17 May, 2008

IRS charges 104% interest

Even I was surprised to calculate this.

The Truth:  I have been audited three times in my life since 1963 when I first filed income taxes.
Once I got $20 back, once $4,000+ and this last time I owed $300.  All were honest errors.
Now, as you can see, I am not complaining, especially considering the $4,000 "refund" a few years ago.

This time, there was a $26 interest charge for each month (if paid by May 28th).  The notice was dated 28 April.  Lets do the math:  26 x 12 months = $312 for the year (non compounded);
divided by the principle, $300 yields a whopping 1.04 or 104% for the year.