If The IRS Makes An Error, What Then?
There’s a horror tale that every tax advisor can tell about the IRS committing errors in the thousands of dollars. In 1986, $890 million of the $2.5 billion in penalties the IRS assessed were cancelled. The manager for tax policy of the US Chamber of Commerce, David R. Burton, gathered these figures.
Unfortunately, this isn’t the only substantial error regularly experienced from the IRS. The initial notices which notify taxpayers that they’ve filed late or somehow underpaid the correct amount are usually wrong about 15 to 20 percent of the time. This shows that millions of people are battling unjustified bills from the IRS who’s demanding that they pay their tax debt. So what do you do when you receive a notice and you know that the IRS typically makes errors which end up being your IRS issue?
Jo Carole Klepack, a tax manager from New York states, “The first rule in replying to an IRS notice is not to assume that they are correct.” IRS notices always include a phone number to call for any concerns, but says Israeloff, Trattner, & Company’s Robert Israeloff, “We found that accomplished very little because when you call, you speak with a clerk who isn’t familiar with the case.”
Writing a letter is the best method. You need to ensure that you send only copies of legal documents and make sure you utilize certified mail or some other form of delivery where it can be verified that the mail was received by the IRS. Before your issue is resolved, you will most probably get more notices because these are issued by the IRS computers. However, resolved through the mail are most problems.
If the IRS mistake involves a considerable sum of money, it is best to pay them a visit to deal with an IRS agent face to face. This way, you do not have to wait for your letter to be read. Seeking tax advice from a professional is also advised.
Most people think that their tax records will be further assessed if they visit an IRS office. This is false. As a matter of fact, you might be able to stop the proceedings faster by bringing the error to their attention. Any enforcement effort can be stopped at once.
Though it is an uncommon occurence, a few people may also benefit from errors made by the IRS. A bigger refund than what is entitled might be had. However, it’s recommended not cash in these checks as these may lead to more serious IRS problems. Indeed, when handline issues with the IRS, it’s advised to be patient.
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