The Six challenges that taxpayers experience

The IRS data are surprisingly reliable. Therefore, it is simple to determine the most frequent IRS issues that taxpayers deal with when it comes to tax difficulties.

Things you should know about IRS Tax Help

The IRS releases its Data Book, which provides information on taxpayer difficulties, once a year. To learn more about tax issues, you can read other IRS studies from different sources like the IRS advisory committees, the Treasury Inspector General for Tax Administration (TIGTA), and the Advisory committees of the IRS.

The following are the top six issues that taxpayers encounter:


The IRS penalizes taxpayers in case of late payment, late filing, or an inaccurate tax return. Around 29.5 million taxpayers are penalized by the IRS annually for such reasons.

There are over 150 different types of IRS penalties which:

  • 11% of all penalties were abated.
  • 80% are related to individual taxpayers.

The most typical fine of the IRS is “failure to pay.”

Out of 96% of all penalties of individuals are comprised of failure to file, failure to pay, and anticipated tax penalties.

Unpaid taxes

This is when the taxpayers owe an amount but not being able to pay the amount.

IRS has not released its official data on the current statistics of the taxpayers who couldn’t pay their taxes. According to the study in 2019, over 20.1 million individuals owe and couldn’t pay their taxes.

There is currently more than $539 billion to be paid to the US Treasury.

Of all taxpayers, 84% are individuals who owe over 16.8 million to the IRS.

Hence, The IRS is pursuing 11.2 million past-due accounts aggressively.


Non-filers are titled when the taxpayer fails to file his required tax return.

According to IRS data, there are 50.5 million business non-filers and over 10.6 million individual non-filers. In this category, several million additional non-filers of small businesses were included.

The IRS used W-2s and 1099s to identify non-filers.

Using this data, the IRS may file a return for the taxpayer, called a substitute for a return using W-2s/1099s.

Underreport income

When the taxpayer does not report all of their income (W-2s/1099s) is an underreported income.

As of 2019’s IRS data, there was 2.0 million underreported income.

This program with CP2000 notice is called the IRS Automated Underreporter Program. Over 27 million taxpayers out of 150 million individual filers do not record every W-2 or 1099.

Math error notices

This error occurs when a taxpayer commits a mistake, and the IRS has to modify the amount owed on their refund or balances.

The individuals have created math errors of over 1.9 million as of 2019. The most frequent math error is incorrectly calculating the taxes.

IRS sends out a notice and automatically modifies the return.


This is when the IRS audits the taxpayers. In 2019, there were over 1.1 million audits, out of which 74% were done by mail. The IRS modifies 89% of audited returns. The Mail and field audit collected an average amount owed $6,164 and $68,122.