What If The IRS Makes A Mistake?

There is a horror story that each tax professional can tell about errors committed by the IRS on someone's tax record. As a matter of fact, most IRS mistakes cost or involve virtually thousands of dollars. The total figures are quite substantial when added up. In the year 1986, it was shown that the IRS basically assessed nearly 11.6 million penalties against American taxpayers. This was approximately $2.5 billion. Nearly $890 million of these penalties were dismissed eventually. That amounts to 36% of the total amount that was billed to American taxpayers. These figures were gathered and calculated by the manager of tax policy for the US Chamber of Commerce in Washington, David R. Burton.

Unfortunately, this is not the only substantial mistake constantly experienced from the IRS. The initial notices which notify taxpayers that they've filed late or somehow underpaid the correct amount are typically erroneous about 15-20% of the time. This shows that millions of people are battling unjustified bills from the IRS who is demanding that they pay their tax liability. So if you understand that the IRS typically commits errors, what do you do when you receive a notice notifying you of an IRS issue?

"The first rule in replying to an IRS notice is not to assume that they are correct", says a tax manager from New York, Jo Carole Klepack. Taxpayers can contact the telephone number printed on all IRS notices, whether the mistake is true or wrong. 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."

Penning a letter is the best method. You should ensure that you can verify that the IRS got the package by sending copies of legal documents via certified mail. IRS notices are issued by computer systems, so you'll most likely receive several more notices before your issue is actually resolved. But resolved through the mail are many issues.

Paying the IRS a visit to deal with an agent face to face is best when the mistake includes a significant sum of money. This way, you do not need to wait for your letter to be read. Getting tax advice from a professional is also ideal.

Many people assume that visiting an IRS office will encourage them to examine their tax records more. This isn't true. You will be bringing the mistake to their attention, and you may be able to stop the proceedings sooner. It is a quicker option to get them to cease any effort at enforcement.

A few people may also benefit from IRS errors, though this is quite uncommon. A bigger refund than what's entitled might be had. But it's advised not cash in these checks as these may lead to more severe IRS problems. Yes, when addressing problems with the IRS, it's best to be patient.