Steven Klitzner, a tax attorney with the law office of Steven Klitzner, joined Good Morning Keys on Keys Talk 96.9/102.5FM yesterday morning to talk taxes.
While the IRS doesn’t usually make mistakes, sometimes they can – and when they do, they can be a doozy.
In one case, a woman in her early 60s who works as a kindergarten teacher had $120,000 taken from her investment account after the IRS incorrectly calculated what she owed.
Klitzner said the woman had filed her 2024 tax return and later amended it to make a legitimate correction. Because she originally owed a small amount, the amended return actually resulted in the taxpayer no longer owing money.
But, according to Klitzner, someone at the IRS made a basic mathematical error when processing the amended return.
“Somebody at the IRS, when she sent the amended return, took her, subtracted her tax from her taxable income, and what was left over, is what they said the tax was,” Klitzner said.
The IRS then treated the incorrect figure as the woman’s tax liability and sent the matter into collections.
“It goes warp speed into collection, which it usually doesn’t,” Klitzner said. “Next thing you know, they’ve got the money.”
Klitzner said the woman actually did not owe the IRS anything.
“She didn’t owe anything. They owed her money,” he said.
The taxpayer eventually sought Klitzner’s assistance, but he said she waited too long to contact him.
“Had she come to me when she got the very, very first letter, we would have been able to resolve it,” Klitzner said.
The IRS is now refunding the $120,000, plus interest, he said.
Klitzner said the mistake was not caused by artificial intelligence.
“This wasn’t AI. AI doesn’t make this kind of mistake,” he said. “Just subtracted the wrong number from the wrong number and sent her a bill.”
In another case, Klitzner said he represented a taxpayer who received a final notice of intent to levy. He said he had only a few days to request a hearing, which he did by certified mail.
“A week goes by. They take his paycheck. They levy his paycheck,” Klitzner said.
Klitzner said he reviewed the IRS transcript and confirmed the agency had received his request for a hearing.
“They cannot levy, and maybe this was AI, but they went ahead and levied anyway,” he said.
He said the paycheck levy was released after he intervened.
Klitzner said situations like these demonstrate why taxpayers need to understand their rights and pay attention to IRS correspondence.
“They’ll get away with a lot, but once somebody points it out and you can get somebody real to listen to it, you can make the corrections,” Klitzner said.
He added that some IRS mistakes are not matters of interpretation.
“There are things that are not gray. There are things that are black and white that they mess up on, and they’ve got to correct it,” he said.
Klitzner said the IRS is also operating with a significantly smaller workforce, making it increasingly difficult for taxpayers to get their problems resolved.
“They’ve got a 25% total workforce reduction,” Klitzner said. “They’re down about 77,000 from 102,000. It’s harder and harder to get somebody that not only will listen but has the authority to correct the mistake.”
A federal watchdog reported in June that more than 31,000 IRS employees had separated from the agency or taken separation incentives during the year ending in January 2026, representing about 30% of the agency’s workforce. The report also warned that staffing shortages and increased backlogs could create operational risks.
Klitzner said the staffing reductions are noticeable when dealing with IRS personnel.
He said he recently spoke with a regional collection director who described Florida as one of the country’s IRS “hot spots.”
“They’ve got a map with all the hot spots in the country,” Klitzner said. “And they’ve got, you know, Dallas, New York is red, Los Angeles, the entire state of Florida.”
He said the IRS continues to focus on enforcement in Florida despite losing collection personnel and auditors.
“They’re coming down hard here, and even though they’ve lost a lot of collection people and auditors in Florida, it’s still a spot that they’re looking at for enforcement,” Klitzner said.
Klitzner also warned business owners about unpaid payroll taxes, saying the consequences can extend beyond the business itself.
He said approximately 60% to 65% of certain unpaid payroll taxes can become the personal responsibility of the business owner, particularly taxes withheld from employees.
“That’s the money withheld from employees, and that money the IRS will look directly to the employer,” Klitzner said.
He described cases in which bookkeepers failed to pay payroll taxes, leaving the business owner responsible.
“The IRS says, ‘Oh boy, we feel bad about that. But you know what? It’s your responsibility. Should have made sure you paid it,'” Klitzner said.
In another case, Klitzner said he recovered $5 million for a taxpayer after the IRS had taken the money from an investment account.
The man had moved out of the country and failed to file tax returns. The IRS prepared returns using information available to the agency and determined he owed $5 million.
After the taxpayer contacted Klitzner, correct returns were filed.
“We filed correct returns where he did not owe any money,” Klitzner said. “They were just under the IRS’s on their, you know, to back them up on this. He didn’t file, so they went with what they had, but then we filed the correct returns. He didn’t owe anything, and we got back $5 million.”
Klitzner said the case illustrates that people who find themselves in tax trouble are not necessarily acting with bad intentions.
“Technically he didn’t know he had a filing responsibility,” Klitzner said. “But there was a lot of money moving around. Had he filed his returns correctly, it never would have happened.”
His advice to taxpayers dealing with the IRS is straightforward.
“If you need help, like in any other aspect of your life, get help,” Klitzner said. “The IRS does not is just not set up to be…user friendly, and they never tell you all of your rights.”
Klitzner also reminded taxpayers with filing extensions that important deadlines are approaching.
For calendar-year corporations that received extensions, the filing deadline is Sept. 15. Individuals who received six-month extensions generally have until Oct. 15 to file. The IRS lists Oct. 15, 2026, as the deadline for individuals who timely requested an extension.
Klitzner said taxpayers who fail to file on time can face penalties.
“The penalty is four and a half percent a month for failing to file the return on time,” he said. “It maxes out at 22 and a half.”
Klitzner said taxpayers should not assume that receiving an IRS notice means the agency’s calculations are automatically correct.
“Every case is different,” he said. “There’s so many different dynamics that happen.”
He said his goal is to make sure taxpayers understand the process and have someone advocating for their interests when necessary.
“I speak to every client. I work on every case,” Klitzner said. “I do have assistance, of course, but the bottom line responsibility is always mine to take care of the problem.”
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