Available this spring in Texas, Arkansas, Louisiana and Oklahoma followed by the rest of the country this summer, Social Security recipients will have a new way to receive benefits; debit cards.

The debit cards are targeted to the 4 million Social Security recipients who have no bank accounts.

Social Security recipients electing to sign up for the debit program will receive a MasterCard debit card, which will be reloaded each month with benefit payments and secured with a personal identification number. The cards can be used at ATMs to withdraw cash and at retailers for purchases and to get cash back.

Certain usage fees are attached to the debit cards. Paper account statements will cost 75 cents; online bill-paying service will be 50 cents per bill. The first ATM withdrawal each month will be free; additional withdrawals will cost 90 cents and some ATMs may assess their own usage fees. International ATM withdrawals will have additional fees.

Debit cards will carry some protection if lost or stolen; however, a consumer's maximum liability depends on how quickly a loss is reported by the Social Security recipient.

Housing prices may drop sharply this spring, as long-suffering sellers in hard-hit areas throw in the towel and slash their asking price.

That could spell opportunity for this year's buyers. But what if you already own a home and have no desire to become a landlord? Here are three ways to play today's battered housing market.

Trade up. If you desire a larger home or a house in a better neighborhood, this could be your chance to trade up on the cheap.

Your new home will probably mean not only a bigger mortgage, but also higher on-going costs, including homeowner's insurance, property taxes and maintenance expenses. These ongoing costs will offset a large chunk of any future home-price appreciations.

In other words, trading up to a larger home or a better neighborhood is really about wanting to consume more real estate. Still, like any thrifty shopper, you want to buy when there is a sale and this is what today's market offers.

Doubling down. Instead of trading up, you might be eyeing a vacation home. If you do not plan to rent the place out, the same logic applies: Once you subtract the annual costs from the price appreciation, you likely will not make very much money which means the property will not be much of an investment.

On the other hand, maybe you are two or three years from retirement and are toying with buying a second home that could become your sole residence once you quit the work force. Does it make sense to purchase now, given the decline in home prices?

Helping hand. While buying more real estate for your own use probably will not be a great investment, you could help your adult children make good money by transforming them from renters to homeowners.

To that end, you might give your children an advance on their eventual inheritance, so they have enough money to make a down payment.

If you have kids who are first-time buyers in markets that are relatively depressed, this could be a good time. These days, they may need to make a 10% down payment. You could make a gift to them of the down payment or make a loan to them.

Growing numbers of victims are complaining to the IRS and the Federal Trade Commission about this and similar scams.

In one recent case in Pensacola, Florida, Holly M. Barnes, a former Girl Scout troop leader, was sentenced to 10 years in federal prison after pleading guilty to multiple counts of identity theft and filing "false and fictitious" claims for tax refunds. Ms. Barnes created a bogus Girl Scout medical-release form to get sensitive information including children's Social Security numbers. She then used the information to prepare and file electronic federal income tax returns.

The phony refunds were transferred into five different bank accounts she controlled. She filed false claims totaling more than $187,000, from which she obtained more than $87,000 from the government as a result of fraudulently using the identity of these children, including her own children.

Separately, a Connecticut woman was recently notified by a New York bank that her application for a refund anticipation loan had been rejected. She had not applied for such a loan and had not even prepared her tax return for 2007. She also recently received a letter from the New York state tax department questioning her 2007 return which she had not filed.

Refund fraud is not the only type of tax related identity theft. In other cases, the thief uses a stolen Social Security number to get a job in the U.S. In a typical case, that person's employer later files a Form W-2 reflecting the wages, and IRS data systems attribute those wages to the rightful owner of that Social Security number. Victims discover the problem after getting a startling notice from the IRS asking about unreported income.

The Internal Revenue Services cautions taxpayers to make every effort to protect the confidentiality of their key personal information, especially their Social Security numbers. Be careful to safeguard the privacy of sensitive personal data you store on your computer or your PDA. When choosing your password, do not use the word "password" or your birthday. Check your credit reports regularly to see if anything looks odd or suspicious.

The Internal Revenue Service is warning taxpayers to beware of several current e-mail and telephone scams that use the IRS name as a lure. The IRS expects such scams to continue beyond the tax filing season.

The IRS cautioned taxpayers to be on the lookout for scams involving advance payment checks of the stimulus package.

The goal of the scams is to trick people into revealing personal and financial information, such as Social Security, bank account or credit card numbers, which the scammers can use to commit identity theft.

Typically, identity thieves use a victim's personal and financial data to empty the victim's financial accounts, run up charges on the victim's existing credit cards, or apply for new loans, credit cards, services or benefits in the victim's name, file fraudulent tax returns or even commit crimes. Most of these fraudulent activities can be committed electronically from a remote location, including overseas. Committing these activities in cyberspace allows scamsters to act quickly and cover their tracks before the victim becomes aware of the theft.

People whose identities have been stolen can spend months or years and their hardearned money cleaning up the mess thieves have made of their reputations and credit records. In the meantime, victims may lose job opportunities, may be refused loans, education, housing or cars, or even get arrested for crimes they did not commit.

Rebate Phone Calls -This phone call is a scam. The IRS does not force taxpayers to use direct deposit.

Refund e-Mail -In a new wrinkle, the current version of the refund scam includes two paragraphs that appear to be directed toward tax-exempt organizations that distribute funds to other organizations or individuals. The e-mail contains the name and supposed signature of the Director of the IRS's Exempt Organizations business division. Filing a tax return is the only way to apply for a tax refund; there is no separate application form.

Audit e-Mail -Unusual for a scam email, it may contain a salutation in the body addressed to the specific recipient byname. Most scam e-mails seen by the IRS are sent using the same technique used by stammers, in which hundreds of thousands of messages are sent to potential victims based on internet address. Because of the volume, the typical scam e-mail is not personalized. This e-mail instructs the recipient to click on links to complete forms with personal and account information, which the scammers will use to commit identity theft. This e-mail is a phony. The IRS does not send unsolicited, tax account related e-mails to taxpayers.

Paper Check Phone Call -In a current telephone scam, a caller claims to be an IRS employee who is calling because the IRS sent a check to the individual being called. The caller states that because the check has not been cashed, the IRS wants to verify the individual's bank account number. The caller may have a foreign accent. The IRS does not contact taxpayers to verify financial information.

Taxpayers who have received a questionable e-mail claiming to come from the IRS may forward it to a mailbox the IRS has established to receive such e-mails.phishing@irs.gov.

Internal Revenue Code §7803(c)(2)(B) (ii(III) requires the National Taxpayer Advocate to describe at least 20 of the most serious problems encountered by taxpayers. This year's report describes 26 problems and provides status updates on three other issues: the IRS's Private Debt Collection, PDC, initiative, its collection strategy, and its Questionable Refund Program, QRP. Each of the most serious problems includes the National Taxpayer Advocate's description of the problem, the IRS's response, and the National Taxpayer Advocate's final comments and recommendations. This format provides a clear picture of which steps have been taken to address the most serious problems and which additional steps the National Taxpayer Advocate believes are required.

The issues described in the report are as follows:

2. Tax consequences of cancellation of debt

3. The cash economy

4. User Fees: Taxpayer service for sale

5. The use and disclosure of tax return information by prepares to facilitate the marketing of refund anticipation loans and other products with high abuse potential

6. Identity theft procedures

7. Mortgage verification

8. Transparency of the Office of Professional Responsibility

9. Preparer penalties and bypass of taxpayers' representatives

10. Taxpayer service and behavioral research

11. Service at taxpayer assistance centers

12. Outreach and education on disability issues for small business/self-employed taxpayers

13. Exempt Organization Outreach and Education

14. Determination Letter Process

15. EITC examinations and the impact of taxpayer representation

16. Nonfiler program

17. Automated under reporter program

18. The accuracy-related penalty to the automated under reporter units

19. Audit reconsideration

20. Audits of S corporations

21. Federal Payment Levy Program, FPLP Levies on Social Security Benefits

22. Third party payers

23. Employment tax treatment of home care service recipients

24. Offers in compromise

25. Inadequate training and communication regarding effective tax administration offers.

26. Assessment and processing of the trust fund recovery penalty, TFRP

27. Private debt collection

28. IRS collection strategy

29. Questionable refund program

2. Measure to address noncompliance in the cash economy:

Increase use of the IRS’s electronic payment system for estimated tax payments, Authorize voluntary withholding agreements,

Eliminate the corporate exception to information reporting for small corporations if the IRS’s National Research Program shows Significant noncompliance, Accelerate the taxpayer identification number validation process, Provide for withholding on payments to noncompliant contractors, Require information reporting by financial institutions on credit and other “payment card” receipts, and Require financial institutions to report all accounts to the IRS by eliminating the $10 minimum on interest reporting.

3. Home"office business deduction:

Congress should amend IRC §280A to create an optional standard home office deduction.

4. Eliminate tax strategy patents:

5. Extend exempt organizations' advance ruling periods in cases of extreme application processing delays:

The NTA recommends that Congress provide for the extension of the advance ruling period by one year when, as a result of a delay of 270 days or more in the processing of an exemption application, an advance ruling letter is issued not more than eight months prior to the end of the advance ruling period.

6. Legislative recommendations to reduce the compliance burden on small exempt organizations:

The NTA recommends that Congress lessen the burden on small exempt organizations:

7. Taxpayer protection from third party payer failures:

The NTA recommends that Congress amend the Code to define a third party payer; make a third party payer jointly and severally liable for the amount of tax collected from client employers but not paid over to the Treasury plus applicable interest and penalties.

Additional legislative recommendations:

1. Expand definition of taxpayer identification number to include Internal Revenue Service numbers:

The NTA recommends that Congress require a taxpayer to provide a valid TIN or IRSN in order to claim an exemption and the EITC. This recommendation would enable an identity theft victim who files a tax return using an IRSN to claim an exemption or the EITC.

2. Authorize Treasury to issue guidance specific to IRC §6713 regarding the use and disclosure of tax return information by preparers:

The NTA believes taxpayer protections would be stronger if the Treasury is given the flexibility to promulgate regulations applicable only to the civil penalty without concern that the criminal penalty would also apply.

In addition to the recommendations in the NTA 2006 Annual Report to Congress an additional proposal is offered that taxpayers may raise relief under any provision of Title 26 or any case under title 11 of the United States Code.

4. Referrals to low income taxpayer clinics: The NTA recommends amending IRC §7526(c) to add a special rule stating that notwithstanding any other provision of law, IRS employees may refer taxpayers to LITCs receiving funding under this section.

5. Consent-based disclosures of tax return information under IRC Section 6103(c): The NTA recommends that §6103(c) be amended to limit the disclosure of tax returns and tax return information requested through taxpayer consent solely to the extent necessary to achieve the purpose for which consent was requested.

6. Home care service workers: The NTA recommends that Congress amend §3121(d)(3) to provide that a HCSW is the statutory employee of the administrator of the HCSW funding.

The Internal Revenue Service has released the 2007 IRS Data Book, which is an annual snapshot of IRS activities for a

Given fiscal year.

The report describes activities of the IRS from October 1, 2006, to September 30, 2007, and includes information about returns filed, tax collections, enforcement, taxpayer assistance, as well as the IRS budget and workforce.

During fiscal year 2007, the IRS collected almost $2.4 trillion in taxes, net of refunds, and processed more than 235 million returns. More than 114 million individual income tax return filers received tax refunds that totaled $248.6 billion. In fiscal year 2007, IRS spent an average of 40 cents to collect each $100 of tax revenue, which was the lowest in seven years and down from 42 cents per $100 in fiscal year 2006.

IRS examined nearly 1.4 million individual income tax returns in fiscal year 2007. IRS personnel answered more than 33.2 million toll-free calls from taxpayers during the fiscal year, and the IRS web site received about 215 million visits.

An electronic version of the 2007 IRS Data Book can be found on the Tax Stats page of www.irs.gov.

The Internal Revenue Service has issued its 2008 list of the 12 most egregious tax schemes and scams, highlighted by Internet phishing scams and several frivolous tax arguments.

Topping this year's list of scams is phishing, which encompasses numerous Internet-based ploys to steal financial information from taxpayers. New to the "Dirty Dozen" this year is a scheme, which IRS auditors discovered, that relates to unreasonable and/or excessive fuel tax credit claims.

Tax schemes can lead to problems for both scam artists and taxpayers. Tax return preparers and promoters also risk significant penalties, interest and possible criminal prosecution.

2. Scams related to the economic stimulus payment,

3. Frivolous arguments,

4. Fuel Tax credit scams,

5. Hiding income offshore,

6. Abusive retirement plans,

7. Zero Wages,

8. False claims for refund and requests for abatement,

9. Return preparer fraud,

10. Disguised corporate ownership,

11. Misuse of trusts,

12. Abuse of charitable organizations and deductions.

IRS Seeks New Issues for the Industry Issue Resolution Program

The Internal Revenue Service is encouraging business taxpayers, associations and other interested parties to submit to the Industry Issue Resolution (IIR) Program tax issues for resolution involving a controversy, a dispute or an unnecessary burden on taxpayers.

The objective of the IIR program is to resolve business tax issues common to Significant numbers of taxpayers through new and improved guidance. In past years, issues have been submitted by associations and others representing both small and large business taxpayers, resulting in tax guidance that has affected thousands of taxpayers.

Recent submissions accepted into the IIR program include:

Automobile Last In, First Out (LIFO) -for auto wholesalers, manufacturers and dealers regarding the proper treatment of the dollar-value, LIFO inventory method for pooling purposes of crossover vehicles, which have characteristics of trucks and cars.

Clarification regarding circumstances when facsimile signatures may be used to sign employment tax forms.

Explanation of the circumstances under which insurance companies that make incentive payments to health care providers will be permitted to include those payments in unpaid losses. The revenue procedure also provides procedures under which a taxpayer may obtain automatic consent of the Commissioner to change their accounting method for such payments.

For each issue selected, an IIR team of IRS and Treasury personnel gather relevant facts from taxpayers or other interested parties affected by the issue. The goal is to recommend guidance to resolve the issue. This benefits both taxpayers and the IRS by saving time and expense that would otherwise be expended on resolving the issue through examinations.

The Internal Revenue Service has released the winter 2008 issue of the Statistics of Income Bulletin, featuring data from 134.4 million individual income tax returns filed for tax year 2005. Of those returns, 90.6 million were "taxable:' This means that they reported total income tax greater than zero. The number of taxable returns in tax year 2005 was up 1.7 percent from 2004.

Adjusted gross income on these 90.6 million returns totaled $6.857 trillion, an increase of 9.4 percent from 2004. Total income tax on these returns totaled $935 billion, up 12.4 percent from 2004. The average tax rate for taxable returns was 13.6 percent in tax year 2005, which was up 0.4 percentage points from 2004.

Taxpayers in the top 1 percent of adjusted gross income reported adjusted gross income of at least $364,657 in tax year 2005. This group accounted for 21.2 percent of all adjusted gross income reported, which was up 2.2 percent from the prior year. This group also accounted for 39.4 percent of total income tax reported, which was up 2.5 percent from 2004.

Taxpayers in the top 5 percent of adjusted gross income reported adjusted gross income of at least $145,283. This group accounted for 35.7 percent of all adjusted gross income reported and 59.7 percent of total income tax.

The Internal Revenue Service has announced the launch of a Simple electronic filing system that small tax-exempt organizations may use to comply with a new law requiring them to file an annual return.

In the past, small tax-exempt organizations generally were not required to file Forms 990 or 990-EZ, the annual information returns for tax-exempt organizations. But the Pension Protection Act of 2006 requires that tax-exempt organizations that normally have annual gross receipts of $25,000 or less must file an electronic Form 990-N, "Electronic Notice (e-Postcard) for Tax-Exempt Organizations not Required to File Form 990 or 990-EZ:' for tax years beginning in 2007.

Filing the e-Postcard is free and easy. To file, small tax-exempt organizations will need only a few basic pieces of information: the organization's employer identification number, its tax year, legal name and mailing address, any other names used, an Internet address if one exists, the name and address of a principal officer and a statement confirming the organizations annual gross receipts are normally $25,000 or less.

The due date for filing Form 990-N is the 15^th day of the fifth month after the close of the tax year. This means, for example, that an organization whose most recent tax year ended on December 31, 2007, must file Form 990-N by May 15, 2008. The new law provides that organizations that do not file Form 990-N for three consecutive yeas will lose their tax-exempt status.

After reviewing the fourth quarter 2007 sales of American Honda Motor Company, Inc., the Internal Revenue Service announced that purchasers of qualifying Honda vehicles may continue to claim the Alternative Motor Vehicle Credit. Given the number of vehicles sold, the phase out period for Honda vehicles began on January 1, 2008.

Taxpayers may claim the full amount of the credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th qualified vehicle. For the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim 50 percent of the credit. For the fourth and fifth calendar quarters, taxpayers may claim 25 percent of the credit. No credit is allowed after the fifth quarter.

The 2008 per diem amounts for accounting for meal expenses for day care providers have been made available.

If the provider is receiving a reimbursement under the Child and Adult Care Food Program of the Department of Agriculture (CACFPP) or any other program, the amount allowed as a deduction is the per diem rate less the reimbursement. A family day care provider can use these rates for up to one breakfast, one lunch, one dinner, and three snacks per eligible child per day.

The rates are equal to the Tier 1 reimbursement rates of the CACFP for meals served in day care homes. They are adjusted each year and can be accessed at www.usda.gov under Child and Adult Food Care Program.

The rates include beverages, but not nonfood supplies such as containers, paper products, or utensils.

The provider can choose to use either the actual expenses or the per diem method, but must use the chosen method for the entire tax year. Each year is a separate choice.

The provider must keep records to substantiate their computation of the meals provided. These records should reflect the name of the applicable child, the dates and hours of attendance in the provider's day care, and the type and quantity of meals and snacks served. The IRS in Revenue Procedure 2003-22 has provided a sample log which can be used for this purpose. The amounts allowed for 2008 are:

Internal Revenue Code Section 280F relating to listed property provides ceilings on the amount of depreciation and §179 deductions that can be claimed on passenger automobiles, light duty trucks and vans.

The business use of the taxpayer determines the limitation on the deduction. For 100% business use vehicles the limitations for 2008 are as follows:

The §280F limits for passenger automobiles first placed in service during the calendar year of 2008 that are neither trucks nor vans:

Year One $2,960* Additional if bonus claimed.

Year Two $4,800

Year Three $2,850

Year Four (after) $2,850

Limitations for trucks and vans:

Year One $3,160*Additional if bonus claimed.

Year Two $5,100

Year Three $3,050

Year Four (after) $1,875

Tables for additional passenger automobiles and light duty trucks and vans can be found in Revenue Procedure 2008-22 on www.irs.gov.

There are no clear, authoritative guidance regarding vacation properties and their eligibility for IRC 1031 exchanges. There is a "gray" area of the tax law and that taxpayers should proceed at their own risk, and there were no guarantees that the IRS would rule favorably on these 1031 exchanges.

In Barry E. Moore and Deborah E. Moore v. Commissioner (TC Memo. 2007-134, May 30, 2007), the court ruled the taxpayers were not entitled to exclude the gain from the sale of the first home under IRC 1031 because the properties were not held primarily for use in a "trade or business" or for "investment': Even though the taxpayers argued they held the property with the "expectation" the value would increase, the Court ruled this was insufficient to qualify the transaction for gain exclusion under IRC 1031. The facts of this case were that the taxpayers and their children used the property as a lakeside vacation home, did not rent it and did not claim depreciation or any investment expenses.

The IRS has created a new safe harbor for like-kind exchanges of vacation homes with Rev. Proe. 2008-16. If the taxpayer falls within these safe harbor rules, the "Service" will not challenge whether a property qualifies for 1031 exchange treatment.

The safe harbor criteria addresses both relinquished and replacement property. Both properties will qualify as "held for productive use in a trade or business" or "investment" if each property (dwelling unit) is owned by the taxpayer for at least 24 months immediately before the exchange, and the other for at least 24 months after the exchange, and within this time frame, in each of the two 12 month periods immediately before and after the exchange:

The taxpayer rents the dwelling unit to another person(s) at fair rental value for 14 days or more; and

The taxpayer's personal use does not exceed the greater of 14 days or 10 percent of the days rented during each of the two 12 month periods.

The safe harbor rules define a dwelling unit as real property improved with a house, apartment, condominium, or similar improvement that includes sleeping space, bathrooms and cooking facilities.

The Rev. Proe. also points out that the taxpayer must satisfy all other requirements of §1031 and the regulations thereunder. The effective date is for exchanges occurring after March 10,2008.

To believe the surveys, half the world is either already an expat, or planning to become one. Tens of millions of people work abroad, or have retired there, or have property in a foreign country.

Once upon a time, perhaps in the days of the British Raj, expatriates had a financially golden life style in recompense for the perceived horrors of a foreign posting involving endless travel, unpleasant nsects and unpronounceable but deadly diseases.

Once you had shaken the dust of London or Paris or Philadelphia from your feet, you could forget all about tax inspectors and set about hiring an extensive staff of punkah-wallahs and major-domos to run your immense colonial villa while you drank gin and tonic on the verandah, against malaria, of course.

After your 30 years in the sunshine, with wrinkled skin and full pockets, you could retire to a small country house in the Home Counties, New England or Normandy, to swap travelers' tales with your neighbors.

The reality nowadays is both more mundane and more challenging. Overcrowded airports, intrusive tax inspectors, the Internet and hyperactive investment advisers are just some of the features that are combining to form a new and very different landscape for expats.

But at least today’s expat is not short of advice from banks which offer international financial services.

This project aims to gather these view points and capture them on an unprecedented scale. As well as giving voice to the expat population, the study will provide new insight on their needs.

Indeed the worldwide web has revolutionized expats' everyday lives with 70% now logging on daily and over one in four switching on every hour.

The vast majority of expats now have broadband access with almost half of those surveyed owning webcams and one in three opting for cheaper international calls via Voice Over Internet Protocol technology.

Internet has revolutionized the lives of expats, enabling them to go about their daily lives at the click of a button, anytime of the day helping them to stay in touch, do their shopping and manage their finances. Whether it is making purchases or transferring money from accounts, it is even more important that expats take the same precautions with their safety online as they do offline.

One third of expatriates move overseas to land the jobs they want and the expatriate community is becoming more diverse than ever. Almost 40% are relocating to destinations such as the Middle East, Australia and the USA to further their careers. More recently, expatriate communities as far away as Africa, Singapore, Thailand and Russia have been growing.

Oil paintings, old cars or Elvis's guns: Whatever you collect is a tax bill waiting to happen.

Capital gains, estate and gift taxes may all come into play depending on whether you decide to sell off parts of the collection or bequeath it to an heir.

Experts advise that you start by deciding your tax status; collector, investor or dealer. Tax rules recognize these three designations, and deductions are handled differently for each under the Internal Revenue Code.

For the average person, the big distinction is between collector and investor. Collectors cannot take a deduction for keeping up a collection because expenses are considered personal under Section 262 of the code. Investors, however, may deduct costs as expenses incurred in the production of income under Section 212.

Once you have established your tax status, give some thought to what you are planning to do with the collectibles in the long run. If you sell them, you will pay a special 28% capital gains tax, nearly double the current 15% rate for long-term capital gains on other investments.

Another option is to swap one collectible for another. A strategy called a "like-kind exchange" can allow you to defer capitalgains tax. Such exchanges, often used with real estate, can also be used on stamps, coins, gems and other collectibles.

Estate-tax planning is complicated, especially right now, because a 2001 law phased in a series of complex changes. This year, a tax of as much as 45% will be levied on estates worth more than $2 million. In 2009, the threshold will rise to $3.5 million. In 2010, the tax will be lifted completely for a year, but reinstated at a lower threshold in 2011.

The estate-tax return is due nine months after death. A shortage of cash may force a sale of the collectibles to pay the estate tax.

The U.S. Supreme Court has unanimously upheld the right of workers to sue over losses in their 401(k) retirement-savings accounts in some circumstances, but pension-law experts said a minority opinion in the case could also holster some defenses used by employers.

The ruling could affect dozens of retirement-plan lawsuits brought by workers against their employers. Retiree advocates praised the decision.

Employers may find a solace in a minority opinion by Chief Justice John Roberts, which while concurring with the majority, appeared to offer companies a roadmap for combating similar cases in the future.

Employers, or whoever they appoint in their stead, have an established obligation to run retirement plans as "prudent experts" on behalf of participants. Failure to do so can invite litigation. Recent cases have included allegations that employers offered participants unwise investment choices, or allowed investment managers to charge participants unreasonably high fees.

At issue in the case coming before the Supreme Court was whether federal pension law, which allows lawsuits on behalf of a group of employees, also allows an individual to sue over losses in his own account in a 401 (k) or similar plan.

When Barry Bonds stood up in federal court in San Francisco last November to plead not guilty to charges of perjury and obstruction of justice, Jeff Novitzky was sitting in the front row.

Novitzky was in the first row again on January 11 in United States District Court in White Plains, New York, where Marion Jones was sentenced to six months in prison for lying to federal agents.

And there he was again in February 2008 in San Francisco, the tall bald man wearing a dark suit in the front row of the courtroom, while Kirk Radomski, the confessed steroids dealer to dozens of major league ballplayers, was sentenced to probation in a plea bargain.

Now Novitzky, a special agent for the Internal Revenue Service, has come to the nation's capital.

Novitzky, who has led a five-and-a-half year investigation into steroids in professional sports, attended the hearing of the House Committee on Oversight and Government Reform, relating to the testimony of Roger Clemens about whether he ever used performance-enhancing drugs.

Novitzky did not testify, but he was to be in the hearing room, listening carefully, according to a lawyer familiar with the matter.

If Clemens is not telling the truth or at least if the Department of Justice or the chairman of the committee, Henry A. Wax man, Democrat of California, decides he is not telling the truth, he can be referred and investigated for lying to Congressional officials.

Novitzky and the federal prosecutors in California have not been squeamish about going after famous athletes. They have been patient, too. Bonds and Jones were not charged until almost five years after making their statements.

The Department of Justice assigned an IRS agent to steroids cases because they often involve money laundering.

Let's say you put $10,000 in your 401(k) and invest in a stock-index fund that earns an average of 8% a year. After 20 years it will be worth $46,610. Withdraw the money all at once and you will pay $13,051 in taxes, assuming you are in the 28% bracket, leaving you $33,559 to spend.

But what if instead you had bought that tax-efficient stock fund outside your plan? Would not your tax bill be lower? Yes, but that is the wrong way to look at it. If you skip your 401(k) in favor of a taxable account, you must first shell out taxes on that $10,000, which leaves you with just $7,200 to invest (assuming the same 28% bracket). Plus, over the next 20 years, you will have taxes on any dividends and gains the fund pays out. Even though you will get a lower 15 % rate on your gains when you sell, you end up with $28,950, or about $4,600 less than with the 401(k). A tinier final tax bill cannot make up for having to pay taxes all along.

But what if you find yourself in a higher tax bracket later on? In this example you would have to be in a 38% tax bracket 20 years from now to have made the wrong decision. While Congress probably will have raised taxes by then, your bracket might not increase if your income drops in retirement. And the longer you wait to take the money, the more you stand to gain by keeping the money in your 401(k).

Plus, comparing a 401(k) with a stockindex fund is the toughest test, since index funds generate little in the way of tax bills before you sell. If you buy a bond fund, where income is taxed at your ordinary rate, or an actively managed stock fund that distributes more gains than an index fund and triggers a far bigger tax bill for you every year, the difference in favor of the 401 (k) account will be even greater.

The math ignores an employer match in your 401(k), which you are likely to get on at least part of your contribution. Add that in and the 401 (k) looks better still.

With the 401 (k) savings calculator at www.dinkytown.net. you can compare investing in and out of a 401(k), including the effect of having an employer match in your plan.

Rest assured that deferred investing yields more after-tax dollars.

401(k) vs. Paying Capital Gains 401 (k) Taxable Account

Beginning Account Value $10,000 $7,200

Account value: Year 20 $46,610 $31,929

Final Tax bill $13,051 $2,979

What you keep $33,559 $28,950

Assumes 28% federal tax bracket, an annualized 8% return and 1.79% dividend yield and a 15% capital-gains tax rate on the taxable account. Year 20 taxable account value reflects annual taxes paid on earnings.

According to a study by the National Center for Women and Retirement nine out of ten women will be solely responsible for their finances at some point in their lifetime. Women living in affluence may feel at ease with the resources they will have in retirement. However, this ease may lend a false sense of security if they do not realize that wealth must be strategically managed to last a lifetime.

Three life trends impact the retirement planning strategies of women:

Earning power. Women continue to earn less money than men, 77 cents for every dollar men make, and many have worked fewer years because they have raised a family.

Life expectancy. A 65-year-old woman is likely to live another 20 years, and there are four women for every man over the age of 100.

Roles. Women are often nurturers who focus on taking care of others. They may not think about financial planning to help meet their own retirement needs.

To be confident that you can afford to retire and live the life you imagined, it is important to understand your core living expenses, your retirement income stream and the projected costs of anticipated travel, hobbies or purchases. The following are some financial planning tips that can help women solidify their futures, while taking into consideration the impact of their marital status.

Living within your means and paying off your debt, including your mortgage, lets you maximize your savings and preserve your assets. To achieve this, the first step is to review your budget. If you do not have one, create one based on expenses, income and goals. You can then create a systematic savings plan, which includes saving for emergencies, as well as planning for future needs such as health care and long-term care.

While entering into a marriage does not necessitate a merger of finances, by creating a financial plan as a couple you can ensure that you both agree to your strategies for saving and investing, and understand the impact of lifestyle decisions. An open discussion about attitudes toward money, spending habits, goals and liabilities will help you determine the best way to manage your expenses.

The end of a marriage has a significant impact on finances. A woman's standard of living in a divorce decreases 25% to 40% on average, while a man's actually rises 10%. Working with financial experts during a divorce settlement, including your financial planner, tax professional and estate planning attorney, can help you reassess your financial worth to adjust your plans, if necessary, and reassign beneficiary designations.

Other life changes, such as the birth of a child or grandchild, also provide an opportunity to talk with your financial planner about your retirement plans. Outside of life events, scheduling annual reviews of your portfolio can help ensure your financial plan stays in line with inflation, market changes, new tax laws and your personal goals.

In the next two decades, as millions of aging baby boomers put their homes on the market, they will put downward pressure on prices, and their exodus will reshape neighborhoods and cities coast to coast.

In some states, the trend has already begun, making it harder for areas to recover from the real estate recession, which is not expected to bottom out until the second half of this year at the earliest.

There are already more sellers than buyers in six states: Connecticut, New York (excluding Manhattan), North Dakota, Pennsylvania, West Virginia and Hawaii. The trend first hits areas with cold weather and traffic congestion, which tend to drive retirees away.

Nationwide, the ratio of seniors to working-age residents will increase by 67% in the next 20 years. As boomers age, more will move into assisted-living centers, apartments or relatives' houses. These with two homes may sell one and retire to their vacation house. And when they pass on, many of their heirs will sell the properties.

Last hit should be warm-weather states, such as Florida, Arizona and Nevada, where retirees usually sell late in life. That is good news for homeowners in those states, where prices and sales are reeling from the collapse of the real estate bubble.

Answer: As part of the Tax Increase Prevention and Reconciliation Act that became law in May of 2006, Congress eliminated the restriction you mentioned for converting to a Roth IRA, although until 2010 the current income legibility rules still apply.

The legislation also offers two other goodies. First, if you convert in 2010, the income you must pay tax on will be split equally between 2011 and 2012, which defers the tax hit. If you think you will be in a lower tax bracket in 2010 than later on, however, you can elect to recognize the income that year.

Second, while Congress kept the rule that prevents you from making annual contributions to a Roth if your income exceeds certain thresholds, the new Roth conversion rules give you an easy way around this restriction starting in 2010. Just contribute to a nondeductible IRA, which anyone with earned income can do, and then convert to a Roth. You can even get a head start on this end-run by contributing to a nondeductible IRA before 2010 and then converting when the new rules go into effect that year.

If you do decide to convert, whenever that may be, you should be aware of one aspect of the rules that can trip you up if you have contributed to a nondeductible IRA or rolled an after-tax 401(k) into an IRA.

As an example, you have two IRAs with a total value of $50,000. One is a traditional IRA that has a $25,000 balance consisting of both deductible contributions and earnings on those contributions. The other is a nondeductible IRA that includes $20,000 of nondeductible, or after-tax, contributions and $5,000 of earnings.

If you decide to convert all your IRA money, then $20,000, the amount you contributed on a nondeductible, or after-tax basis, would not be taxable since you have already paid the tax on that money. But the remaining $30,000, your deductible contributions plus the investment gains in both accounts, would be taxable since Uncle Sam has yet to get his share of that money.

Unfortunately you cannot cherry pick IRA funds this way. Instead, when doing a conversion you must consider all of your non-Roth IRAs, deductible, nondeductible, rollovers, even SEP and SIMPLE IRAs, as one big pie that can contain both taxable and nontaxable money.

If you have made nondeductible, or after-tax, contributions to an IRA, the calculation of taxable vs. nontaxable conversion will be calculated on Form 8606.

As for whether there is a time limit to new conversion rules, Congress did not include any expiration date.

Most financial decisions require trade-offs. If you want to earn better-than-average returns in the stock market you need to tolerate above-average risk. Similarly, an adjustable-rate mortgage offers lower initial payments than a fixed-rate mortgage. But if interest rates rise, you and your furniture could end up on the sidewalk.

America's oldest baby boomers, who are turning 62 this year, face similar trade-offs in deciding whether to claim their Social Security benefits early. A little-known Social Security option, though, gives early retirees a way to have their cake and eat it, too.

If you claim benefits at 62, you can retire while you are young enough to enjoy it, but you will receive reduced benefits for the rest of your life. By contrast, waiting to file until at least full retirement age, 66 for boomers who turn 62 this year, will increase your monthly payments, reducing the risk that you will run out of money in your old age. For many boomers, though, that means working longer, a hard pill to swallow if you hate your job and want to spend more time with your grandchildren.

What most retirees do not realize is that they can change their minds. Under the Social Security Act, individuals who receive early-retirement benefits from Social Security can withdraw their application, repay the benefits they have received and refile for higher benefits at a later date.

Of course, for this strategy to work, you have to rustle up enough money to repay all the Social Security benefits you have received. You do not, however, have to pay interest on the benefits. And depending on your situation, you could still fare better than if you had kept receiving reduced Social Security benefits.

In order to repay and reapply for benefits, visit your local Social Security office, or call 800-1772-1213 and make an appointment. You will need to complete Form 521, which is available at Social Security's website, www.ssa.gov. If your spouse is receiving benefits based on your earnings record Social Security will require your spouse's consent before approving the application.

Once you repay your benefits, you can restart them whenever you want. But there is no reason to wait past age 70. After that, there is no advantage to delaying benefits.

Reapplying for benefits is best-suited for people who took early retirement, regret that decision and want to increase their benefits.

Claiming early-retirement benefits could put your spouse at risk. If one member of a married couple dies, the surviving spouse can receive his or her own benefits or the deceased spouse's benefits, whichever are greater. If you are the primary breadwinner, file early and die before you reapply for higher benefits your spouse is tuck with your choice for the rest of his or her life. Under Social Security rules, widows and widowers cannot repay and reapply for deceased spouse's benefits.

If you die soon after repaying your benefits, you will not recoup your investment. If you are the primary breadwinner, though, your spouse could still come out ahead because he or she would inherit larger survivor's benefits.

1. Appeals from Collection Due Process (DCP) Hearings Under Internal Revenue Code Section 6320 and 6330. The NTA remains convinced that the process serves an important function by providing taxpayers with a forum to raise legitimate issues prior to the IRS depriving them of property. The opinions reviewed this year support this view. Many of the reviewed decisions provided useful guidance on substantive issues, while others appropriately imposed or warned taxpayers about the possibility of sanctions being imposed in the future.

2. Gross Income Under Internal Revenue Code Section 61 and Related Sections. Common issues in the 112 cases the NTA identified include damage awards, discharge of indebtedness income and disability and Social Security benefits.

3. Summons Enforcement Under IRC Sections 7602, 7604, and 7609. Generally, the burden on the IRS to establish the validity of the summons is minimal and the burden on the taxpayer to establish the illegality of the summons is formidable. The taxpayer or the third party record keeper prevailed in only four of the 109 cases the NTA identified and reviewed.

4. Civil Damages for Certain Unauthorized Collection Actions Under IRC Section 7433. The NTA identified 100 opinions that involved a claim for damages for unauthorized collection action under IRC §7433. The courts affirmed the IRS position in almost all cases. Taxpayers did not win a Single case. However, in four cases, taxpayers prevailed on at least one issue.

5. Frivolous Issues Penalty and Related Appellate-Level Sanctions Under IRC Section 6673. In 16 of the 70 cases involving IRS §6673, the U.S. Tax Court decided not to impose the penalty but warned taxpayers they could face sanctions in the future for similar conduct.

6. Failure to File Penalty Under IRC Section 6651(a)(1) AND Estimated Tax Penalty Under IRC Section 6654. Among the cases analyzed, taxpayers were largely unsuccessful in their attempts to avoid these penalties. Taxpayers prevailed in full in only three of the 82 cases, although seven others resulted in split decisions. Forty-one cases involved imposition of the estimated tax penalty in conjunction with the failure to file penalty, while only one case involved the estimated tax penalty without simultaneous imposition of the failure to file penalty.

7. Trade or Business Expenses Under IRC Section 162 and Related Sections. The NTA identified 77 cases that included a trade or business expense issue. The courts affirmed the IRS position in full in nearly two-thirds of the cases, while taxpayers prevailed five percent of the time. The remaining cases resulted in split decisions.

8. Accuracy-Related Penalty Under IRC Sections 6662(b)(l) and (2). IRC §6662(b) also authorizes the IRS to impose three other accuracy-related penalties. However, taxpayers litigated these other penalties less frequently than they litigated the negligence and substantial understatement penalties.

9. Relief from Joint and Several Liability Under IRC Section 6015. The NTA has recommended eliminating joint and several liability and the consequent need to inquire about one spouse's knowledge.

10. Family Status Issues Under IRC Section 2,24,32, and 151. More than two-thirds of the 41 cases the NTA identified dealt with multiple family status issues, with the determination of one issue often affecting others. For example, a denial of the dependency exemption will result in the summary denial of the child tax credit and may jeopardize eligibility for head-of-household filing status.

Claiming contractors' help as independent can exempt the business owner from complying with federal income tax, Medicare, Social Security, state worker's compensation insurance and other employment regulations. But making the wrong call can leave the employer liable for paying huge sums in back wages and taxes. Even big companies that should know better get it wrong sometimes.

Microsoft had to pay $97 million when it lost a claim pertaining to what it considered independent contractors. The courts said no, those are employees.

A key difference between independent contractors and employers is the degree of independence. Employees tend to have a set schedule; they are expected to be at a particular place at a particular time, doing a specific task.

Independent contractors, work where they want and when they want. Independent contractors may work for several companies.