Bebeto Matthews / AP

About 2.7 million families will benefit from the tax break for taking mass transit.

Transit riders will get a bigger tax break this year, thanks to a provision tucked into the legislation that averted a fall off the fiscal cliff.

As part of the American Taxpayer Relief Act of 2013, Congress decided that for 2013 people who take mass transit to work will get the same pretax benefits as those who drive and pay to park their car. Both can set aside up to $245 a month to cover these expenses, if their employer offers such a plan.

That’s a big change from last year, when employees could set aside up to $240 a month to park, but only $125 a month for transit expenses. In 2011, the tax savings had been the same for parking or public transportation.

Now parity is back and that could mean more savings for transit commuters.

“Someone in the highest federal tax bracket – 30 to 39.6 percent – could save about $570 a year. Someone in the 15 percent tax bracket could save about $260 a year,” explained Lisa Greene-Lewis, lead CPA at the American Tax and Financial Center at TurboTax. 

According to Bloomberg News, about 2.7 million families will benefit from this tax break.

“It’s not so much the dollar value; it’s the parity,” said Jon Martz, a vice president at vRide, which provides vanpool services in about 60 different urban areas in the country. “Why give people an incentive to commute in single occupancy cars? Give them a benefit of equal value for choosing to take public transportation, if they can do it.”

And there’s more good news. Congress made the change retroactive. It’s as if the higher limit of $240 had been in effect for transit riders all last year. The IRS already gave employers guidance on how to put that money back into their employees’ paychecks.

If you used this program last year and didn’t see an adjustment in your paycheck to cover the reimbursement, talk to your employer. If you haven’t been told about the higher limits for 2013 and want to put more aside, contact human resources.

Moving forward

The fiscal cliff deal only guaranteed an equal tax break for commuters who drive and those who take public transit for 2013. Those who support public transportation want this provision to be permanent.

“We need Congress to act to finally make the transit and the parking benefits equal so that all commuters are on a level playing field,” said Steven Higashide, a senior planner at the Tri-State Transportation Campaign, a non-profit watchdog group that serves New York, New Jersey and Connecticut. “This will create an incentive for transit riders and take more cars off the road.”

Frank Linkchorst, an aerospace engineer in California, agrees. He rides a vanpool weekdays from his home in El Segundo to work in Los Angeles 38 miles away. It’s cheaper and faster than being in a car.

“Anything that encourages people to rideshare is helpful,” he told me. “With 10 of us in that van, that’s nine fewer cars on the road at any given time – and that helps everybody.”

More Information:

• IRS Guidance: Application of Retroactive Increase in Excludible Transit Benefits 
• TurboTax: America Avoids the Fiscal Cliff: This Could be Money in Your Pocket

Herb Weisbaum is The ConsumerMan. Follow him on Facebook and Twitter or visit The ConsumerMan website.

IRS Oversight Board

Most Americans don't think it's OK to cheat on taxes.

Americans may make plenty of jokes about cheating on their taxes, but a new survey finds that in reality most don’t think it’s OK to rob the tax man. Or at least, that’s what they’re telling the IRS Oversight Board.

The 2012 Taxpayer Attitude Survey, released Tuesday by the independent oversight board, finds that 87 percent of Americans don’t think it’s OK to cheat on your taxes. That’s a 3 percentage point increase from last year.

Only 11 percent think it’s OK to cheat, either a little or as much as possible.

Perhaps more surprising, 95 percent of Americans said their personal integrity influences them to report their taxes honestly, an 8 percentage point increase from five years earlier.

About 63 percent said they are influenced by fear of an audit, while 70 percent are motivated by third-party information that could show them to be a tax cheat.

The IRS Oversight Board, an independent body created by Congress in 1998 to oversee the Internal Revenue Service’s actions, completed its annual survey of 1,500 Americans last August and September. The survey has a 3.1 percent margin of error.

If they’re going to pay their taxes honestly, most Americans seem to think everyone else should, too.

The survey found that more than 90 percent of Americans think it’s important that the IRS ensures that low- and high-income taxpayers, small businesses and corporations honestly pay their taxes, too.

Those results appear to show that Americans have come to feel more strongly in recent years that everyone should pay their fair share of taxes, and the IRS should vigorously enforce tax laws.

The results come as many Americans are either getting ready to file their 2012 income tax returns, or already have done so.

They also follow a bruising battle in Washington over the so-called fiscal cliff, a series of tax hikes and spending cuts that were scheduled to take effect until Congress reached a last-minute deal.

The fiscal cliff agreement raised taxes for wealthy Americans earning $400,000 or more and allowed taxes on capital gains and dividends to go up. It also ended a payroll tax holiday, meaning that most Americans are seeing more of their paycheck going to the tax man for Social Security and other entitlements this year.

Here’s a scary thought, especially if you owe back taxes: What if the Internal Revenue Service reported your payment history to the big national credit bureaus?

Unlike many other debts owed to the federal government, unpaid taxes are not reported to credit bureaus. The IRS is not allowed to directly share this information because of federal privacy laws.

Of course, Congress could always change the law to allow the IRS to directly report all delinquencies to the credit bureaus. No one has proposed making this change, but last year the Senate Finance Committee did ask the General Accounting Office to look at the issue.

The GAO did not make any recommendations in its report released in October, but it did list arguments for and against the idea. It also provided some hard numbers about the staggering amount of money owed to the federal treasury in unpaid taxes.

As of October 2011, about $343 billion was owed in unpaid federal tax debts. That’s more than the federal deficit of $207 billion for the 2012 budget year. Most of the outstanding debts are relatively small –less than $5,000.

Some tax information does make it to the credit bureaus. When the IRS files a tax lien to collect back taxes, that information is public record and can be picked up by credit reporting agencies. The GAO found that liens have been filed for more than half of all the dollars owed in tax debts.

Why change the current system?

Simply put: the possibility of more revenue.

If this information were reported to the credit bureaus it would have an effect on credit scores and that might change behavior. Some people might be encouraged to pay their taxes on time or pay off existing debts to improve their credit scores.

It might also provide another way to enforce the tax code. Anyone who owed more than a certain amount of back taxes could be barred from receiving certain benefits, such as government contracts, grants or loans.

Would this really make a difference? According to the GAO report there’s no way to be sure.

“Some taxpayers have agreed to installment agreements, so reporting their debts many not influence their willingness to pay because they are already making payments. IRS classifies other debts as uncollectible, and reporting those debts many not make the debts any more collectible.”

There’s also the belief that providing tax payment history to credit bureaus would give potential lenders a more complete – and possibly more accurate – picture of the person or business applying for credit. 

Under the current system, the credit reporting agencies know the dollar amount of a tax debt when a lien is filed. They don’t know if the debt grows because of penalties and interest. They don’t know when it’s reduced as the amount owed is paid down.

Direct reporting, supporters say, would provide more current information which would give the taxpayer an incentive to pay off the debt because the declining balance would improve their credit history.

The GAO did offer this caution: reporting tax payment information on an ongoing basis could increase the risk that negative information shows up in a person’s credit file twice.

Would it really make a difference?

The General Accounting Office did not come to a conclusion on that.

It noted that such a system could cost the IRS money because it would have to handle transmission of information to the credit bureaus and deal with taxpayer inquiries and disputes.

“Taxpayers would be forced to either dispute the inaccurate information to have it corrected or face possible serious consequences such as denial of credit, employment, or housing due to the inaccurate negative information on their credit histories. IRS would incur additional costs as it would have to respond to related inquiries and disputes.”

The GAO report also included a caution from the National Taxpayer Advocate that full reporting could result in some people choosing not to file tax returns – or to file inaccurately – if they know they owe money to the IRS.

The credit reporting industry hasn’t taken a position on this idea. And since nothing has been proposed, consumer groups haven’t really focused on the issue.

Chi Chi Wu, staff attorney for the National Consumer Law Center said her main concern was the potential harm that could be caused by reporting errors.

“Would tax debts show up in the wrong credit reports?” she asked. “I’d be concerned that adding a whole new batch of data would increase the number of errors credit bureaus make and how difficult it can be to get them fixed.”

Wu noted that American taxpayers share some very private and confidential information with the IRS and in return Congress prohibits the IRS from sharing that information.

“If that bargain is going to be changed,” Wu said, “we want to think long and hard about why and how it would be changed.”

Herb Weisbaum is The ConsumerMan. Follow him on Facebook and Twitter or visit The ConsumerMan website.

Herb will be a guest on the Jim Bohannon Radio show Tuesday night (Feb. 26) talking about current consumer issues. Listen live at 11 pm Eastern. Here’s how to find a radio station in your area.

By Kara Reinhardt, Cheapism.com

Less than two months remain before the April 15 deadline to file your 2012 taxes. Before you spend $200 on professional tax preparation or even $75 for a software program, take a minute to peruse the Internal Revenue Service website. There you’ll find more than a dozen companies, including big names such as H&R Block, that provide free online software and free federal e-filing to taxpayers who made up to $57,000 last year. Some also offer free returns for participating states. About 70 percent of taxpayers qualify for this Free File program, according to the IRS. The companies peddle free software on their websites as well, without restrictions, but beware the upsell. While taxpayers with complicated returns may need pricier software and a bit more hand holding, the best free programs dispense helpful advice and support a wide array of forms and schedules.

Below are Cheapism’s top providers of free tax preparation software with state filing fees under $20.

• TaxAct ($14.95 for state returns) limits its IRS Free File edition to taxpayers 18 to 57 with adjusted gross income of $51,000 or less. Consumers can also find a free edition on the company’s website that lacks such eligibility criteria. Unlike most other providers of free online software, TaxAct supplies a free download/CD version as well. Reviewers point to this as a selling point for taxpayers wary of submitting personal and financial information over the web.
• H&R Block Free File (free for many states, $14.95 for others) is not to be confused with H&R Block At Home Free, which appears on the company’s website and charges $27.95 for each state return. Consumers must go through the IRS website to find the Free File version. H&R Block consistently earns high ratings in expert reviews and includes features such as audit support and live tax advice from a professional even with its free software.
• ESmart Tax customers who access the software through the IRS can prepare and file some state tax returns for free and most for $12.95, compared with $19.95 through the free Basic Edition on the eSmart Tax website. Reviews note approvingly that this online-only software is backed by a retail tax preparation provider, Liberty Tax Services, and includes free audit support and live chat. It also speeds up the process and minimizes errors by importing data from W-2 and 1099 forms, as well as last year’s return if you switch from a big-name competitor.
• FreeTaxUSA ($9.95 for state returns) is a bare-bones program with limited customer support but may be all many taxpayers need. It actually exceeds the capabilities of some fancier free software by accommodating homeowners, investors, self-employed professionals, and taxpayers claiming dependents. Reviewers say the simplicity can work in your favor by making it less likely you’ll overlook something or make a mistake.

Taxpayers with adjusted gross income up to $31,000, active military who made up to $57,000, and anyone eligible for the Earned Income Tax Credit can also get their hands on free software from market leader TurboTax through the IRS. The TurboTax Freedom Edition includes free filing for qualifying states and charges $14.99 for other states, vs. $27.99 per state with the Free Edition on the TurboTax website. The Freedom Edition also supports additional forms such as Schedule C for taxpayers who are self-employed.

Whichever you choose, don’t wait: Software providers hike their fees as April approaches, so you can’t count on the current prices to last for long.

More from Cheapism:

• Free tax software
• Best free online dating websites
• Best cheap snow tires
• Cheap eyeglass frames online

For some couples, first comes love, then comes marriage – and then comes a higher tax bill.

For others, it’s love, marriage and then nice little gift from Uncle Sam: Lower taxes than if each person were single.

A new tool from the Tax Policy Center lets you find out whether you and your spouse could be subject to what’s called the “marriage penalty” – a quirk in our complicated tax laws that results in some married couples paying more in taxes than if they were single.

Roberton Williams, a senior fellow with the Tax Policy Center, said his previous research has shown that more taxpayers get a tax benefit from being married than pay a tax penalty.

He suspects that trend has moved even further in favor of married couples getting tax benefits in recent years, because of tax cuts enacted during the Bush Administration that are still in effect today.

Nevertheless, some couples do end up paying more taxes than before they were married.

A couple with high earnings could be pushed into a higher tax bracket than if they were filing alone under the new laws passed as part of the fiscal cliff deal, which put the highest tax bracket at $400,000 for individuals and $450,000 for married couples.

But Williams said low-income families can actually end up being hit hardest by the marriage penalty. That’s because major tax breaks designed to encourage people to work phase out as incomes go up.

For example, a single mom two kids under 13 making $10,000 a year could lose out on a lot of potential tax breaks if she marries someone with an income of about $30,000 a year. Using the Tax Policy Center’s calculator, a couple in that situation would pay a marriage penalty of more than $1,000, assuming no other deductions.

On the other hand, a family with two kids under 13 in which one spouse makes $100,000 a year and the other makes $20,000 would see a tax benefit from being married. According to the Tax Policy Center’s calculator, that couple would see a bonus of more than $400, also assuming no other deductions.

If you do end up paying a tax penalty, you can to take comfort in the fact that the financial gains are likely to outweigh the losses in the long run. Other research has shown that people who get and stay married tend to be wealthier than those who stay single or get divorced.

Want to see if you’ll get a tax bonus or a penalty? Check out the marriage penalty calculator.

Related: Here's how we want Uncle Sam to spend our tax dollars

If you’re among the millions of Americans who will be filing your federal income taxes in the coming weeks, chances are you’ve given some thought to how you’d like those hard-earned dollars to be spent.

A new survey finds that overall, Americans would like Uncle Sam to spend their tax dollars on making health care affordable, creating jobs and improving education. Defense spending and environmental protection were at the lower end of the list of priorities.

The online survey of a representative sample of 1,000 Americans, conducted on behalf of brokerage TD Ameritrade in mid-November, asked respondents what three areas they would choose to support with their tax dollars. The survey has a 3 percentage point margin of error.

The survey found that 38 percent would like their tax dollars to go toward making health care more affordable, while 36 percent think the government should invest in job creation. About 28 percent said a top priority should be that the government improve the quality of education.

The least popular of the choices offered were protecting the environment, investing in job training and defense spending. Each of those garnered less than 18 percent of the vote.

In reality, your tax dollars are far more likely to go toward defense than education. Last year, the White House released a handy calculator so Americans could see where their tax dollars were spent.

According to the administration’s calculations, about 25 percent of tax dollars are going to national defense. Another nearly 24 percent is going toward health care, in the form of programs such as health insurance for children and Medicare.

While education may be a top priority for those surveyed, it is not currently a top budget item. A little under 4 percent of last year’s tax dollars went to education, according to the White House calculations.

Federal authorities have taken action against 389 theft suspects as part of a coast-to-coast crackdown on identity theft, the IRS announced Thursday.

The Internal Revenue Service sweep took place in 32 states and Puerto Rico in recent weeks in an attempt to thwart identity thefts.

 “The IRS is very serious about prosecuting identity thieves and protecting American citizens,” said Steven Miller, IRS acting commissioner, during a telephone news conference.

The crackdown has led to 109 arrests and 189 indictments, Miller said.

Clearly, the IRS wants everyone – taxpayers, tax preparers and criminals – to know it is focused on the problem that has hurt so many victims, stolen so much money from the U.S. Treasury.

What is tax refund identity theft?

For identity theft victims, paying taxes is a nightmare

It’s when an identity thief uses a stolen Social Security number to file a false return in the victim’s name and claims a large refund. It can be done electronically or with a paper return.

If the refund is paid to the crook, the real tax payer cannot get his/her refund until the situation is investigated and it’s verified that their refund was indeed stolen. This can delay the process by weeks or months.

While enforcement actions are on the rise, the problem continues to grow. Miller said IRS is getting better at spotting false returns and blocking payment, but he admitted, “We still have work to do.”

He called identity theft one of the “biggest challenges” facing the agency, one that threatens the IRS and people’s view of the IRS.

Just look at the numbers.

Last fiscal year, the IRS stopped $20 billion in fraudulent refunds, up from $14 billion the year before. How much money made it into the hands of the crooks? Miller told NBC News there’s no way to know what they didn’t catch.

Online tax filing popular with taxpayers – and thieves

One indication of the continued problem is the growing number of taxpayers who are given a special IRS Identity Protection PIN to use when filing their taxes because they’ve been victimized by an identity thief. The IRS issued 250,000 of them in 2012. So far this filing season they’ve given out 770,000.

More jail time
The IRS wants you to know that number of convicted tax identity thieves continues to grow and the sentences are getting longer. The average sentence is now four years. But some refund cheats get much more time behind bars. Two recent examples:

• On December 21, 2012 in Memphis, Tenn., Aundria Bryant-Branch was sentenced to 262 months in prison and ordered to pay back $690,000 in restitution to the IRS. She was charged with passing along stolen information to crooks who used it to file false tax returns.
• On November 7, 2012, in Chicago, Andrew Watts was sentenced to 114 months in prison and ordered to pay $1.7 million in restitution. According to court documents, Watts filed more than 470 false federal income tax returns in the names of people who had died. In all, he claimed fraudulent refunds of more than $120 million.

Spotting refund identity theft 
The IRS says you could be the victim of tax refund identity theft if you are notified by Internal Revenue or you tax preparer that:

• More than one tax return for you was filed.
•  You have a balance due, refund offset or have had collection actions taken against you for a year you did not file a tax return.
• IRS records indicate you received more wages than you actually earned.
• Your state or federal benefits were reduced or cancelled because the agency received information reporting an income change.

The IRS contacts possible ID theft victims by mail. The agency never initiates contact via email. So if you get an email indicating you should contact the IRS – it’s bogus. But con artists also send out letters that look like they are from the government. If you get a letter that indicates you may be the victim of identity theft, do the smart thing and contact the IRS at a number you know is legitimate: 1-800-829-1040.

More information:

• News Release: IRS Intensifies National Crackdown on Identity Theft; Part of Wider Effort to Protect Taxpayers, Prevent Refund Fraud
• IRS: Identity Protection
• IRS:  Tips for Taxpayers, Victims about Identity Theft and Tax Returns
• Identity Theft Resource Center 

Herb Weisbaum is The ConsumerMan. Follow him on Facebook and Twitter or visit The ConsumerMan website.

For Valerie Tobias, a grandmother who lives just outside of Chicago, the TV commercial for American Tax Relief was the answer to her prayers.

“They promised they could settle your taxes for pennies on the dollar,” Tobias recalled.

At the time, she owed the IRS about $12,000 and had no way to pay that tax bill. So she called the company and was told she qualified for tax relief. They could start working on her case as soon as she paid $3,800.

“They took my money and didn’t do anything, absolutely nothing,” Tobias told me. “I was trying to better my situation by getting my taxes taken care of and they just lied to me. It was horrible.”

Tobias is one of thousands of people across the country who took the bait and paid American Tax Relief to dramatically reduce their tax bills. The Federal Trade Commission (FTC) says the company took in around $103-million dollars before it was shut down in September of 2010.

This week, a federal court ordered the company and its owners to pay more than $15 million in cash and assets to settle charges they violated federal law.

“We determined that out of approximately 20,000 consumers, less than 600 received tax reductions that were for more than they paid American Tax Relief,” said Karen Dodge, the FTC attorney who handled this case.

They didn’t help Eva Russell of Pemberton, N.J., who described her experience as “a real nightmare.”

Russell and her former husband owned a business that owed the state of New Jersey an “enormous” tax bill. American Tax Relief said they could get that reduced for a fee of $12,000, payable in advance.

 “They said they had lawyers who would work with the state to decrease the amount we owed.” Russell told me. “They said they could guarantee that.”

Russell thought the company seemed legitimate. It had a nice website with testimonials from people who said they’d been helped. She was assigned a case manager who said he would handle everything.

But after waiting a year, nothing happened. Russell tried to get her money back with no luck.

“Shame on me for getting involved, but it’s unbelievable to me that someone would take $12,000 and not do anything,” she said. “I’m not a stupid person. I have a graduate degree, but you feel real stupid after something like this.”

Be wary of tax relief companies
Tax relief services prey on people in distress. They say they can drastically reduce or even eliminate your tax debt and stop garnishment or other back-tax collection. Don’t believe it.

“In fact, that is not possible for most people,” the FTC’s Karen Dodge told me.

The IRS has an “Offer in Compromise” program that lets people settle their tax debt for less than they owe, but you have to prove that you can’t pay the full amount.

“There isn’t some trick to getting these. You have to be qualified by the IRS, not by a company that says you qualify,” Dodge explained. “There are no guarantees. A lot of documents need to be reviewed to determine if you qualify. It cannot be done in a short phone conversation.”

 The FTC’s advice: If you’re going to pay someone to help you with a tax problem, make sure they’re legitimate. Find a good accountant, CPA or attorney. Or contact the IRS and see what you can do for yourself.

Give your money to a tax relief scammer, and odds are you will never see it again. You’ll be worse off than when you started.

More information:

• FTC Settlement: Tax relief scammers agree to pay more than $15 million
• FTC Tip Sheet: Tax Relief Companies
• IRS: What if I can’t pay my taxes?
• FTC Tip Sheet: Coping with Debt

Herb Weisbaum is The ConsumerMan. Follow him on Facebook and Twitter or visit The ConsumerMan website.

Getty Images

Ben Franklin, the Beatles, even Archie Bunker -everyone has something to say about taxes.

The modern income tax system has been called a lot of things, and now it also can officially be called a centenarian.

The current tax system was formalized 100 years ago this month, when the 16^th Amendment was ratified.

Before income taxes, the government was mainly getting its money from tariffs and sin taxes on things like alcohol and tobacco, said Joseph Thorndike, director of the Tax History Project at Tax Analysts.

Some argued that meant the middle and lower class were being disproportionately burdened by taxes, while the upper class wasn’t carrying enough of the burden.

“It was really a fairness tool. It was also a revenue tool,” Thorndike said. “Those same people who thought it would be fair thought it would raise a lot of money.”

It wasn’t the first time the country had ever had a federal income tax. Most notably, there had been one briefly during the Civil War, but it had been allowed to expire once the war ended, Thorndike said. After that, there were many attempts to clarify a federal income tax system, and the 16^th Amendment aimed to do that.

In the years since 1913, the current tax system has evolved to include things that people never could have imagined 100 years ago, such as tax breaks for hybrid cars. But Thorndike noted that the basic premise of the tax code – and the disputes over whether it is fair – have remained the same over the decades.

“We’re still arguing about the same stuff and still complaining about the same stuff,” he said.

To wit, here are 100 quotes about why we hate, and love, the tax system.

Getty Images

Ben Franklin

1.  “In this world nothing is certain but death and taxes.” — Ben Franklin

2. “The hardest thing to understand in the world is the income tax.” — Albert Einstein

3. “The only difference between a tax man and a taxidermist is that the taxidermist leaves the skin.” — Mark Twain

4. “The income tax has made liars out of more Americans than golf.” — Will Rogers

5. “While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks.”  — Warren Buffett

6. “I have always paid income tax. I object only when it reaches a stage when I am threatened with having nothing left for my old age — which is due to start next Tuesday or Wednesday.” — Noel Coward

7. “The income tax created more criminals than any other single act of government.”  — Barry Goldwater

8. “Hating the Yankees is as American as pizza pie, unwed mothers, and cheating on your income tax.” — Mike Royko

9. “When there is an income tax, the just man will pay more and the unjust less on the same amount of income.”  — Plato

10. “Income tax returns are the most imaginative fiction being written today.” — Herman Wouk

CBS via Getty Images

Carroll O'Connor as Archie Bunker

11. “No taxation without regimentation.” — Archie Bunker (fictional TV character on "All in the Family")

12. “I think that taxes would be fair if we first get rid of the tax code.” — Herman Cain

13. “When Mitt Romney says he wants to reform the tax code, hold onto your wallets.” — Charles Schumer

14. “Read my lips: No new taxes!” — George H.W. Bush (by way of Peggy Noonan)

15. “Congress can raise taxes because it can persuade a sizable fraction of the populace that somebody else will pay.” — Milton Friedman

16. “Collecting more taxes than is absolutely necessary is legalized robbery.” — Calvin Coolidge

17. “If Thomas Jefferson thought taxation without representation was bad, he should see how it is with representation.” — Rush Limbaugh 

18. “Taxes, after all, are dues that we pay for the privileges of membership in an organized society.” — Franklin D. Roosevelt

19. “The United States has a system of taxation by confession.” — Hugo Black

20. “There is no such thing as a good tax.” — Winston Churchill

21. “Why is it that if you take advantage of a tax break and you're a corporation, you're a smart businessman, but if you take advantage of something you need to not be hungry, you're a moocher?” — Jon Stewart 

22. “They can't collect legal taxes from illegal money.” — Al Capone

23. “As you know, under our three-branch system of government, the tax laws are created by: Satan.” — Dave Barry

24. “In general, the art of government consists in taking as much money as possible from one party of the citizens to give to the other.” — Voltaire

25. “Isn't it appropriate that the month of the tax begins with April Fool's Day and ends with cries of 'May Day!'?”  — Rob Knauerhase

26. “Today, it takes more brains and effort to make out the income-tax form than it does to make the income.” — Alfred E. Neuman (fictional mascot on "Mad" magazine)

27. “Elections should be held on April 16th — the day after we pay our income taxes. That is one of the few things that might discourage politicians from being big spenders.” — Thomas Sowell

28. “We don't pay taxes. Only the little people pay taxes.” — Leona Helmsley

29. “The genius of our ruling class is that it has kept a majority of the people from ever questioning the inequity of a system where most people drudge along, paying heavy taxes for which they get nothing in return.” — Gore Vidal

30. “The only difference between death and taxes is that death doesn't get worse every time Congress meets.” — Will Rogers

31. “I am favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible.” — Milton Friedman

32. “The people are hungry: It is because those in authority eat up too much in taxes.” — Lao Tzu

33. “One of the things I have been preaching around the world is collecting taxes in an equitable manner, especially from the elites.” — Hillary Clinton

Getty Images file

Mitt Romney

34. “These are people who pay no income tax. Forty-seven percent of Americans pay no income tax. So our message of low taxes doesn’t connect.” — Mitt Romney

35. “I'm proud to pay taxes in the United States; the only thing is, I could be just as proud for half the money.” — Arthur Godfrey 

36. “And the cornerstone of my economic policies, when I first got elected, was cutting taxes on everybody on who paid taxes.” — George W. Bush

37. “You don't pay taxes — they take taxes.” — Chris Rock

38. “Taxes are not good things, but if you want services, somebody's got to pay for them so they're a necessary evil.” — Michael Bloomberg

39. “Big business never pays a nickel in taxes, according to Ralph Nader, who represents a big consumer organization that never pays a nickel in taxes.” — Dave Barry

40. “The wages of sin are death, but by the time taxes are taken out, it's just sort of a tired feeling.” — Paula Poundstone

41. “Taxes are important. President Bush's tax proposals leave no rich person behind. Voters approve of President Bush helping the kind of people they wish they were one of.”  — Andy Rooney

42. “The reward of energy, enterprise and thrift is taxes.” — William Feather 

43. “Washington is a place where politicians don't know which way is up and taxes don't know which way is down.” — Robert Orben

44. “I just want Texas to be number one in something other than executions, toll roads and property taxes.” — Kinky Friedman

45. “I think most people... would be glad to pay the same taxes they paid when Bill Clinton was president, if only they could have the same economy they had when Bill Clinton was president.” — Howard Dean

46. “It's really American to avoid paying taxes, legally.” — Lindsey Graham

47. “I've been held responsible for taxes I know nothing about.” — James Brown

48. “We're going to look awfully stupid if we give income tax relief to people who do not pay income taxes.” — Joe Scarborough

49. “There aren't many downsides to being rich, other than paying taxes and having relatives asking for money. But being famous, that's a 24-hour job right there.” — Bill Murray

50. “The rich aren't like us, they pay less taxes.” — Peter De Vries

51. “I'm like the guy who prepares your taxes or a dentist. I'm very conservative and boring in a lot of ways.” — Augusten Burroughs

52. “The avoidance of taxes is the only intellectual pursuit that still carries any reward.” — John Maynard Keynes

53. “Tax reform is taking the taxes off things that have been taxed in the past and putting taxes on things that haven't been taxed before.” — Art Buchwald

54. “In levying taxes and in shearing sheep it is well to stop when you get down to the skin.” — Austin O'Malley

55. “April is tax month. If you are having trouble filing your taxes, then you should hire an accountant. They'll give you the same advice that they've given hundreds of corporations — taxes are for douche bags.” — Ed Helms

56. “Look, we play the 'Star Spangled Banner' before every game. You want us to pay income taxes, too?” — Bill Veeck

57. “Inheritance taxes are so high that the happiest mourner at a rich man's funeral is usually Uncle Sam.” — Olin Miller

58. “When we played, World Series checks meant something. Now all they do is screw your taxes.” — Don Drysdale

59. “The politician's promises of yesterday are the taxes of today.” — Mackenzie King

60. “Commercials on television are similar to sex and taxes; the more talk there is about them, the less likely they are to be curbed.” — Jack Gould

61. “Death, taxes and childbirth! There's never any convenient time for any of them.” — Margaret Mitchell

62. “We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.” — Winston Churchill

63. “I like to pay taxes. With them, I buy civilization.” — Oliver Wendell Holmes Jr.

64. “The invention of the teenager was a mistake. Once you identify a period of life in which people get to stay out late but don't have to pay taxes — naturally, no one wants to live any other way.” — Judith Martin

65. “The power to tax is the power to destroy.” — John Marshall

66. “They tax when you earn a dollar, they tax you when you save it, they tax you when you invest it. If you earn a dividend, they tax it again, and if you're stupid enough to die, they steal up to half.” — Grover Norquist

67. “This is a question too difficult for a mathematician. It should be asked of a philosopher”(when asked about completing his income tax form) — Albert Einstein

68. “The way taxes are, you might as well marry for love.” — Joe E. Lewis

69. “A penny saved is worth two pennies earned . . . after taxes.” — Randy Thurman

70. “Paying tax should be framed as a glorious civic duty worthy of gratitude — not a punishment for making money.” — Alain de Botton

Getty Images file

Ronald Reagan

71. “The taxpayer — that's someone who works for the federal government but doesn't have to take the civil service examination.” — Ronald Reagan

72. “America is a land of taxation that was founded to avoid taxation.” — Laurence J. Peter

73. “Unquestionably, there is progress. The average American now pays out twice as much in taxes as he formerly got in wages.” — H.L. Mencken

74. “The nation should have a tax system that looks like someone designed it on purpose.” — William Simon

75. “Be wary of strong drink. It can make you shoot at tax collectors... and miss.” — Robert Heinlein

76. “Another difference between death and taxes is that death doesn't get worse every time the legislature meets.” — Robert Quillen

77. “It's income tax time again, Americans: time to gather up those receipts, get out those tax forms, sharpen up that pencil, and stab yourself in the aorta.” — Dave Barry

78. “Man is not like other animals in the ways that are really significant:  animals have instincts, we have taxes. — Erving Goffman

79. “Dear IRS, I am writing to you to cancel my subscription. Please remove my name from your mailing list.” — Charles M. Schulz (Snoopy)

80. “The point to remember is that what the government gives it must first take away.” — John S. Coleman

81. “Philosophy teaches a man that he can't take it with him; taxes teach him he can't leave it behind either.” — Mignon McLaughlin

82. “Our tax code is so long it makes 'War and Peace' seem breezy.” — Steven LaTourette

83. “We are told that this is an odious and unpopular tax.  I never knew a tax that was not odious and unpopular with the people who paid it.” — John Sherman

84. “You must pay taxes. But there's no law that says you gotta leave a tip.” — Morgan Stanley advertisement

85. “Next to being shot at and missed, nothing is really quite as satisfying as an income tax refund.” — F.J. Raymond

86. “There's nothing wrong with the younger generation that becoming taxpayers won't cure.” — Dan Bennett

87. “It's about ten times the size of the Bible — and unlike the Bible, contains no good news.” — Don Nickles, about the Internal Revenue Code

88. “Nothing hurts more than having to pay an income tax, unless it is not having to pay an income tax.” — Thomas Robert Dewar

89. “Every advantage has its tax.” — Ralph Waldo Emerson

90. “Income tax time is when you test your powers of deduction.” — Shelby Friedman

91. “The difference between tax avoidance and tax evasion is the thickness of a prison wall.” — Denis Healey

92. “Taxes, are the dues that we pay for the privileges of membership in an organized society.” — Franklin D. Roosevelt

93. “A government which robs Peter to pay Paul can always depend on the support of Paul.” — George Bernard Shaw

94. “Rich bachelors should be heavily taxed. It is not fair that some men should be happier than others.” — Oscar Wilde

95. “Political figures who talk a lot about liberty and freedom invariably turn out to mean the freedom to not pay taxes and discriminate based on race; freedom to hold different ideas and express them, not so much.” — Paul Krugman

96. “The United States has a huge budget deficit so taxes are going to have to go up and I certainly agree they should go up more on the rich than everyone else. That — that’s just justice.” — Bill Gates

Getty Images

The Beatles

97. “If you drive a car, I'll tax the street. If you try to sit, I'll tax your seat. If you get too cold, I'll tax the heat. If you take a walk, I'll tax your feet.” — The Beatles

98. “You work hard, you went hungry now the taxman is out to get you.” — Cheap Trick

99. “Tax me, please.” — George Takei

Getty Images file

Jimmy Buffett

100. “But talk is cheap, it takes money to buy your freedom, and the taxman’s knocking at your door.” — Jimmy Buffett

Sources: Bartleby.com, brainyquote.com, goodreads.com, quotegarden.com, quotationsbook.com, news reports and author speeches or writings.

You plan on getting a tax refund, but you don’t have the money to pay for the tax-preparation service. No problem, just sign up for a Refund Anticipation Check (RAC) and that charge will be deducted from your refund when you get it.

On its website, H & R Block describes a RAC as “a quick and convenient way to get all the money you deserve without having to pay upfront.”

Here’s how it works. The customer gets a temporary bank account where the IRS can direct deposit the refund. When the money arrives, the bank issues a check or prepaid debit card, minus the tax preparation charge, and closes the account.

Banks typically charge about $30 to $35 for this service. And for consumer advocates, that’s the rub.

“With a RAC you pay a fee to finance the expense of tax preparation, and we don’t think that’s a smart idea,” said Tom Feltner, director or financial services for the Consumer Federation of America. “We always warn people to be wary of financial products that are sold alongside tax preparation.”

That short-term loan turns out to be fairly expensive.  If you pay $30 to defer payment of a $200 tax preparation bill for 3 weeks, the APR on that loan is equivalent to 260 percent.

Most importantly, there is no speed advantage to a RAC.

“It’s not any faster than filing your return electronically and getting a direct deposit into your own bank account or into a prepaid debit card that you already have,” said Chi Chi Wu, staff attorney at the National Consumer Law Center (NCLC). “The only advantage is that you have the tax preparation fee deducted from your refund.”

Related: Are you struggling in the suburbs? We want to hear from you.

RACs have been around for years, but they’re growing in popularity. NCLC estimates that about 18.4 million taxpayers received a RAC in 2011, up from 14.6 million the year before and 12.9 in 2009.

The Refund Anticipation Check has replaced the Refund Anticipation Loan (RAL) as the add-on product pitched to taxpayers squeezed for cash or who do not have a bank account for direct deposit.

RALs, which give the customer an immediate refund, have been widely criticized by consumer advocates because of the high cost. Most banks no longer offer them.  RALs should be nearly gone from the marketplace by the end of this year.

Arkansas Attorney General Dustin McDaniel recently issued a Consumer Alert about the pitfalls of both RALs and RACs.

"We would encourage consumers to think twice before paying the excessive fees and interest associated with borrowing money that already belongs to them, anyway," he said.

Watch out for add-on fees
If after know all this, you do opt for a RAC, be on guard for extra fees added by the tax preparer. These fees are in addition to the bank charge ($30 to $35) and the cost of tax preparation.

“They can be expensive,” warned NCLC’s Chi Chi Wu. “We’ve done some secret shopper tests and found that some of these junk fees can be anywhere from $25 to several hundred dollars.”

Wu told me they’ve heard about people getting signed up for Refund Anticipation Checks unknowingly. The preparer either adds it automatically or refers to it as “direct deposit” instead of a RAC, which can be confusing.

“If the preparer asks how you would like your refund delivered, specifically ask about the fees associated with various methods,” Wu advised.

Why pay for tax preparation when you may be able to get free?
The IRS offers free preparation programs run by volunteers for low-income and elderly taxpayers. The Volunteer Income Tax Assistance (VITA) program is for those who earn $51,000 a year or less. The Tax Counseling for the Elderly (TCE) program is open to anyone, with priority given to those 60 and older.

The AARP Foundation Tax- Aide program provides free tax preparation for low-to moderate-income taxpayers (especially those 60 and older) at nearly 6,000 locations nationwide.

The IRS Free File program is available to any taxpayer who has an adjusted gross income of less than $57,000. You can prepare your return and file it online for free, giving you the quickest refund possible.

The bottom line
You’d be smart to avoid Refund Anticipation products of any kind.

If you have a bank account and you can afford to pay for the tax preparation out of pocket, have your refund directly deposited into that bank account. You’ll get the money just as quickly without paying any kind of service fee.

If you qualify for free tax preparation or filing, it would be silly not to go that route.

Finally, if you don’t have a bank account and are expecting a refund, now would be a good time to open a savings account and start building a nest egg.

More information

National Consumer Law Center: Avoid Tax-Time Refund Products

Consumer Reports: Don't be tempted by tax refund anticipation loans or checks

Herb Weisbaum is The ConsumerMan. Follow him on Facebook and Twitter or visit The ConsumerMan website.

The first tax refunds will go out in mid-February, and millions of Americans can’t wait to get that money. Last year, the average refund was about $2,700, the IRS reports. That’s more than a month’s income for two out of three taxpayers or more than three months worth of groceries for a typical family of four, according to TurboTax.

“The tax refund is a significant financial windfall, the biggest financial payday for most Americans,” said Bob Meighan, lead CPA for The American Tax & Financial Center at TurboTax. “People plan for and look forward to those refunds. It’s critically important to them, especially people living paycheck to paycheck.”

How will people use this refund money?
“Surveys show the majority of the people who receive a tax refund will do smart things with it, such as pay down debt, make planned purchases or build up an emergency savings account,” said Paul Golden, media relations manager at the National Endowment for Financial Education. “So having that tax refund can be a useful financial planning tool for some.”

A TurboTax survey found that 29 percent of those getting a refund planned to add it to their savings or retirement accounts. Another 24 percent would pay down debt; 16 percent said they needed the money to pay for living expenses.

“It’s probably one of the only and best forced savings mechanisms for many low-income households because it does allow them to save without compromising on their regular take-home pay,” Meighan told me. “They’re able to get by as it is, so this windfall really does help them in terms of managing their money.”

Is overpaying your taxes a smart way to save?
If you’re good at sticking to a budget and can pay your bills on time, don’t have expensive credit card debt and have the discipline to use that wisely, this might make sense.

Just remember, that refund is really an interest-free loan to Uncle Sam. It’s money you could have during the year to pay bills and reduce credit card balances.

“If you are scrimping to get by and piling up debt throughout the year, but getting a large tax refund every spring, adjusting your withholding to get more money in each paycheck is a better way to go,” said Greg McBride, senior financial analyst at Bankrate.com. “It will ease your financial burden and reduce your stress throughout the year.”

And consider this: If your refund is $2,700, you could have about $225 more each month in take-home pay by adjusting your withholding.

“An extra $225 is a small fortune to many people we see,” said Gail Cunningham with the National Foundation for Credit Counseling. “It can be the tipping point between financial stability and financial disaster, the car being repossessed or not, missing the rent or paying it on time.”

As of Jan. 1, the Social Security payroll tax rate went from 4.2 to 6.2 percent, so your paychecks are going to be slightly smaller. Cunningham said people who are “living on the financial edge” need to adjust their budgets or their withholding to deal with this. The IRS has an online calculator.

IRS delays filing date
Because of the last-minute deal to avoid the fiscal cliff, the IRS won’t start taking tax returns until Jan. 30, eight days later than had been planned.

But you don’t have to wait to prepare your taxes. If you use tax-preparation software, the vendor probably provides secure storage until the IRS opens its doors.

“It’s first in, first out, so we’re encouraging people not to delay filing simply because the IRS has delayed their processing,” said Bob Meighan with TurboTax. “About 85 percent of all filers will be able to file on Jan. 30.”

Herb Weisbaum is The ConsumerMan. Follow him on Facebook and Twitter or visit The ConsumerMan website.

Most taxpayers will be able to file tax returns on Jan. 30 despite the last-minute tax law changes passed by Congress as part of the fiscal cliff deal, the Internal Revenue Service said Tuesday.

The approximately 120 million taxpayers who will be eligible to file on that date includes taxpayers affected by the Alternative Minimum Tax patch (AMT) and those claiming deductions for state and local sales tax, higher education tuition and fees, and educator expenses, the IRS said.

It was feared that one of the many aftershocks of the wrangling over the fiscal cliff would be a significant delay to the start of tax season. That's because the IRS needed to reprogram computers and tax forms to incorporate the late changes to the tax code brokered as part of the fiscal cliff deal.

However, the Jan. 22 start date has only been pushed back by eight days.

Had the delay been longer, it would have put a crinkle in the plans of those who file early in order to get their refunds right away, like those who rely on the refund to pay for Christmas expenses.

In addition, had Congress not taken action on the alternative minimum tax, up to 100 million taxpayers may not have been able to file or collect refunds until late March.

Like most of the fiscal cliff fears, it appears that in the final shakedown, those too were overblown.

“We have worked hard to open tax season as soon as possible,” IRS Acting Commissioner Steven T. Miller said. “This date ensures we have the time we need to update and test our processing systems.”

For most taxpayers, waiting eight days won't matter much. But those who file more intricate returns will have to wait yet longer. The IRS has not yet announced a date for when they'll start processing forms from taxpayers who claim residential energy credits, property depreciation or general business credits. The agency predicted their systems would be ready for those taxpayers by late February or early March.

It's not the first time tax season got a late start. Changes to the tax law on Dec. 17, 2010, forced the IRS to not accept returns with itemized deductions until that February.