In its efforts to stop tax cheating, the IRS (Internal Revenue Service) doesn’t go easy on taxpayers—sometimes fining millions of dollars for a simple mistake.
- The IRS can sometimes be harsh in its punishments—charging taxpayers for minor mistakes.
- A simple misstep, such as filing a 1040 tax form late, can result in a charge of up to 47.5% of the tax owed.
- If a taxpayer pays every year on time and the correct amount but doesn’t realize another form needs to be attached, the IRS can charge for the paper missing, and each year it was missed resulting in millions in fines.
- In 2021, the IRS collected $37.3 billion in civil penalties resulting from tax mistakes or unpaid taxes.
Why it’s news
Many forms are required when filing taxes, and one misstep can result in millions of dollars in fines from the IRS.
If a single form is missed when filing taxes, the IRS can charge millions of dollars in fees, and some citizens attempt to fight in court with little luck.
In some cases, taxpayers realized they had not been submitting a needed form and contacted the IRS to apologize, and the ordeal ended with the IRS suing them for millions of dollars.
Some taxpayers have gone to court over being sued by the IRS and cite the Eighth Amendment’s prohibition of “cruel and unusual punishments” and “excessive fines.” Still, more often than not, the court agrees with the IRS, leaving the taxpayer to give up millions.
“Usually, the taxpayer has to pay first and then litigate in District Court or the Court of Claims, which is very expensive. The average citizen cannot afford to fight the IRS in court,” says lawyer Elizabeth Atkinson.
Many U.S. citizens use an accountant to file taxes to omit all mistakes and get everything turned in correctly and on time. Sometimes accountants are unaware of all the correct forms needed for certain things and miss a form.
The IRS and typically the Supreme Court as well that the taxpayer should still pay the fines regardless if someone else made the filing mistake.