IRS notice? Don’t pay just yet!

Unless you filed an extension or are one of those kooks that have come up with some justification why the US Constitution doesn’t allow the federal government to levy an income tax, you have probably already sent in your tax return for this past year. If you are unlucky, you may get a nice letter from the blood-sucking IRS that there was an error on your return and you owe them more money.

However, as this article from MarketWatch illustrates, don’t be so quick to just write a check to make the problem go away. Turns out that the IRS has sent out quite a few notices in error, particularly from the service centers in Ogden UT and White Plains NY. Most of the reported issues so far have been related to “unreported” income from state and local income tax returns when including state and local tax payments in itemized deductions, but then having to back those payments out from allowed deductions due to being subject to the AMT.

Moral of the story: just because the folks at the IRS are evil doesn’t necessarily mean they are smart. Double-check any notice you receive claiming you owe additional taxes, and if you are right don’t hesitate to fight it.

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