Waste of Time: In the 1980’s, a teenager was preparing his tax return. He came up with a negative number that he had to put in, and there was nothing in the instructions about dealing with negative numbers, so he just left it the way it was. His tax return amounted to roughly $30. The IRS did not accept his return because according to them, he was supposed to put “0” anywhere there was a negative number, even though there was nothing written in the instructions.
The IRS showed the instructions for the next year’s tax return which did specify that rule. After many years of writing back and fourth, the taxpayer finally went to the local IRS and proved to the IRS agent that he was right. He finally got his refund years later after many hours wasted on explaining his situation to the IRS.
Ugly Error: The IRS seized a woman’s equipment that she had in a beauty shop she owned. They then auctioned it off to get the money she owed them. However, it turned out she paid her taxes in full, but the IRS made an error. The IRS returned the equipment, but her business sustained significant damage.
Pricey Difference: A youth soccer association is in trouble with the IRS for incorrectly filing the statuses of their referees. The association filed them as independent contractors because they pay them on a per-match basis. The IRS insists they should be filed as employees, and fined them for more than $330,000.