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Should I Amend A Return if I Discover New Tax Docs?
October 20, 2017
Even when you make every effort to keep good tax records, unfortunately sometimes, something slips through the cracks. What should you do if you already filed your return and receive additional tax documents after you filed?
In many cases, you may not be required to file an amended return. Keep in mind that you signed your federal tax return under penalties of perjury which means your return should be accurate and complete. The benefit of filing your tax return on time means that you cannot be prosecuted for failing to file an amended tax return, not even when the original return contains mistakes. If you are considering filing an amendment, you determine if the original return was prepared accurately when you filed it.
If the answer is yes, then you need to consider a few things here. Are you only wanting to file an amendment because it will help you get additional funds back? If the answer is yes, then you may want to amend it. However, you need to make sure that you are including ALL new documentation, not just the corrections that will increase your refund. Keep in mind that you have to sign the amendment under penalties of perjury so you still have an obligation to make sure it is accurate. Although most tax returns are not audited, tax advisers are aware that amended returns are considerably more likely to be audited than original returns.
So know what?
If you received a Form 1099 or Form K-1 after you filed your return, should you amend the return? Often amended K-1s from partnerships, S corporations and LLCs have a particularly bad habit of showing up right after you filed your return and you may be stuck filing an amendment that you are not sure you have to do.
In many cases, you are most likely safe in not filing an amendment, especially if the original was accurate at the time of filing. However, you may still want to file an amendment which is optional. On the other hand, if you knew the return was inaccurate when you filed it, you should amend it immediately with accurate information to avoid having a fraudulent return on file. The best advice is to seek a tax professional. They can help you navigate your options and prepare and file your amendment to avoid additional mistakes. In addition, a good tax professional will help you avoid these issues in the future.
When determining whether you should or should not file an amendment, you should know that the IRS rarely brings up an originally filed return in civil audits or in criminal prosecutions once the taxpayer has come forward and attempted to correct it by filing an amended return. In order to avoid IRS issues, you need to make the corrections to known issues on your return before the IRS finds the error. As long as the original return was accurate at the time of filing, you will not be prosecuted. You may have an additional tax liability based on the new numbers. Conversely, if your original return was fraudulent, even filing a fully accurate amended return will not immunize you if the IRS discovers it. Seek a tax professional to discuss your best course of action. It is rare, but the IRS can still pursue you, if you filed a fraudulent return even if you attempt to fix it later. Make sure your original federal return is filed accurately and if you discover additional tax documentation after the filing that impacts your original return, you should most likely amend it.