There's a horror story that every tax advisor can tell about mistakes committed by the IRS on somebody's tax record. As a matter of fact, numerous IRS errors cost or involve literally thousands of dollars. The total amounts are considerably substantial when added up. In the year 1986, it was documented that the IRS actually assessed almost 11.6 million penalties against American taxpayers. The total amount equated to $2.5 billion. Almost $890 million of these penalties were dropped eventually. That is 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 gathered these figures.

Unfortunately, the IRS makes other considerable mistakes aside from this. Usually wrong about 15-20% of the time are the letters they serve to taxpayers in relation to underpayment or late filing. This shows that the IRS is unjustifiably demanding millions of people to pay their erroneous tax liability. So what do you do when you receive a notice and you are aware that the IRS typically makes errors which end up being your IRS problem?

Jo Carole Klepack, a tax manager from New York says, "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 contact for any questions, 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."

Penning a letter is the best method. You should make sure that you can verify that the IRS received the package by sending copies of legal documents via certified mail. IRS notices are issued by computer systems, so you'll most likely get many more notices before your problem is actually resolved. However, most issues are resolved through the mail.

If the IRS error involves a significant amount of money, it is best to pay them a visit to deal with an IRS agent personally. This way, you do not need to wait for your letter to be read. Seeking tax advice from a professional is also advised.

Many people assume that the IRS will examine their tax records further if they visit an IRS office. This isn't the case, and in fact, visiting an IRS office in person may enable you to stop proceedings much faster, or simply bring the error to their attention which will cause them to decide if they'll freeze enforcement efforts until the issue is totally resolved one way or another.

Though it's a rare occurence, some 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 severe IRS issues. Yes, it is recommended to be patient when dealing with IRS problems.