An amended tax return requests the IRS to change the original filed return to a corrected or “amended” return. The new return, when accepted by the IRS, can either lower or increase your tax liability (limited cases, no change in taxes owed/refund).
Individuals can use Form 1040-X, Amended US Individual Tax Return, to file an amended return. When filing an amended return, the taxpayer will show the original return as filed or changed by the IRS (column A), the changes (column B), and the corrected, final tax items after the changes (column C).
Taxpayers can inform the IRS of the nature of the changes on the second page of Form 1040X in Part II.
Businesses and other taxpayers can amend using the specific form that relates to their original return. For example, a corporate taxpayer who files Form 1120, US Corporation Income Tax Return, will file Form 1120-X, Amended US Corporation Income Tax Return.
How long do I have to file an amended return?
To claim a refund, a taxpayer must file an amended return (i.e., Form 1040-X) within 3 years after the date of the original return or within 2 years after the date the paid the tax, whichever is later.
How long does it take for the IRS to process an amended return?
During normal IRS operations, the IRS will process the amended return within 16 weeks after filing. Electronic filing an amended return may improve processing time by 1-2 weeks. Taxpayers can check the IRS website that provides the current processing times for specific tax forms.
What are the most common reasons why someone amends their tax return?
The most common reason a person amends their individual tax return is due to forgetting to include a source of income or deduction on a return.
Can I e-file (file online) an amended return?
Yes, you can amend the most recent and prior two years online using tax software products. However, most tax software DIY products will not allow prior year e-filing of amended returns. Taxpayers who need to file a prior year amended return generally find a qualified tax professional preparer who will have prior year tax software and the ability to e-file the amended return.
Do I have to provide documents to show why I am amending the return?
No, no additional documentation or proof of the changes are required. If the IRS selects the amended return for audit, the taxpayer will have to provide proof of the changes.
Will I get audited if I file an amended return?
It is possible. Amended returns go through a screening process for acceptance. If the IRS selects the amended return for audit, the taxpayer will have to provide proof and/or explanations for the changes to the original return. In some cases, the taxpayer may have their original return audited also, requiring them to prove items on the original return. However, the IRS has three years from the filing date of the original return to audit the original return.
In 2019, the IRS audited 3% of all Forms 1040-X filed for that year.
Does filing an amended return extend my time to be audited by the IRS?
No, the time period for the IRS to examine the original return is still 3 years from the date the return is filed, or the due date of the original return, whichever is later (the “assessment statute expiration date” or “ASED”). If a taxpayer files an amended balance due return within 60 days of the ASED, the IRS has 60 days after it received the amended return to make an assessment.
What happens if the IRS rejects my amended return?
The IRS normally accepts all “balance due” amended returns. However, in some cases, the IRS may reject or “disallow” an amended return claiming a refund. In these cases, the taxpayer has rights under the “claim for refund” appeals process. If a amended return claiming a refund is disallowed, the IRS will normally send a formal “Notice of Claim Disallowance” (IRS Letter 105C). This notice allows the taxpayer to contest the refund disallowance by suing the IRS in court for the refund claim. Taxpayers must file suit within two years from the date of the Notice of Claim Disallowance.
If the IRS makes an obvious error in disallowing the amended return, the taxpayer can ask the IRS’ Taxpayer Advocate Service to intervene.