Recognizing the continuing disruption to the national financial markets, transportation system, telecommunication and computer networks, as well as continuing security concerns that face our nation in this time of tragedy, the IRS and the Treasury Department have issued an extension of time for all taxpayers with filing deadlines between September 10 and September 24.

For most of America's taxpayers who make quarterly estimated payments, today is the deadline for making third quarter tax payments. The biggest change that will be noticed this quarter is a slight reduction in the tax rates. Taxpayers who revise their tax calculations on a quarterly basis will want to refer to the revised tax rate schedules that reflect the changes brought about by the Economic Growth and Tax Relief Reconciliation Act of 2001.

Focusing on the immediate needs of the nation's distraught citizens, the House of Representatives overwhelmingly passed a bill that would reduce taxes on estates of Tuesday's victims and relieve their families of federal income tax for the year.In addition, any amounts received by the families of victims from the airlines and from the Federal Emergency Management Agency would be exempt from federal income tax.The Victims of Terrorism Relief Act, House bill 2884, passed with a 418-0 vote and it is assumed that the bill will sail through the Senate as well.House Ways and Means Committee

The IRS is about to make some U.S. government employees pretty unhappy. The tax agency plans to implement a phase of its Federal Payment Levy Program whereby federal employees who owe back taxes will be subject to tax levies.Affected federal employees will be subject to a 15 percent levy on their federal salaries until debts have been paid. It is estimated that nearly 9,000 federal employees owe tax debts.Federal employees who wish to attempt to circumvent the levy program by making other payment arrangements should contact the IRS at 800-829-7250.

One of the more creative things you can do with tax return preparation is donate household items to charity. Donating your used belongings is a total feel-good procedure.First, you feel good about emptying your closets and drawers of items you no longer use - the house is cleaner and less cluttered. Also, you feel good about providing useful items to needy people.

By Julian Block, attorney and former IRS investigatorThe law empowers and encourages the Internal Revenue Service to make life decidedly disagreeable for persons who intentionally fail to file their returns at tax time. The key federal statute is the Internal Revenue Code, which authorizes the imposition of severe sanctions, both criminal and civil, on those who fail to comply with our "voluntary" system.First, consider the provisions for criminal offenses.

It has been discovered that Mellon Bank employees hid and in some cases destroyed by shredding at least 40,000 federal tax returns and accompanying payments that were received at the IRS's Pittsburgh, PA lockbox this past spring.The Pittsburgh center handled tax returns for much of the northeast United States, including Connecticut, Massachusetts, Maine, Rhode Island, New Hampshire, Vermont, and parts of New York.Approximately 1,800 tax returns were

Not wasting any time finding ways to spend the $432 million Congress allocated to the IRS for purposes of getting in step with the times, the Internal Revenue Service announced plans to spend approximately $100 million on upgrading its Internet presence.Software manufacturer Vignette Corp.

The IRS has determined that the tax returns and related payments of at least 40,000 taxpayers may be missing. Affected taxpayers are primarily located in the Northeast United States and would have sent their returns to an IRS lockbox address in Pittsburgh, Pennsylvania. An earlier report indicated that approximately 1,800 taxpayers were affected.The General Accounting Office (GAO), the U.S.