Common Tax Problems and Solutions

While inability to pay your taxes leads the list for common tax problems, there are many other issues involving tax controversy. There are over 20 million Americans who owe the IRS or other taxing authorities more money than they can afford to pay. Over 80% of these tax liabilities are owed by individuals, not corporations. Many of them are able to negotiate an installment plan through an experienced attorney allowing them to pay over time in a manner they can manage.

Other common tax problems include:


Each year the IRS penalizes millions of taxpayers for late payment, late filing or an inaccurate tax return. There are over 150 different types of IRS penalties, with the most common being a penalty for failure to pay. Another common penalty is assessed for failing to properly pay estimated taxes.

Underreporting Income

The IRS has an automated under-reporter program that provides a CP2000 notice to over 20 million individuals each year. The average amount owed is just over $3000.

Failure to File

There are over 50 million small businesses in the U.S. that fail to file their tax return on-time. The IRS assesses a penalty for failure to file as well as failure to pay. See our blog post on the difference between these penalties here. If the reason you delay in filing your tax return is due to missing necessary tax documents, there is a substitute form that can be used. This article explains the steps to take if you are missing tax documents.


Another common tax problem is that errors are made in preparing the tax return. The IRS adjusts the return automatically and sends notice of the incorrect calculation. This may result in an adjustment to the amount owed or refunded.


The most-feared common tax problem is that of receiving notice of an audit. Over a million taxpayers face IRS audits each year. Very few of them result in a field audit, most are done by exchanging information through the mail. An experienced tax controversy attorney can help guide you through the audit process.

Sales & Use Tax

Many business owners fail to properly understand how to calculate, file and pay sales and use tax. This is a very common tax problem for small businesses.

Property Taxes

Property owners who fail to pay property taxes to local government authorities face the possibility of having a lien assessed on their property. This can be very cumbersome and should be dealt with promptly.

While there are many common tax problems facing today’s taxpayers, there are also many solutions. Contact our tax law firm in Raleigh to learn more about how we can help you address your issue and rediscover peace of mind.

Written by Justin Moyer on April 25, 2022.