July 3, 2007 6:16PM 

# Why People Hate the IRS 

By [Chris Edwards](https://www.cato.org/people/chris-edwards) 

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My wife and I received a notice from the IRS yesterday regarding our 2006 income tax return. At first glance, I thought it said we underpaid by $107, which would be no big deal and I’d go ahead and pay.

Then I looked closer at the calculations the notice showed:

Total Tax On Return: $xx,242.00

Total Payments and Credits: $xx,241.63

Underpaid Tax: $0.37

Penalty: $106.65

Interest: $0.01

Total Amount You Owe: $107.03

You’ve got to be kidding–we underpaid our taxes by 37 cents and the IRS is dinging us with a $107 penalty?!

Page 22 of the 1040 instruction book clearly says that rounding to the nearest whole dollar is OK. I think this needs more investigation.

##### Related Tags 

[General](https://www.cato.org/general), [Constitutional Law](https://www.cato.org/constitutional-law), [Tax and Budget Policy](https://www.cato.org/tax-budget-policy), [Robert A. Levy Center for Constitutional Studies](https://www.cato.org/robert-levy-center-constitutional-studies) 

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