Recovering Damages

You may be able to recover economic damages if an IRS error ends up costing you money. However, the circumstances under which you can recover damages are quite limited.

These situations typically occur when an IRS mistake results in a bank charge. There are three ways this can happen:

• You have a direct debit installment agreement, and the IRS makes a mistake when processing your payment, such as withdrawing the incorrect amount or making a withdrawal on the wrong date.
• You send a check to the IRS and they lose or misplace it.
• The IRS wrongfully levies your bank account.

In these situations, you may seek reimbursement of the associated bank charges using Form 8546, Claim for Reimbursement of Bank Charges.

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