by I. David Waxman

Introduction

Dealing with the IRS isn’t anyone’s idea of fun. But mistakes happen, and when they do, you need a roadmap to get them corrected. Below are common issues taxpayers run into, followed by practical steps to resolve them.

1. Common IRS Problems

• Erroneous tax assessment – The IRS incorrectly assesses additional tax you don’t owe.
• Missing refund checks. The IRS sent the refund, but you didn't receive it (also see IRS form 3911).
• Misapplied tax payments
  • Posted to the wrong tax year
  • Posted under the wrong taxpayer (for example, the “spouse” on a joint return pays under their own SSN, and the IRS refuses to apply it to the joint balance).
• Penalty relief requests – If you missed a filing or payment deadline, you may qualify for a first-time penalty abatement if you’ve been compliant for the prior three years.
• Data entry errors – Wrong SSN, filing status, or other clerical mistakes.
• Disaster relief claims – Special rules extend deadlines if you’re in an area covered by IRS Notices (e.g., for residents of Israel seeking war relief, see IRS notices 2023-71, 2024-72).
• State tax issues – Sometimes it’s not the IRS but your state. Example: you list a New York address on your Form 1040 while living abroad, and New York issues a bill. The IRS shares data with the states, so you may need to call the state revenue department directly.

2. How to Fix the Problem

Step 1: Review Your IRS Records

Get your account transcripts from IRS.gov. (See our guide on registering—spoiler: it’s not simple.) Review wage & income, account, and tax return transcripts carefully for discrepancies.

Step 2: Establish a Written Record

Send a written explanation to the IRS.

• This won’t guarantee resolution, but it documents your good faith effort.
• You can use AI tools (ChatGPT, Claude, Copilot, Gemini, etc.) to draft, but always review and edit for accuracy.
• Mail the letter to the address on your notice, or fax it to +1 681-247-3101 (international fax). Include a copy of the notice.
• Keep a copy - this is important for establishing that you are doing your due diligence to resolve the conflict through normal channels before escalating.

Step 3: Call the IRS

• For international taxpayers: +1 267-941-1000 (6AM–11PM ET).
• Call at opening time for the shortest waits.
• Expect to spend 1–2 hours. This is for the wait time, verification process, and time on hold while they review your records.
  • 💡 Pro Tip for Sanity Put your phone on speaker — but set the volume just high enough that you’ll hear when a live person finally answers. The IRS hold muzak and repetitive messages are mind numbing; too much exposure can drive even the calmest taxpayer to the edge.
• Have your return and ID info handy (SSN, DOB, address). If you miss a question, they won’t help you.
• Be polite, explain the issue clearly, and hope for a sympathetic rep. Some fix problems immediately; others don’t.
• Afterward, write up your notes and send a summary to the IRS by mail/fax for your records. See notes above on Step 2.
  • 💡 Extra tip: Hope for the best, but be prepared for the worst—whether dealing with the IRS or life in general. Occasionally, you'll reach a representative who listens with empathy and genuinely tries to help. Others may respond with indifference, showing little concern for your issue or the time you spent waiting. Most fall somewhere in between. Do the best you can with whoever you're dealing with.

Step 4: Wait and Recheck

While IRS representatives often estimate 30 days for corrections, allow 60-90 days for processing before following up. Then check your transcripts again. If the correction shows up—victory! If not, got back to step #3 and repeat the process. Give it another 60 days, and the it is time to escalate.

Step 5: Escalate to the Taxpayer Advocate Service (TAS)

• File Form 911 by mail or fax.
• If your case is accepted, TAS will request supporting documents (often ones you already gave the IRS). Provide them promptly.
• TAS is swamped, so getting an advocate assigned is a big win.

Step 6: Contact Your Senator or Representative

If TAS doesn’t help, reach out to the last state where you lived. Congressional offices only assist constituents. Visit their website and look for the IRS casework request section.

Other: Respond to a Statutory Notice of Deficiency

This is the IRS formally saying you owe more tax. You can:

• File a petition in Tax Court (even without a lawyer, “pro se”). Court fee is $60.
• IMPORTANT: The deadline is 90 days from the date of the assessment if you live in the USA. If you live outside the USA (like most of our clients), then the window is 150 days. The tax court has zero flexibility. If you miss this deadline, then this door closes permanently.
• The IRS will transfer the case to Appeals, where you can negotiate.
• If Appeals fails, work directly with IRS Counsel.
• If that fails, a Tax Court judge decides. (Most cases settle before then.)
• Tip: You can engage a CPA or Enrolled Agent to represent you after you file the petition.

Other: File an Amended Return (Form 1040X)

• Amended returns require a formal IRS response, unlike letters or phone calls.
• This is another option that could be implemented at any point.
• Processing can take up to two years.

Getting Ahead of the Curve

When the IRS makes an error, the path to resolution is often uneven. Most taxpayers never push back, which means the Service rarely corrects mistakes unless pressured. By leveraging the right resources, you can move your case forward faster than most people do.

The reality is that with each escalation step, fewer taxpayers follow through:

Takeaway: If you’re proactive and willing to escalate when necessary, you stand out from the majority who simply give up. That persistence can make the difference between years of waiting and a timely correction.

Final Thoughts

IRS conflict resolution is a marathon, not a sprint. Start by gathering your records, documenting every step, and escalating strategically. With persistence—and sometimes a little help from an advocate, attorney, or member of Congress—you can usually reach a resolution.

Disclaimer: This article is for educational purposes only and does not constitute legal, accounting, or tax advice. Every taxpayer’s situation is unique. The article could include errors and/or outdated information. You should consult a qualified tax professional before taking any action based on the information provided.

Last updated: September 10, 2025. IRS rules change; verify on IRS.gov.

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The initial audit letter includes two important sections:

1. Tax Adjustments. Form 4569 adjusts the various items on the tax return. The report will typically reverse any credits while leaving tax liabilities in place. Added to this will be an automatic 20% penalty plus interest. This typically results in a substantial tax bill. Remember, this is only an initial report and the adjustments, tax liabilities, penalties and interest can be reversed if the taxpayer complies with the Information Document Request to the satisfaction of the auditor. This approach can be summarized as “prove it or lose it”.
2. Information Document Request. This form details the documents that the auditor demands in order to substantiate the credits that were initially reversed (as detailed above). Requested documents often include:.

Issues of particular scrutiny include:

1. Citizenship: The IRS will scrutinize the date of citizenship of children claimed as tax dependents. If the child acquired citizenship after the tax year in question, then the IRS policy at this time is to disallow the child dependent.
2. Earned income and foreign taxes paid: The “additional child tax credit” requires that the taxpayer report earned income to qualify for the refundable credit. The auditor will demand documentation to support the Line 7 entry of Form 1040. This can include annual wage summary from home country, pay slips, bank statements showing salary deposits and statements from the employer or employment contracts.
3. Support of dependent children: The auditor will use documents such as the birth certificates, school records, utility bills and government ID cards to determine residence and support of the child dependents.

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These packets (sent in duplicate in his and hers editions) include scary notices (form 4549) of amounts due for tax corrections, penalties, and interest. Please note that these notices are only warnings about what will result if you, the taxpayer, fail to respond with the requested documents (see form 4564). In other words DON’T PANIC. Many of us will panic despite my admonition, but just keep in mind that the worry is optional.

If it makes you feel better, know that I myself have the privilege of receiving extra attention from our friends in the Greensboro N.C. field office of the I.R.S. So I am in the trenches right alongside of our clients. The good news is that we have much experience in handling these audits and have established good working relationships with the responsible I.R.S. officers.

With all things bureaucratic, documents will make or break your case. Anything on your filing that requires verification (which is everything on your filing) requires an appropriate document to back it up. One item of particular scrutiny is the citizenship of the children. While in general copies of documents will suffice for their purposes, they are currently demanding ORIGINAL copies of the children’s citizenship document. For children born in the USA this is the birth certificate. Otherwise, it is either the consular report of birth abroad or a certificate of citizenship. Personally, I despise this requirement. After all, who the devil wants to part with such valuable documents? Nonetheless, taxpayer’s don’t have much alternative than to comply with the request. The I.R.S. officer will return your original documents. Other documents required for submission are listed below. Any document that is not in English will require translation by a professional translator. We work with several of these translators.

Documents to gather for an I.R.S. examination:

• Birth certificates (Misrad hapanim will issue with English on request)
• Certificates of birth abroad (issued by the consulate) or certificates of citizenship (issued in USA)
• USA passports for all family members (if available)
• USA birth certificate or CRBA of parent
• SSN cards
• ITIN letter
• Confirmation of income and taxes paid (tofes 106 and doch sh’nati if available)
• Pay stub
• A bank statement that shows the salary deposit and matches the pay stub
• Employment contract or statement from employer specifying employment dates and responsibilities and work hours, including name, address, and telephone number of employer
• Teudah Zehut showing parents’ names, children, and home address; make sure that the sefach is signed.
• Doctor/school letter
• תמצית רישום – for parent(s) + each dependent child
• Marriage certificate (and divorce certificate if relevant)

Also see this article by my friend Simon Jackson Esq: http://www.jacksonadvocates.net/how-to-survive-an-irs-audit-in-israel/

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As we get ready to kickoff the 2013 tax season in less than two weeks, the most common inquiry from
taxpayers seems to be: “But I still haven’t received my 2012 refund”? In a recent trend that has
infuriated taxpayers and tax preparers alike, the IRS has in many cases drastically delayed the issuing of
tax refunds. While taxpayers are still required to timely submit their 2013 tax filings, the IRS is taking its
time in issuing many outstanding refunds.

According to an independent taxpayer advocacy group, the increase in delayed refunds is a direct result
of the IRS intensifying its efforts to prevent identity theft. The IRS expanded the amount and types of
filters used to catch potential fraud and find false tax returns. In 2013, the IRS rejected or suspended
nearly 5 million suspicious tax returns, up almost 400% from 2012. Around ninety percent of the
“suspicious” tax returns were eventually deemed legitimate, after the refund had been delayed for
months. While the IRS attempts to resolve all identity theft cases within six months, it often takes closer
to a year to close a case and correctly issue the refund.

Other factors that cannot go unnoticed – as much as the IRS hopes it will – are the furloughs and
spending cuts. While the IRS insists that recent budget cuts have not caused delays in processing
returns, it seems to be an obvious factor in the IRS having issued 1.5 million fewer refunds as of May
2013, as opposed to the same time in the previous year. According to the National Treasury Employees
Union, the IRS’ budget has decreased in the last two years by almost $1 billion with 8,000 fewer
employees. In addition, hiring freezes and multiple federal furloughs inevitably resulted in further
processing delays.

While the IRS continues to deny that having fewer employees and working fewer days is not a cause in
delaying returns, it certainly seems that this would be a factor.
While an increase in identifying fraud would be an understandable reason to delay refunds, the
disappointing “success” rate certainly calls into question whether the new tactics are doing more good
than harm.

For many clients, the fact that they will eventually receive their refunds – plus a relatively generous
interest rate – serves as little consolation for the powerless feeling of someone else withholding their
money. Other taxpayers are not appeased when told “misery loves company” and that many people are
in similar, fortuitous positions. Probably least reassuring is that the IRS recently announced for 2013
electronically filed tax returns, the refunds will no longer be issued in five to seven days as in the past.
Now the average time for “non risk” returns will be 14 days and “high risk” returns will be 28 days
(unless pulled for Examination). In other words, things could get worse before they get better…

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