Thursday, July 3, 2008

Tax Tip of the Week

Tired of trying to keep up with all of the legislation changes in the IRS tax code? Feel like you don't understand some of the laws and the ones you do understand change every year? Well, here is your weekly tax tip on a new penalty you may want to be aware of if you file your own taxes.

If you file a claim for refund or credit of income in an excessive amount without a reasonable basis for the claim you will encur a penalty. This penalty can apply to any claim made after May 25, 2007. This penalty does not apply to any amount that a fraud penalty or accuracy-related penalty has been applied.

So the bottom line is if you are not sure about income credits or refund claims on your tax returns consult a proffesional tax advisor. It is better to pay for the advice up front than pay any penalties to the IRS for errors on a tax return. The penalties will cost even more and if not taken care of immediately will lead to loss of time and money as you attempt to resolve the debt over time.

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