IRS Payment Due Notices

As I write my third response to an IRS notice for a client on this grand afternoon, I wanted to take the time to remind all of our clients about the new, improved, computer age nature of the IRS (can you sense the sarcasm?). Over the past several years, the IRS has taken great strides to automate their systems. With automation comes less human touch. Which leads me to today’s discovery.

A client sent me a notice they had received with the amount of tax due being considerably higher than what was reported on the tax return. I looked and looked and looked, but had no clue how the IRS was coming up with the amount of tax due. I picked up the phone and dialed the IRS. As I dialed, I was still gazing at the amount due on the notice and my copy of the tax return. I noticed that my return showed $462 due, and the IRS showed $4652 due, and that 3 of those digits happened to match (suspicion mounts that a computer read the number from the return incorrectly). After reaching the IRS, the assisting agent mentions that there appears to be a math error in return filed. The tax due doesn’t match the lines that it should be summing. I politely ask whether he is observing the actual filed tax return, or the computerized IRS summary of the return. He stated that he is observing the computerized summary of the return, and can’t view the actual return filed.  I explained that the computer system’s return doesn’t match what was filed. The agent requests that we respond to the notice with a copy of the original return and an explanation of the IRS computer error, so that they can correct their system.

Obviously, this scenario is one of the simplest errors that can be made by the IRS, but it really reinforces the point I want to make today: the IRS sends many automated notices of amounts due. Few are actually correct. If you happen to be the lucky recipient of such a notice, please send it to your tax preparer for review. Never pay the notice without having it reviewed!