Posted by Fred Lake

Five Costly Mistakes People Make When Dealing with the IRS

Five Costly Mistakes People Make When Dealing with the IRS

Some people have no issue dealing with the IRS. Every year, they file their tax and either send in their balance later or get their refund. However, this is not the case with many people as dealing the Uncle Sam comes with challenges.

The challenges could be due to mistakes from you or the IRS. It might also come due to an audit or when you cannot pay your balance. You need a good idea of your rights and rules to follow to handle the IRS successfully.

Here are the biggest mistakes many people make with the IRS.

  1. Leaving Your Mail Unopened

The entire world has transcended to a digital world, and mail is gradually becoming obsolete. However, the IRS prefers the old ways of doing things and will likely send you letters for every vital information.

The mailbox of most people contains junks; hence they hardly check it.  Many people, out of the dread of what Uncle Sam has to say, avoid opening any mail from the IRS. Ignoring correspondence from the IRS, however, will not make any problem go away. Worse still, you accrue interest, penalties and lose out on some of your rights.

  1. Thinking You Can Handle the IRS without help

You are already dealing with hefty tax bills. Why will you hire a pro and accrue additional fees? It makes no sense, they assume!

This is the mindset of many people that end up costing them a lot in the long run. No matter how friendly and helpful IRS agents are, their main goal is to get their balance from you and close your chapter asap. It is not their job to give you advice or make available your options to you.

When you hire a pro, you will pay. But they are the ones that have your best interest at heart, not the IRIS agents. 

  1. Allowing the IRS to Prepare Your Return 

For people that haven't filed a return in many years, the IRS will prepare an SFR (Substitute for Return). When they do this, you will have to pay whatever balance they throw at you.

If you think they have saved you the stress of filing your tax? Think again; it is not necessarily a saving. Whenever IRS files an SFR, it doesn't come with deductions and dependents. Your return might be filed with a Single status, whereas you qualify for head of Household. You also will not enjoy deductions like medical bills and charitable deductions; hence the sections will be blank.

With this, there is a huge chance you will owe more if Uncle Sam files your return. The silver lining, however, is that you can amend an SFR. Get in touch with a professional and modify it.

  1. Not documenting Everything 

The IRS is a large organization that is not allergic to mistakes. Mails could be missing, and applications of payments could be wrong. When this happens, your record of all correspondences and conversations will be your savior.

Make sure you have copies of all letters and documents from Uncle Sam. Keep a copy of all receipts made, revealing the payment confirmation number. For all agreement you make with the IRS, have writing to back it up. These could come in handy someday.

  1. Accepting Everything the IRS throws at you.

Unknown to many people, IRS assessments like interest and penalties can be challenged. Some laws explain your right to appeal IRS decisions alongside how to do it. Hence, whenever the IRS sends a report explaining an adjustment to your appeal, you can challenge this.

You will not have to go to court as there can be an appeal conference. This involves a meeting between you and the IRS presided over by an impartial officer intending to settle a dispute. There is the provision to hire a pro to represent you before the IRS provided the fellow is authorized to practice before the IRS. CPAs, attorneys, and enrolled agents only can represent you during the appeal process.


You might have made any of those mistakes when dealing with Uncle Sam. That is, however, not the end of the world. You could have options to resolve your tax issues. Your success hinges on taking immediate action and working with a licensed professional dealing with the IRS.

When it comes to enforcing laws and collecting tax levies, the IRS is a highly authorized entity. You, however, have rights as well. Your knowledge of these rights will help you when relating to the IRS. 

Fred Lake
Contact Member