IRS News

IRS has done a nice job in the past few months in improving its dissemination of news releases, both through emails and on their website.  You can sign up for the email version, which I have noticed arrive a day or two before they are posted on the website.

Some interesting recent news releases from IRS:

The interest rate they charge on late tax payments is reviewed and modified every quarter to stay in line with the markets.  For the second quarter of 2003 (April through June), it will remain at 5.0%.  This is also what they pay on refunds for amended returns.  I have seen some people actually sit on filing 1040Xs in order to accrue more interest from IRS than they would be able to earn in a savings account.  Be careful that you don't wait too long and submit the refund request after the three year statute of limitations has expired.  IRS interest rates are compounded daily, which does make the effective APR (Annual Percentage Rate) a little higher than 5.0%.  It is not, as I have heard some people claim, 5.0% interest per day.  That would work out to about 1,825% APR, which is more in line with what the Sopranos and H&R Block charge.  This notice also only applies to interest and is completely separate from the various penalties IRS charges.

IRS is beefing up their educational programs to get kids started right on the road to being willing and obedient taxpayers.  The Understanding Taxes program looks interesting and seems like a very good idea.  It even includes a new type of the VITA (Volunteer Income Tax Assistance) program, which is how I first learned about preparing tax returns, back in 1975.  In fact, that hands-on experience was 100 times more educational than the textbook courses in taxation I was taking at the same time.

KMK

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 3/12/2003 03:33:00 PM Send this post: