Tax Debt Relief

It Was an Honest Mistake!: Does the IRS Forgive Honest Mistakes?

February 28, 2019

Let’s face it: taxes are complicated

As tax season rears it’s ugly head once again, many across the country are gearing up to work through piles of paperwork and complicated accounting procedures.

There is no getting around the fact that tax laws can be difficult to wrap your head around. You try and do your best and submit your return to the IRS with no mistakes. But are you ever really certain that you’re 100% clear and correct in your calculations? 

Many people get nervous about doing their taxes for this very reason. What happens if you do slip up on your tax return and make a mistake? Does the IRS possess the power to forgive? Read on, and we’ll fill you in on everything you need to know about tax mistakes. 

Common Errors When Doing Taxes

There are a thousand places where you can accidentally go wrong when doing your taxes. Common mistakes on tax returns include incorrect or missing social security numbers, computation errors, or simply putting information in the improper place. 

Other common slip-ups during tax season? Making claims without an expenses receipt, claiming deductions for the wrong year, or forgetting to include a certain W2 or 1099 form.

Most of these kinds of mistakes are easy to miss. When it comes to these kinds of small mistakes, the IRS is generally very forgiving. The IRS even can fix small math errors for you, or accept late forms that might have been lost in the shuffle. 

If you make a mistake without realizing it, the IRS will alert you if it’s something that they can’t fix on their own. When documents are missing from your tax return, for example, the IRS will likely send you a letter requesting them. 

If you realize one of these common errors on your own, you can be proactive and move to notify the IRS. Take a 1040X, Amended US Individual Income Tax Return and send it by regular mail to the IRS to correct any and all mistakes you may have made. 

In this situation, you would want to include the original tax form that you sent along with an amended copy. The IRS will then update your return. In most cases, the IRS is very flexible and forgiving when it comes to minor mistakes. 

More Serious Mistakes Or Errors

Many tax mistakes are fairly innocent and can be resolved fairly easily. If you make a mistake that results in you paying less tax than you actually owe, the IRS may be less forgiving. 

You can be found guilty of tax fraud if fail to file a return, under-report your income, over-report your expenses, or claim non-existent dependents. These are serious charges, and evidence of intent to evade taxes can get you hit with a large number of fees and penalties. 

Even if it’s an honest mistake, errors that result in taxes owed can incur a required penalty. Late payments will result in five percent additional payment of the unpaid taxes each month. This interest grows over time but peaks at twenty-five percent. 

You can also receive a penalty for late filing. This usually occurs after a sixty-day period and there is typically a minimum penalty of $210. 

Substantial underreporting of income can result in additional penalties that are designed as punishment. Underreporting of $5,000 or more can lead to a huge penalty: twenty percent of your owed taxes. That can be quite a hefty amount. 

Evaluate your tax situation

By evaluating your tax situation, you can identify areas where you may be able to reduce your tax burden and make informed decisions about your financial future.


Even at a lower amount, the IRS has the option to hit you with a twenty percent penalty for negligence. Negligence would apply to file a tax return with little or no regard for proper tax rules. 

Getting hit with tax fraud will leave you with the highest penalties at all. If the IRS thinks that they can prove you are intentionally submitting incorrect tax returns, they can have a civil fraud case brought against you. 

Found guilty? You’re looking at seventy-five percent tax penalty and possibly some jail time, depending on the severity of the misrepresentation. 

Penalty Relief and Forgiveness 

So the IRS’ outlook on tax forgiveness isn’t as black and white as you may think. Small mistakes are easily fixed and forgiven, while larger ones can start to add up to huge penalties. 

The IRS does consider relieving individuals of penalty payments under certain circumstances. An individual would need to have ‘reasonable cause,’ which includes serious illness, injury, natural disaster, or even death. 

If one is looking to receive penalty relief, they would need to submit evidence of reasonable cause to the IRS. The IRS may take some time to approve this submission, under which time interest on the unpaid tax is still increasing. 

But once approved, the IRS will remove the penalty requests. 

Given the number of tax returns in the United States in a given year, it’s fairly rare to be convicted of a tax-related crime. But it does happen. Understanding the penalties and procedures can help you be a little more careful when filing your next return. 

Understanding Tax Mistakes 

Due to the complicated nature of filling out a return, tax mistakes can be unavoidable. But while the IRS will take care of smaller mistakes for you, you need to be careful about bigger ones that could start toeing the line with tax fraud.

Ensuring that you’ve crossed your I’s and dotted your T’s properly when filing a return will help ensure you don’t receive a nasty surprise down the line. 

Need more info on the IRS? Check out our blog for more.

Clinton F Wassor

Clinton F. Wasser, holding a Master of Science in Legal Studies of Taxation, brings a wealth of expertise in tax planning and compliance to his writing. With a career rooted in the workings of the tax landscape, Clinton navigates difficulties with finesse. Beyond his professional accomplishments, he generously volunteers his time to educate high school students about the nuances of taxes. As an author, Clinton marries his real-world experience with a passion for simplifying tax concepts. He has found that his technique empowers readers to better understand the world of taxation.
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