TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Thursday, August 25, 2011

TIGTA: IRS Made Math Errors in 17% of its Taxpayer Math Error Adjustments

TIGTA The Treasury Inspector General for Tax Administration yesterday released Some Taxpayer Responses to Math Error Adjustments Were Not Worked Timely and Accurately (2011-40-059):

Most (98.4%) of the approximately 8.6 million math error notices were agreed to by the taxpayer.  However, our review identified that some responses in which taxpayers disagreed with the math error notices were not worked timely or accurately.

Our review of 260 taxpayer responses worked by the IRS between January 1 and July 23, 2010, showed 104 of the 260 responses were not worked timely.  TIGTA estimated that 12,232 taxpayer responses may not have been timely resolved during the period January 1 to July 23, 2010.

In addition, TIGTA found that 43 of the 260 responses reviewed were not worked accurately.  TIGTA estimated that 17,627 taxpayers may not have had their responses resolved accurately during the period January 1 to July 23, 2010.  In addition, TIGTA estimates inaccuracies could result in approximately $39.5 million in lost revenue to the Federal Government and approximately $29.2 million in tax benefits that taxpayers will not receive over the next five years.

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All this says to me is that the tax code is so complicated that even the IRS does not understand it.

Posted by: Willy | Aug 26, 2011 8:12:53 AM

Heh. I got a notice earlie this year for my 2009 return. I'd missed a 1099 form, and the IRS wanted $800 extra in tax and penalties, mostly because the extra income amount pushed us over the ceiling for some deductions. BUT ... when I got a copy of the 1099 it was immediately obvious they had made a transcription error, adding a digit to the income received amount, making the missing income ten times what it really was. Instead of $800 owed them, they ended up owing us $200.

Which made me wonder -- do they send out notices when you screw up and they owe you? Not that I've ever seen.

Posted by: Tully | Aug 26, 2011 8:58:41 AM

At least the errors seem to be going both ways. I always worry when all the "errors" happen to be in favor of the person making the error.

Posted by: Clark Taylor | Aug 26, 2011 9:05:17 AM

Maybe if the IRS would let its people work without their shoes on, this sort of thing could be avoided.

Posted by: Jeff H | Aug 26, 2011 9:33:55 AM

Also, even though it ends in -ly, "timely" is an adjective, not an adverb. So that's a big fat fail in two of the three Rs.

Posted by: Dan | Aug 26, 2011 9:55:06 AM

If we made any errors that happened to be in the taxpayer's favor 'protective', we would be surprised to see how quickly the error rate dropped to zero.

Posted by: theBuckWheat | Aug 26, 2011 10:42:02 AM

Dan, I thought that, too. And I always heard it used as an adjective growing up. But MW says it was used as an adverb as early as the 12th century:

Posted by: Ben | Aug 26, 2011 2:56:12 PM

Tully - yes - one year I got about a thousand back because I had messed up on some sort of qualified interest line.

Posted by: Jonathan | Aug 26, 2011 6:44:45 PM