Incorrect IRS Notices

Remember back at the end of tax season when we were happy with the IRS’s performance? Yeah, that was a good time.

And now it feels like a long time ago.

A recent gaffe by the agency resulted in mailing out collection notices to taxpayers in disaster areas demanding that they need to pay a bill when they were supposed to have been given extra time to do so. And these people do have that extra time and do not yet have to pay. In fact, National Taxpayer Advocate Erin Collins addressed the issue by pointing out that the fourth page of the notice essentially tells taxpayers that they can ignore the first three pages.  But when you first read three pages saying you owe the IRS some money …

This mistake happened as some areas of the country are enduring record heat waves and widespread flooding flows through others. States from California to Florida have qualified disaster areas, so this isn’t something that is localized. Those times are trying enough for people, and I think everyone agrees that receiving a note to pay something to the IRS never arrives with complete comfort and just piles on the worries.

But even through this, there are a couple of lessons that can be learned.

No matter how big, scary, and in charge it seems, the IRS is not infallible. In fact, it is so not infallible that this is by far not the first time it has made a mistake. And you are not going to receive anything from the agency through the mail that requires you to respond to it in super rapid fashion. You have the time to investigate it if you feel it is mistaken.  And in this situation, confirming the status of a disaster area would have established you are correct (and maybe even then given you the impetus to comfortably read through your notice and get to that mystical fourth page that contained the real information.)

Of course, the fact that the IRS gives some leeway to a disaster area is a piece of news that could easily pass someone by as, you know, they deal with actual disaster. Or maybe you heard about it at the time, then received such a notice, and thought that the extra time could have been rolled back, the deadline has actually come and you misremembered the date, or whatever other reason that makes you think a professional agency is doing its job correctly. At that time, it can also be worth taking the effort to consult a professional who can help you get to the correct answer.

Warmly,

Josh Bousquet
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