“People receiving these letters should take immediate action to avoid additional follow-up notices, higher penalties as well as increasingly stronger enforcement measures,” the IRS warns.

“This is the IRS’s gentle tap on the shoulder. The next tap could be much harder,” says Caroline D. Ciraolo, a partner with the Kostelanetz law firm in its Washington, D.C., office and a former acting assistant attorney general of the Justice Department’s tax division.

Say that a taxpayer has a surge of income in the fourth quarter that doesn’t have withholding. If he makes a tax payment covering this income in the same quarter, the IRS’s computers won’t match them. Instead, the system assumes the income was earned evenly throughout the year. Then it assesses an interest-based penalty because it thinks that some of that tax was due earlier and that estimated payments should have been made in earlier periods.

As the cost of higher education continues to soar, many families find themselves grappling with the daunting task of saving for their children's future academic endeavors. 529 plans are a popular—and potentially powerful—option for college savings. Put simply, 529 plans are tax-advantaged education savings vehicles, where the funds are for college only. However, like any financial instrument, 529 plans come with their own set of advantages and limitations.

While more than 90% of taxpayers choose to get refunds by direct deposit into their bank account, there are still many Americans who prefer checks. Nearly 10 million paper refund checks went out last year, according to the IRS. 

But these refunds delivered by mail have become a popular target for check fraud, according to a Treasury Department report last year.

The IRS knows that understanding and meeting tax obligations is vital to the success of all businesses, especially a new one. IRS.gov has the resources and information to help people through the process of starting a new business. 

Here are some tips for new entrepreneurs.

The American Opportunity Tax Credit, often referred to as AOTC, is a tax credit provided by the U.S. government to assist eligible taxpayers in paying for qualified higher education expenses. The credit aims to make higher education more affordable for students and their families.