What Does the IRS Do With Incorrect or Incomplete Tax Paperwork?

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Incorrect tax paperwork can result in several actions by the Internal Revenue Services (IRS). These can vary according to each form you file, whether you owe money, or based on how the fault likely originated. In many cases the IRS has the ability to fine you for supplying them with incorrect tax paperwork, like leaving a social security number off a return. If you are owed money, the IRS may be more lenient and simply ask you to re-file your forms.

It’s not uncommon for someone to make a mistake that results in incorrect tax paperwork. Math errors especially on personal income tax returns are quite common. Frequently, if the error is small one, the IRS will merely make the adjustment, and send you a statement showing the change. It’s important to keep copies of your tax return so you can be certain that the error was yours and not the IRS.

There are usually no fines, fees or penalties that attach to incorrect tax paperwork where you still get a refund. The same may not hold true if your error actually shows you owe taxes, where you estimated that you didn’t. In this case, you certainly may be charged penalties on the money owed, and will receive a payment request in addition to comments about the amendments on your return that were required because of incorrect tax paperwork.

If you file incorrect tax paperwork that is intentionally fraudulent, you may not only be subject to fees and penalties but also to criminal prosecution. For example, if you leave your tax form incomplete to avoid paying fees, you can be in for a rough time with the IRS. Most people simply make a mistake when filing which creates incomplete or incorrect tax paperwork. A few common examples of both of these are:

  • Math errors
  • Failing to put social security numbers on joint returns, or list them with dependent children
  • Forgetting to sign returns
  • Forgetting to include all W-2s or 1099s
  • Failing to file additional forms to claim exemptions

If after sending incorrect tax paperwork, you notice a mistake on your return, you can usually file an adjustment form — with income tax this is called a 1040X. If you do owe additional money, you should pay this as quickly as possible to avoid additional fees. Sometimes you will catch something the IRS doesn’t, but if later you are audited or your return is reviewed, you would still be responsible for extra fees. You might face extremely heavy penalties if the mistake is not corrected immediately, up to 25% of the amount owed. If you filed incorrect tax paperwork that underestimated your refund amount, you usually have three years to file the 1040X to request additional refunds from the IRS.

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New: Discuss this Article

Posted by: WGwriter
Hi anon11381

We have an article coming out on this topic in a couple of days: What Can I Do If I Inadvertently Made a Tax Mistake When I Filed? Look for it. Basically though, you can amend your return by filing a 1040X. You can download form and instructions from the IRS website.

Editor's reply: it's already posted! check out what can i do if i inadvertently made a tax mistake when i filed? for more information on correcting a tax mistake.
Posted by: anon11381
If you realize you included a deduction in your return you should not have which will reduce your refund, then what action should you take? Will the IRS pick up this mistake, thus meaning you should wait to hear from IRS instead of filing an amended return?

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