Most people believe that the pace of work for tax professionals slows down after Tax Day. But the pace accelerates. And one of the reasons is the mistakes that sometimes happen due to your tax records being a mess when you file your tax return.
You might get a revised 1099 in the mail following your tax return filing if you made simple blunders. Such as you mistyped something, made an arithmetic error, or neglected to submit any income.
In any case, if the tax return you just submitted is incorrect, you might find yourself asking questions. Like what to do if your tax records are a mess? What is going to happen now? Will you be subjected to an audit?
Keep reading as we answer the most frequently asked questions:
Is It Possible to Re-File My Taxes If I Made A Mistake?
An Income Tax Return may be updated within five (5) years of the date it was initially filed. Allowing you to address any omissions or errors discovered after the initial filing.
A revision petition must be submitted through the IRS to change the income tax return. Your amended Income Tax Return can be filed in IRS after your application has been approved.
What Are the Consequences of Filing an Incorrect Tax Return?
There is no explicit penalty for filing an inaccurate tax return. However, you may be subject to fines if you file your tax return incorrectly.
For example, if you are required to pay more tax, you will be subject to additional penalties in proportion to the rise in tax; on the other hand, there are no penalties connected with filing an incorrect return.
If I Make a Mistake, Would the IRS Notice?
What happens if you find you’ve made a mistake after you’ve submitted your taxes? Perhaps you received another tax document in the post after you sent everything to the IRS?
It’s all right. The IRS has worked with similar situations in the past and may have solutions for you. If you’re scared you’ve made a mistake, here are some practical actions to take.
Is it a problem if the error you’ve made has something to do with math? Simple addition and subtraction mistakes will be caught and automatically corrected by the IRS.
If you forget to send in the paperwork, the IRS will generally contact you in writing to remind you of your omission.
Minor Problem with Tax Records
If the problem is minor, the best course of action is to wait. Allow the Internal Revenue Service to complete processing your original tax return. At that time, you may be able to determine if the IRS merely remedied the error. Or whether they have requested additional information from you.
Severe Issue With Tax Records
However, if you believe you have committed a more severe error. For example, if you need to modify your filing status, adjust your income, or change your losses or credits. You will most likely be required to fix your taxes through the filing of an amended return process.
It is essential to note that the IRS does not accept updated returns submitted electronically. You’ll have to send in a paper form if you want to make any changes.
The advantage is that if the IRS discovers the error first and sends you a letter or notice informing you of it, it may not be required for you to file an amended return.
Resolve With IRS
It is possible that differences can be resolved with the Internal Revenue Service. Even if you wind up paying extra, you can accept the letter and settle by the notice instead of modifying your payment schedule.
If you fail to record income, such as money from a side hustle, you will undoubtedly be required to file an additional amount and pay the penalty.
Plus, if you have unreported income, you should prepare to pay the taxes on that income before the deadline. If you don’t, you’ll be liable for interest on the sum that remains due. In addition, you may be subject to a late fees penalty.
Does Internal Revenue Service (IRS) double-check tax returns?
To perform a double check on a tax return, there must first be a trigger, and this trigger is frequently the Discriminant Function System, commonly known as DIF.
When you file your return, the Internal Revenue Service (IRS) uses a computer program to screen it for abnormalities by evaluating your information to the information from the records of other taxpayers who are like you.
Depending on their circumstances, their incomes may be in the same range, or they may live in the same zip code.
What Would Happen If You Filed Your Taxes but Forgot to Attach Your W-2?
If you forgot to include a copy of your W-2 with your tax return but still reported the income, you will not be required to file an adjustment and be subject to a penalty.
If you have forgotten to report income on your tax return, you can correct the problem by filing an amended return. However, you may be subject to a minor penalty or interest.
What Should You Do If You Receive an IRS Audit Notice?
The worst decision you can take when the Internal Revenue Service issues you an audit letter is to disregard it because, unfortunately, the problem isn’t going away anytime soon. You only have a limited time to reply before the audit letter becomes a tax bill.
Suppose you receive an audit notice from the Internal Revenue Service. In that case, you should consult with an experienced tax attorney who can assist you in dealing with the matter head-on for the best possible outcome.
Why Hire an Attorney?
If the revised return does not remedy all the problems in the initial return, the taxpayer may find itself in even more incredible difficulty with the IRS.
Although the Internal Revenue Service (IRS) has an informal policy of not pursuing taxpayers who voluntarily repair mistakes, the legal notice of the law does not allow for such tolerance to be extended.
In this case, consulting with a tax attorney would be the more cautious course of action. An attorney will review a tax return help you determine what to do if your tax returns are a mess. If the attorney thinks that a forensic investigation is required, the lawyer should employ a separate accountant to perform the analysis.
That way, the client-attorney privilege will be protected if the attorney provides advice to its clients.