In fact, the IRS can make mistakes too as indicated in a recently released report (11/10/10) by the GAO (US Government Accountability Office). The IRS’s internal control and financial management systems showed serious deficiencies in 2009 and 2010. Specifically, the IRS did not release tax liens in a timely fashion, had control issues with tax refund disbursements and had control issues over unpaid tax assessments & information security. The control over information security is the real kicker since the IRS has some of the most sensitive financial information of all of the government agencies.
What Does This Mean To Taxpayers?
It doesn’t mean that the IRS gave you an incorrect tax refund or was wrong in sending you a letter indicating that there was an error on your tax return. What it does mean is that the IRS makes mistakes and currently has weaknesses in their internal controls over certain areas as described in the report. That is why it is very important to double check the numbers yourself and with your accountant and/or tax attorney if you should receive a letter from the IRS or experience some other IRS issue.
Example of a Business Impacted By the IRS Deficiencies
It is quite possible that a business was penalized for supposedly not providing a supporting schedule for its quarterly payroll. But, later the IRS discovered the information was attached but was just misplaced. So, the penalty was without merit. This is just one specific case, there are many other situations that taxpayers and individual consumers may have experienced. So be sure to consult with a tax consultant if you think the IRS may have made a mistake.
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