Why gas prices rise

NATURAL GAS PRICES COULD RISE FOR WINTER

Production costs can change quickly, and natural gas prices are no exception. That expense is a component of the cost of grain drying and home heating. But natural gas prices are most prominent in fertilizer costs as an ingredient for anhydrous ammonia.

The futures market for natural gas is described in terms of dollars per million metric thermal units. That price was about $4.75 at press time. Compare that to last spring's $6-plus per million metric thermal units.

We could be primed for another jump in price, say numerous experts. "We are not seeing the growth in production in the U.S. to meet what we have in the growth of consumption," notes Matthew Roberts, an ag economist at Ohio State University.

A harsh winter could drive natural gas costs considerably higher. For comparison, each dollar rise in the price of natural gas on the futures market translates into another $35 per ton for anhydrous ammonia.

Fear of Amending

We occasionally hear from people who are hesitant to file an amended federal tax return (form 1040X)-even to get a refund due. That's because they fear such a filing puts them at greater risk of an audit.

Not so, say IRS officials. The agency has to process millions of amended returns every year and can't possibly audit all of them.

Still, an amended return in which you attach an explanation as to why you are entitled to a refund does require the scrutiny of someone. That's why even this editor has balked at filing an amended return that would have only meant an additional $100 to $200 refund. If you have much more money involved, however, go for it.

Lost Records Cost IRS

The agency was told by the court that it had to pay $179,000 for the re-creation of the tax records it lost for a particular taxpayer. The taxpayer was involved in a dispute with the IRS.

Apparently, IRS officials accidentally erased a company's computerized tax records. The company had to hire experts to reconstruct those records, but they were billed $179,000.

The agency objected that the entire cost was excessive because only a small portion of the taxpayer's records were actually used at trial. As a result, IRS officials believed they should only have to pay for recovering the needed records.

The court disagreed, saying that all of the records needed to be recovered and scrutinized to even know which ones would be relevant at the trial. The citation for this case is Trigon Insurance Co., ED Va. Civil No. 3:00cv365.

Des Keller

Business Editor