Will the IRS Fix My Mistakes on My Taxes?
Have you ever realized too late that you made a typo or a couple of mistakes on your tax return? Fear not, the IRS does have a process for correcting tax returns that contain errors. However, it's important to understand the implications and steps involved.
Dealing with Typos and Errors
Any problem with your tax return will likely put it into a queue to be resolved by examiners. This can lead to a long delay in processing, potentially stretching over months or even years. To avoid such delays, consider using tax software, filing electronically, or hiring a tax preparation company to help you.
How will the IRS Correct the Errors?
If the typos or errors are substantial, the IRS will correct them and perform the correct arithmetic. They will determine your tax liabilities or refunds. They often send a letter outlining the corrections they made and give you 30 to 60 days to agree or disagree. However, the IRS cannot check every return, so some minor errors may go undetected for a while.
To prevent penalties for incorrect filing, it's best to file an amended return with the mistakes corrected. This serves as a proactive measure to ensure your records are accurate and up-to-date.
Potential Impacts of Errors
Your return could be processed with errors, and there are several outcomes that may occur:
Rejection: The IRS may reject your tax return and ask you to refile. Noticed but Not Corrected: Even if the IRS does not notice your mistake, your return may still be audited in the future, leading to potential errors being detected.Depending on the nature of the errors, different outcomes are possible. If the typos have led to an incorrect tax due or refund amount, you may need to take specific actions.
Tax Due Too High or Refund Too Low
If your errors have resulted in a tax due that is too high or a refund that is too low, it will likely be in your best interest to file an amended return. You can search online to learn how to file an amended return and reclaim your money. It is important to address these issues as soon as possible to avoid penalties and interest.
Tax Due Too Low or Refund Too High
If your errors have led to a tax due that is too low or a refund that is too high, the IRS may not notice it or it might be a while before they do. In most cases, they will simply send you a bill demanding repayment of the excess refund or payment of the unpaid taxes. You can contest this and/or negotiate a payment plan if you cannot pay the full amount immediately. If the amount in controversy is significant enough to potentially face criminal charges, you should contact a lawyer experienced in tax-related matters.
Proactive Measures
Even if the IRS does not catch your mistake, you should still be proactive. Unpaid taxes can accrue late fees and penalties over time. If you think you may owe, consider filing an amended return to resolve any discrepancies. While such situations can be stressful, they are often manageable with proper planning and action.
One important lesson to remember is that the longer an amount goes unpaid, the more costly it becomes in terms of late fees and penalties. For instance, if you owe a back tax of around 600 due to an error, you could end up owing an additional 300 in penalties over the next few years. Therefore, it might be wise to take action sooner rather than later.
Conclusion
While it can be disconcerting to find errors on your tax return, the IRS does have procedures in place to correct them. By understanding these procedures and taking appropriate action, you can minimize any potential consequences and ensure your tax filings are accurate and compliant.