Tax Problems

reviewed by Mark Badkar
June 12, 2023

Each year, the IRS publishes its Data Book which gives insight into taxpayer issues. You can read other IRS reports from various sources like the General Accountability Office, the Treasury Inspector General for Tax Administration (TIGTA), and the IRS advisory committees to glean more data into tax problems. Here are the six most common problems faced by taxpayers:

The Dangers of Your Tax Problems

While the IRS does not pursue criminal tax evasion cases for many people, the penalty for those who are caught is very harsh. They must repay the taxes with an expensive fraud penalty and possibly face JAIL TIME of up to five years.

Back Payroll Tax

The IRS is coming for their money, payroll taxes collected by employers make up more than 70% of all taxes collected.

IRS Tax Lien

Federal tax lien is the government’s legal claim against your property when you neglect or fail to pay a tax debt.

Unfiled Tax Returns

On average, 20.1 million owe taxes and cannot pay Over $539 billion is currently owed to the US.

Math error notices

Affects 1.9 million Americans annually and the IRS adjusts returns automatically by notice by mail.

Tax Audits

1.1 million audits conducted by the IRS – 89% of tax returns that are audited are changed by the IRS.

Demand Notice

IRS Demand Letter is a notice from the IRS stating that you owe them a certain amount of money from back taxes.

Wage Garnishment

Part of your wages will be sent to the IRS each check until making other arrangements to pay your overdue taxes.

Unpaid Payroll Taxes

Even paying employee taxes 16 days late results in a 10% penalty, if an IRS notice results in a penalty of 15%.

Underreport Income

An estimated 3 million Americans under report their income. IRS Automated Underreporter Program.


Affecting 29.5 million taxpayers annually and there are over 150 different types of IRS penalties.

Misclassification of Employees

Criminal penalties of up to $1,000 per misclassified worker and one year in prison can be imposed.

IRS FBAR Penalty

A willfulness penalty may be imposed on any person who willfully fails to file the FBAR, with the ceiling on the penalty being the greater of $100,000 or 50% of the balance in the account at the time of the violation

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.

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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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