IRS's "free" advice often wrong.

• Position: Income Taxes

Each year, tens of millions of people seek help from the Internal Revenue Service during tax filing season and, too often, they are sorry for it. Remember the wisdom of the proverb, "You get what you pay for." While IRS advice comes with no up-front charge, it often bears a substantial cost in the long run because the agency makes so many mistakes, cautions Daniel J. Pilla, executive director of the Tax Freedom Institute, and author of 11 books on taxpayers' rights issues and IRS defense strategies.

A January, 2004, report of the Treasury Inspector General for Tax Administration confirms that the IRS provided incorrect answers 20% of the time to questions posed by Treasury inspectors anonymously visiting 34 Taxpayer Assistance Centers (TAC) in 10 states. However, this figure is misleading since, in another 15% of the cases, the IRS provided a "correct" answer without first obtaining the background information necessary.

For example, a father might ask whether it is legal to claim his child as a dependent on his tax return. One simply might answer yes and be correct, but only in a very broad sense. Without knowing all the facts about that child, it is very possible that that the answer is no. In a situation where the parents are divorced and legal custody of the child rests with the mother, it is not allowable for the father to claim the child as a dependent unless the mother signs a written waiver granting the exemption.

The problem here is that most citizens are not familiar with all the rules. Consequently, taxpayers are unaware of what information to provide to the IRS as background for their questions. When this type of incomplete advice is factored in, the total inaccuracy rate rises to 35%.

Moreover, the report indicates that in about three percent of cases, IRS employees essentially told Treasury investigators to "do their own research." That is, rather than helping to find the correct answers, the IRS simply referred investigators to publications to locate the solutions for themselves. Considering the...