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Amending a tax return: When is it necessary?

It’s a common scenario, especially this time of year: filing a tax return, but realizing later that the information is inaccurate or incomplete.

Every year, several million people choose to amend their returns to address this situation.

But when is amending a return really necessary?

Whether to amend a return depends on several different factors. The type of information to be added or clarified, and the taxpayer’s original intent, are all important.

Math errors or missing schedules

Amending a return isn’t necessary to fix math errors or because a schedule or form is missing.

Don’t feel you have to amend your return because of computational mistakes or because you left out a certain schedule or form. The IRS can generally continue to process your return by fixing math mistakes.

Omitting a form or schedule also does not generally prevent the IRS from beginning to process your return. If the IRS sends a notice asking for more information, you can apply directly to that notice, rather than amending your return. A change in filing status, income, credits or deductions may be reason to amend.

Awareness of inaccuracies

The most important factor involved in deciding whether to amend a return is whether, to the best of your knowledge, you made an honest attempt to file an accurate return originally.

No one can be prosecuted for failing to file an amended tax return. But if you aware of possible inaccuracies in your original return at the time you filed it, that is a concern.

After all, you don’t want the IRS to come at you for civil fraud or even willful tax evasion. If you knew at the time it was filed that your original return wasn’t accurate, an amended return can set the record straight before the IRS discovers the error.

In such cases, however, filing an amended return could be considered a “quiet disclosure” of noncompliance with tax law. In such circumstances, before making a decision on whether to amend, it makes sense to discuss your situation with a knowledgeable tax attorney.

 

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