tax scheme in the country," according to the New York Times. The promoters of this scam claim that paying taxes is "voluntary," and thus you aren't "required" to pay taxes. However, voluntary does not mean optional. In fact, the IRS has listed this scam among the 12 worst tax schemes for 2006.