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Made an Error on Your IRS Return? Fear Not, They Can Be Corrected!

written by: •edited by: Michele McDonough•updated: 6/22/2011

You’ve prepared your taxes carefully, reviewed them, signed them and even sent them via certified mail to the Internal Revenue Service—good for you! But what if after mailing in that return you find you made an error? Should you expect an IRS agent at the door or an audit? Find out here.

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    The Frightening IRS

    Scary IRS Agents Years ago, the average person feared the Internal Revenue Service (IRS)—mean men in black suits with electric calculators and every single tax law hidden inside their briefcase! No wonder tax payers would worry about correcting tax mistakes on annual returns right?

    These days, the only real thing to fear about the IRS is the wait time on the telephone to ask a question—which is often really long. I do believe the IRS representatives are here to help and every time I’ve called the IRS, either they've helped me solve my problem, offered up the correct forms I should use to amend my return or directed me to the right department—so your fear level should be going down about now.

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    Sorting Out the Errors

    Mistakes Before you rush to amend your return for errors, the IRS isn’t interested in some errors including:

    Address – If you moved and failed to change your address on your tax return, don’t amend the return. Simply change it next year. They’ve got enough to do and like most government organizations, don’t have the staff.

    Name Change – Even if you get married and decide to take your spouse's name, the IRS still associates your maiden name with your social security number so it’s not necessary to file a new return showing your changed name. Eventually those two wonderful departments, the IRS and the Social Security Administration, will catch on—even if it takes a while.

    Math – The IRS does check the math on all tax returns so if you find a mistake, don’t worry. If it changes the amount you owe or are due, they will notify you so don’t need to file an amended return.

    Deductions Missed – If you forgot to include an allowed deduction—say large medical expenses or your mortgage interest and are still getting a refund—don’t amend. You have up to two years to correct or amend the return and ask for the refund due, and the IRS will comply with your refund request.

    Missing Documents – If you are a shareholder of a company and forgot to include your K-1 or shareholder’s loss or gain statement but did report the gain or loss on the return—again if you amend the return, you may confuse the IRS. They will send you a letter informing you about the lack of K-1s or any other wage statements you must attach to returns and offer an envelope to ensure when you do mail these statements in, they are going to the right IRS office.

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    When You Need to Amend

    Do Amend I just love IRS publications don’t you? These novellas, such as Publication 17 – Tax Filing Information (link in reference section), are lengthy and they can be confusing. My favorites are those IRS directions that say you should consider correct tax mistakes if this happens in conjunction with this mistake or a combination of requirements you must meet—and even worse, those conditional terms: If you answer yes to one or three, but not two of the following questions, then you must (blah blah blah):

    1. Live on a boat and have a jet ski and made at least $10,000,
    2. You live on a boat, have a jet ski and a girlfriend and a wife and made under $10,000, or,
    3. You live on a boat your Mommy owns but still own the jet ski and have a wife and girlfriend and made under $10,000!

    How does the average taxpayer figure out all the what-ifs? If you combine this answer with that answer, you’ll find the right answer—these IRS scenarios can send the mind racing!

    There are, however, times when correcting tax mistakes is a necessity so skip the IRS Novella Publication 17 and find out when you should amend your return.

    Filing Status – If you need to change your filing status (married, single, etc.), you will need to amend the return.

    Underreported Income – If you forgot (sure you did) to include a few 1099 wage earning reports and underreported your income, you must amend because don’t forget—the IRS has a copy of those 1099s! They also receive copies of every W-2 Wage report annually so don’t try and fool the IRS, they’ll catch on. Yep—underreporting often means IRS audits or interest and penalties so do amend these mistakes.

    Imaginary Deductions – Well not imaginary, but perhaps you simply forgot (again, sure) and included deductions or expenses you should not have claimed. Sure these can increase your refund but this is dishonest so either don’t do it or amend the return ASAP.

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    How to Amend

    IRS Logo Wikimedia Commons Finally, if you do find you must fix some errors on your tax return, what is the process?

    Again, you can delve into Publication 17 with a LARGE pot of coffee or below you’ll find some quick answers:

    File a 1040X – This is what the IRS calls their amended personal return tax form and is similar to the 1040, only it allows you to show the original error and insert the correct information. In the reference section you’ll find links to the 1040X form along with instructions on filing out form 1040X—yep they’re two publications in and of themselves. Lucky you!

    Prior Year Mistakes – If you need to file a 1040X for say year 2009, you can’t use the form dedicated for year 2010. No sir! What you need to do is search the IRS prior form publications (link in reference section) to find the 1040X for the year you need to amend the return.

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    Ask for Help

    Ask for Help Finally, I must reiterate the IRS is not an unfriendly organization and as a tax payer, you are really employing those answering telephone questions so take advantage and ask for help. The best number to call is 1-800-IRS-1040 and while you’ll wait a while, be assured the person on the other end of the line is there to help. So stop trembling and stay calm—they do have the answers you seek.

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    Helpful IRS Resources

    IRS - Publication 17 Tax Filing Information and FAQs

    IRS 1040X Amended Personal Return

    IRS Instruction for 1040X

    IRS Prior Year Amendment 1040X Forms

    Image Credits:

    Man in Hat - Sxc.hu/mzacha

    Wrong - Sxc.hu/Cieleke

    Right - Sxc.hu/Cieleke

    IRS Logo - Wikimedia Commons/US Government

    Question - Sxc.hu/immrchris