Filing Amended Tax Returns – Why You Should or Should Not!

Stephen Ganns,, points out the obstacles that may come with filing an amended tax return.An amended tax return is a return that changes the filing of your original return. An amended tax return must be filed within three years of the due date of the original return according to the IRS statute of limitations.

When a person files their original return, they are affirming under penalty of perjury that their return is true and accurate to the best of their knowledge. However, many things can arise after the fact that present new information. For instance, a K-1 form that arrives well after April 15th or 1099 forms from brokerage accounts, which have been amended and could change the filing of the original tax return. 

A taxpayer who has in good faith filed a true and accurate tax return is under no obligation whatsoever to file an amended return. However, it may be to your benefit to do so.

Filing an amendment to a Federal personal return requires the filing of a 1040X and the applicable state return for whatever state you may be located in.

One of the biggest misconceptions concerning amended returns is that they get audited. In 36 years of preparing tax returns, I have seen no indication whatsoever that amended returns have a higher audit rate.

The IRS has 3 years from the due date of a regular return to audit the return. After 3 years, they can no longer audit that return. When you amend a return, you extend that 3 year statute of limitations. For instance, if you amend a return one day before the original 3-year deadline for auditing returns, you would extend the amount of time the IRS has to audit that return by an additional 3 years. However, as I stated before, there is nothing to make me believe that amended returns are more likely to be audited. The IRS gets hundreds of thousands of amended returns every year for a variety of reasons, so your amended return will not be the only one.

Helpful Hint:  I have noted that when changing preparers, it is a good idea to ask the new preparer if he or she will look over a prior year’s return in order to see if there are any mistakes which could/should be changed. I have found that when I get a new client, I am able to find something in about half of the returns I check. Some of the errors are insignificant. However some are very significant, in which case we have filed amended returns and gotten the client extra money back.

So Remember:

  1. Filing an amended return is entirely up to you, however, if the IRS receives the same information that you received, indicating you should file an amended return, they will simply amend the return for you by sending you an audit notice.  For instance, if you forgot to report a brokerage account or a brokerage account sent something out to you late where you had $10,000 of interest income, the IRS will change your tax return when they get that report.  When there is a significant error, no matter which way it goes, it is in your best interest to amend your return, to avoid any interest and possible penalties.

  2. The amended returns are no more likely to be audited than regular returns.

Stephen J. GannsStephen J. Ganns, CPA


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