Do you ever cringe when you check the mail and see you got a letter from the IRS? I did yesterday when I got a notice in the mail that I owed the government another 1000 dollars for a small mistake made on my 2006 taxes. Why? A qualified dividend and ordinary income of around 430 bucks that did not get reported until later in the year and I was never sent a notice. For some reason, the IRS notice stated that I owed 984 dollars (717 in taxes) which included penalties on the money. “How in the world,” I wondered, “could I owe more money on the income than I made?” So I called the IRS today to find out.br /br /Naturally, it took me several tries and a lot of patience to get through but I finally did. A rather nice woman assisted me but seemed to have little compassion for my predicament initially. “Well, you get a penalty for not accurately reporting this money.” “I didn’t know about this money because my fund company did not issue me any information,” I added. Then I heard a laugh. “Whoever issued this notice for your penalty and tax made a bunch of mistakes. This is embarrassing for the IRS. You actually owe nothing and should never have gotten a notice.” br /br /”So can I issue a penalty to the IRS for making a mistake?” I asked. No response, but I was so relieved that I did not owe any more money that I just wrote down her name and the information to file away and considered myself lucky. But in the back of my mind, I couldn’t help but think, “Why is it that if a citizen makes a mistake, we are considered suspect and penalized but if the government does it, it’s always okay? I will leave you to ponder that question.