Don't Mess With Taxes

School means tax homework for many, but some businesses already have learned some valuable lessons about money-saving corporate tax breaks.

Both these issues were explored last week at my other tax blog.

The Treasury Inspector General for Tax Administration (TIGTA) found that in the first five months of 2010 around 2.1 million taxpayers may have received $3.2 billion in improper American Opportunity Tax Credit claims.

"Based on the results of our review, the IRS does not have effective processes to identify taxpayers who claim erroneous education credits," said J. Russell George, Treasury Inspector General for Tax Administration. "If not addressed, this could result in up to $12.8 billion in potentially erroneous refunds over four years."

Meanwhile, another study revealed that the 280 most profitable corporations in the United States received a total of nearly $224 billion in tax subsidies between 2008 and 2010.

The Citizens for Tax Justice's "Corporate Taxpayers and Corporate Tax Dodgers, 2008-2010" report found that the average effective tax rate for all 280 companies in the study over the three-year period was 18.5 percent. That's less than half the 35 percent corporate tax rate that's been a popular target for reform.

You can check out my new Bankrate Taxes Blog posts on most Tuesdays and Thursdays. And if you happen to miss them there, you can find a wrap-up here each Saturday.

You also might find these items of interest:

• Take advantage of education tax credits
• Education tax credits comparison table
• Warren Buffett may want to pay more taxes,
  but his company doesn't