What If The IRS Makes A Mistake?

Nearly every tax professional who's worked for a few years will tell their own horror story when it comes to the IRS committing a mistake with someone's taxes or tax record. As a matter of fact, virtually thousands of dollars are involved in most IRS mistakes. When summed up, the total figures are considerably significant and large. The IRS assessed nearly 11.6 million penalties in the year 1986. The total amount amounted to $2.5 billion. Nearly $890 million of these penalties were dismissed eventually. That amounts to thirty-six percent of the total amount that was billed to American taxpayers. These amounts were gathered and calculated by the manager of tax policy for the United States Chamber of Commerce in Washington, David R. Burton.

Another error the IRS regularly makes about 15-20% of the time is the serving of notices to taxpayers in relation to late filing or underpaid taxes. This means that millions of people end up battling with the IRS for unjustified causes. If you receive an IRS notice and know that they are committing a mistake, what do you do?

"The first rule in replying to an IRS notice is not to assume that they are correct", says New York tax manager Jo Carole Klepack. Though a phone number is printed in IRS notices for any concerns, "We found that accomplished very little because when you call, you speak with a clerk who isn't familiar with the case", says Robert Israeloff of Israeloff, Trattner, & Company.

Writing a letter is the best method. You need to ensure that you can verify that the IRS got the mail by sending copies of legal documents through certified mail. IRS notices are issued by computer systems, so you will most probably get several more notices before your problem is actually resolved. However, most issues are resolved via the mail.

If the IRS error involves a considerable amount of money, it's 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. Seeking tax advice from a professional is also ideal.

Most people assume that visiting an IRS office will encourage them to assess their tax records more. This is incorrect. You will be bringing the discrepancy to their attention, and you may be able to cease the proceedings faster. It's a quicker option to get them to freeze any effort at enforcement.

Though it's an uncommon occurence, some people may also benefit from mistakes committed by the IRS. A bigger refund than what's entitled might be received. However, this may lead to bigger IRS issues, so it's best not to cash these checks. Indeed, when dealing with problems with the IRS, it is advised to be patient.

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