If the IRS mails me a false bill telling me to pay over 100000 in past due taxes in 10 days are they will take my property etc. Can I do them anything since I had to hire a lawyer and almost gave me a heart attack!

If the letter was a willful attempt to intimidate you, you might have a case. But if it was just a mistake, its unlikely that you can get any compensation.

There has got to be more to the story than this. The IRS doesn't just send out threatening letters like this without a lot of previous communication. The first communication from the IRS when there's a problem is to tell you what income they think you failed to report and the amount they figure you owe, but you have an opportunity to respond with your version of the proper accounting to refute it. What was the result of hiring the lawyer - was the matter settled?

There has got to be more to the story than this. The IRS doesn't just send out threatening letters like this without a lot of previous communication. The first communication from the IRS when there's a problem is to tell you what income they think you failed to report and the amount they figure you owe, but you have an opportunity to respond with your version of the proper accounting to refute it. What was the result of hiring the lawyer - was the matter settled?

They said disregard the letter. Yes I did have previous communication but it was taken care of 2 years ago and paid in full. They agreed with us on phone and I owe the IRS zero! In a way I guess I should not stir the pot because they have plenty power!

Like any organization run by human beings, the IRS CAN make mistakes, which seems to be the case with you.

However, do NOT let the image of the IRS as an omnipotent agency with all-powerfull tools at their disposal fool you. They have written procedure and protocols that they MUST follow, and that includes giving you the right to challenge them when you think they are mistaken. Do NOT surrender that right!