Since the IRS processes over a one hundred million tax returns from individuals and businesses each year, it's only fair that they be entitled to a few mistakes. When the mistake is on your return, however, you may not feel so giving! Fact of the matter is the IRS may make up to ten million errors this year, and one of them may affect you! Most of these errors occur for simple and recurring reasons and knowing where the IRS is coming from in making their claims can help you to rectify the situation.
Wrong Social Security Number - A data processing clerk may type in your social security number incorrectly, or you may have been assigned more than one number. Problems also occur when filing jointly for the first time or filing separately after having filed jointly the previous year. All data on a joint return is recorded under the Social Security number of the spouse whose name is first listed on the return, therefore payments and credits made by the second spouse may not be posted under the first spouse's Social Security number and therefore may be overlooked. This can be a cause of problems for you regarding mistakes made to your return.
Wrong Income - Income earned by someone other than you may mistakenly be reported under your Social Security number. This often happens when you open a bank account for a child or another relative and they use your Social Security number.
Lost Return - If the IRS or the US Postal Service loses your return and payment, it is your responsibility to make sure you have a copy to provide them. This is one of the many reasons we suggest electronic filing. The chances of this situation occurring when you file electronically are greatly reduced.
Misapplied Payments - Payments are sometimes posted to the wrong year or the wrong tax type. The IRS also may not have posted tax payments you made to your account. There is also the possibility that the IRS did not properly post overpayments from a previous year.
Incorrect 1099 - There is always the possibility that the IRS received Form 1099s from businesses or banks reporting income that does not belong to you at all, or the wrong income was stated.
Partially Corrected Error - The service center may have corrected a previously discovered mistake on their part, however, they may not have removed the interest and penalties that they had charged you due to their mistake.
Exempt Income - Sometimes income, such as money you earned on your IRA, Keogh, pension account or from municipal bond interest that is not taxable, is mistakenly reported as taxable income.
Misunderstood Date - Computers at the service center may not acknowledge that the due date for filing or paying taxes was actually on a legal holiday or weekend, and that even though you filed by the first business date after the holiday or weekend, may consider your payment late. You may have also previously filed for an extension and gotten it, yet still be considered late unfairly.
Double-Counted Income - As silly as it sounds, sometimes the IRS moves income from an incorrect line to the line where it should be, but forgets to remove the income from the line where it was initially and incorrectly entered.
Data Processing Error - Sometimes someone at the IRS forgets to input all of your information from your attached schedules into the IRS computer. A technical glitch may have also occurred which caused you to receive a notice saying that a math mistake had been made on your return when in fact it had not.
