Errors The IRS Commit

There is a horror tale that every tax advisor can tell about errors made by the IRS on someone's tax record. As a matter of fact, literally thousands of dollars are involved in many IRS errors. When summed up, the total amounts are quite significant and large. In the year 1986, it was shown that the IRS actually assessed nearly 11.6 million penalties against American taxpayers. The total figure equated to $2.5 billion. Final figures show that nearly $890 million of the penalties where subsequently dismissed or cancelled. That's thirty-six percent of the total amount the IRS billed to taxpayers. David R. Burton, United States Chamber of Commerce in Washington's manager of tax policy calculated these figures.

Unfortunately, this isn't the sole substantial error regularly experienced from the IRS. Typically wrong about 15 to 20 percent of the time are the notices they send to taxpayers in relation to underpayment or late filing. This means that millions of people are combatting unjustified bills from the IRS who is demanding that they settle their tax liability. So if you understand that the IRS often commits errors, what do you do when you receive a notice informing you of an IRS issue?

"The first rule in replying to an IRS notice is not to assume that they are correct", according to a tax manager from New York, Jo Carole Klepack. No matter the origin or cause for an error, regardless if right or incorrect, all IRS notices include a telephone number that any taxpayer can contact if they have any questions. Unfortunately, according to Robert Israeloff of Israeloff, Trattner, & Company, "We found that accomplished very little because when you call, you speak with a clerk who isn't familiar with the case."

The best advice is to write a letter. You must make sure that you send only copies of legal documents and make sure you use certified mail or another form of delivery where it can be verified that the mail was received by the IRS. IRS notices are issued by computer systems, so you'll most probably receive several more notices before your issue is actually resolved. However, resolved through the mail are various issues.

If the IRS mistake includes a considerable amount of money, it is best to pay them a visit to address an IRS agent face to face. This is a much better choice than waiting for your letter to be read. It's also advised to get tax advice from a professional.

Most people think that visiting an IRS office will initiate them to assess their tax records further. This is false. As a matter of fact, you might be able to stop the proceedings quicker by bringing the mistake to their attention. Any enforcement effort can be ceased at once.

However, there are some rare and lucky taxpayers who actually benefit from the mistakes that the IRS commits. A simple but rare instance is when taxpayers actually receive a higher tax refund than they are actually entitled to get. Unfortunately, numerous authorities advise that you don't cash such checks as they'll possibly lead to an IRS issue later down the road. When attempting to clear up an IRS issue, it is best to be patient.