Does the IRS make mistakes? You bet it does!

No one expects the federal government, and particularly the IRS given the large number of complicated tax transactions it reviews daily, to be perfect and avoid making any mistakes. But consider some of the recent revelations about the agency’s track record and one can’t help but feel a tinge of concern.

According to a report issued by J. Russell George, an Inspector General with the U.S. Department of Treasury, the IRS paid out approximately $460 million dollars in tax credits to at least 67,100 Americans who were not eligible to receive a first-time homebuyer’s credit. In fact, the report goes on to indicate that in approximately 47,500 instances, the taxpayers who had claimed they were eligible for the first-time homebuyer’s credit had filed returns in previous years showing that they already owned a home.

At least 67,100 overpayments, particularly given nearly 448,000 audited returns, causes one to question how these taxpayers managed to get over on the IRS. IRS attorneys and other tax professionals suggest this is a serious failure in the system requiring an immediate and massive overhaul.

If you are a taxpayer who believes the IRS may have made a mistake regarding your taxes, you should immediately consult a competent tax lawyer or other tax professional to get straight answers. Mistakes can cause you to owe back taxes, and suffer stiff penalties and interest. If you have unfiled returns, or are the subject of an IRS wage garnishment, IRS levy and/or IRS lien, a competent tax attorney or other tax professional can help you get your tax problems fixed. There are options like an offer and compromise, or a payment plan if you owe back taxes.

In the end, whether the IRS makes a mistake or not, you will ultimately be responsible for your tax liabilities. So pay close attention, particularly if you are relying on others to prepare your tax return; be honest when claiming deductions; and manage your taxes proactively. Don’t fall behind and end up owing back taxes or have unfiled returns. Procrastination is costly when it comes to dealing with the IRS. So pay close attention, be honest and proactive and you shouldn’t get into too much trouble even if the IRS does make a mistake.


Segal, Cohen & Landis
9100 Wilshire Blvd. Ste. 601E
Beverly Hills, CA 90212
(310) 285-3999

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