LBMC

With the passing of the 2006 year end we at LBMC would like to remind our business clients of an important issue as they being to prepare their 2006 tax filings.

The IRS requires taxpayers that file more than 250 informational returns (Forms W-2,1098, 1099,5498) to submit their filings either electronically or magnetically (tape). Generally, these forms must be filed with the IRS by February 28th. Taxpayers required to file electronically are also required to apply for approval to submit returns. These are often similar requirements for state W-2 filings.

Substantial Penalties for Non-Compliance

Taxpayers that are required to file electronically but fail to do so are subject to substantial penalties. Currently the penalty is $50 for each return exceeding the 250 form threshold amount.

LBMC's Recommendation

Given the significant cost associated with non-compliance we encourage our clients to evaluate their number of informational filings to insure they are not required to file electronically. Clients may also consider using the electronic option in anticipation of being required to do so.

Clients can contact the LBMC Tax Department or LBMC Employment Partners for assistance with the preparation of filings, as well as evaluating whether they are subject to the electronic filing requirements.

For additional information on this issue clients can contact Bryan Ray with LBMC Employment Partners at (615)-309-2400.

For additional information, please contact us at:

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