Filing an amended return and paying any taxes owed is the correct and legal thing to do. This is not likely to trigger an audit.
Note: filing an amended return does not affect the selection process of the original return. However, amended returns also go through a screening process and the amended return may be selected for audit. Additionally, a refund is not necessarily a trigger for an audit.
You can check the status of an amended return around 3 weeks after you submit it. You should generally allow 8 to 12 weeks for your Form 1040-X to be processed. However, in some cases, processing could take up to 16 weeks. You can visit our processing status dashboard for more information on our timeframes.
Plus, an amended return that does not report a net increase in tax does not trigger any extension of the statute of limitations. If your amended return shows you owe more tax than on your original one, you will owe additional interest and probably face penalty fees.
It may not mean that your return will be selected for audit, but an amended tax return red flag generally means someone at the IRS will make sure that the return was done properly.
Extra Paperwork: Amending your current tax return may require you to amend previous returns. Even a minor change may require you to report changes in other tax years, which may not be worth the hassle.
It also includes items from any accompanying forms and schedules filed with the tax return. It doesn't reflect any amended returns or adjustments to tax made after the taxpayer filed their original return.
When your amended return has completed processing, the IRS will issue a new refund check. Allow 8 to 12 weeks for your amended return to be processed; however, in some cases, processing can take up to 16 weeks. For current processing status, check our processing status dashboard.
5 There is no statutory provision that authorizes the filing of amended returns or requires the IRS to accept them, although the IRS has discretion to accept them.
Unreported income
The IRS receives copies of your W-2s and 1099s, and their systems automatically compare this data to the amounts you report on your tax return. A discrepancy, such as a 1099 that isn't reported on your return, could trigger further review.
Do you need to correct the filing status on a past return? Are you concerned that if you file an amended return that it will trigger an IRS audit? If so—don't be. Amending a return is not unusual and it doesn't raise any red flags with the IRS.
Who Is Audited More Often? Oddly, people who make less than $25,000 have a higher audit rate. This higher rate is because many of these taxpayers claim the earned income tax credit, and the IRS conducts many audits to ensure that the credit isn't being claimed fraudulently.
The IRS has formally stated that audits do not automatically follow an amended tax return. If the amended return results in a significant change in your favor, and the circumstances surrounding the change seem suspicious, the IRS likely will start an audit.
Another easily avoidable audit red flag is rounding or estimating dollar amounts on your tax return. Say, for instance, you round $403 of tip income to $400, $847 of student loan interest to $850, and $97 of medical expenses to $100. The IRS is going to see all those nice round numbers and think you're making them up.
The reason there's a 7 year mark is because there's a 6-year limitations period for the IRS to assess tax if you substantially underreported your income or the cost basis for property. (The limitations period is otherwise only 3 years, so long as you filed a return.)
There is no penalty for simply filing an amended return. But if your mistake caused you to underpay tax, you will owe that additional tax. If you amend your tax return before the April deadline and pay the remaining tax you owe, you won't have to pay a penalty.
When you amend a tax return, it can take up to 16 weeks to process even if you e-file. If you file an amended return, you should still get the refund figured on the original return. Then, if your refund is larger due to the change, you'll get the difference between the original and amended amounts.
Taxes can be amended after three years, but you won't be eligible to receive your updated refund. Similarly, the IRS has a 3-year statute of limitations on tax audits in most cases. At this point, it can be thought of as bookkeeping with the IRS.
You can also check the status of your amended returns by calling the IRS Amended Return automated telephone line at 866-464-2050.
Does my IRS Transcript show if I am getting audited by the IRS? Yes, it can. Your Account Transcript will often flag you for an audit months before the IRS sends you a formal notification.
Direct deposit is not available on amended returns submitted on paper. Current processing time is more than 20 weeks for both paper and electronically filed amended returns, as processing an amended return remains a manual process even if it's filed electronically.
But, one thing is clear: Unlike an original Form 1040 – 90% of which are e-filed – amended returns are processed by an actual person at the IRS. That means the IRS doesn't automatically accept amended returns. However, the IRS won't open an audit (or, “examination”) simply because you file an amended return.
However, the IRS may find those errors and send you a notice. See the “Received a Notice” below, if you do receive a notice before filing a corrected return. if it is after the current year filing date: you will need to file a Form 1040X, Amended U.S. Individual Income Tax Return.