10 Common Tax Mistakes, Their Consequences, and How to Correct Them

Federal tax mistakes are extremely common. According to the Internal Revenue Service (IRS), the tax gap—the difference between what taxpayers owe and what they have paid—currently stands at $696 billion. If you have recently discovered a mistake on your federal tax returns, what do you need to know? Virginia tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, explains.

Common (and Costly) Tax Mistakes According to the IRS

All types of filing mistakes have the potential to trigger scrutiny from the Internal Revenue Service (IRS). In a Tax Tip titled, Common Tax Return Mistakes that Can Cost Taxpayers, the IRS identifies the following as common—and potentially costly—mistakes to avoid:

• Filing too early
• Missing or inaccurate Social Security numbers (SSNs)
• Misspelled names
• Entering information inaccurately
• Incorrect filing status
• Math mistakes
• Figuring credits or deductions
• Incorrect bank account numbers
• Unsigned forms

We would add failing to report all taxable income from all sources to this list. From “gig” work to gambling winnings and cryptocurrency investment gains, these days, many people have multiple forms of income in addition to (or instead of) ordinary employment income. Under the Internal Revenue Code, failing to report any of your income to the IRS can have serious consequences.

Consequences of Filing Inaccurate or Incomplete Federal Tax Returns

If you fail to file a compliant federal tax return or pay the full amount you owe, you can face consequences immediately. For example, as the IRS notes, “[a]n unsigned return isn’t valid,” which means that the IRS' failure to file penalty generally applies. If you pay less than the full amount you owe, interest begins to accrue automatically, and you can face liability for the IRS’ accuracy-related penalty (among other penalties) as well.

Common tax mistakes also increase taxpayers’ risk of facing scrutiny from the IRS—and tax audits can prove costly. Additionally, if revenue agents have reason to believe that a taxpayer knowingly filed an inaccurate return (or knowingly failed to address a filing mistake upon discovery), this can lead to allegations of criminal tax fraud or tax evasion.

How Can (and Should) You Correct a Past Filing Mistake?

With this in mind, what can (and should) you do if you need to correct a past filing mistake? In this scenario, there are several potential options, and you will want to discuss all of your options with an experienced Virginia tax lawyer. An experienced lawyer will be able to help you decide whether you should file a delinquent or amended return—or you should take a different approach, such as seeking a settlement or submitting a voluntary disclosure.

Request a Consultation with Virginia Tax Lawyer Kevin E. Thorn Today

If you need to know more about the options for correcting a past filing mistake in 2025, we invite you to get in touch. To request a consultation with Virginia tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, call 703-752-3752 or tell us how we can reach you online today.