We've seen this up close and personal starting a few years ago. We got a notice that we owed thousands of dollars of back taxes plus fines. We looked at it and had no idea what they were talking about, our tax preparer (aka wifey, who ran a business office for twenty plus years, aka expert) kept sending back information to these people, calling, calling trying to find out what they were talking about, because wifey was always squeaky clean (aka honest) with our tax returns.
The good news was in the end, they agreed we owed nothing, the bad news: It took weeks of time to respond to this mess, and two and a half years to get through the process.
While it was going on, we kept telling people about it and laughing at their ridiculousness, full well knowing we might have to pay them through the nose. We kept asking why in the world they were going after us for such an obscure and difficult ruling in the tax law. It seemed so senseless....
Until we heard about the IRS scandal and what they were doing. The light went on real fast when I first read about it. The sad part is, none of these people will see a jail cell for what they've done.