If you make an error on your personal return or become aware there is an error on your business tax return, there are options for correcting your return.
Honest errors on income tax returns are common. Making errors on individual returns is easy. The Internal Revenue Service (IRS) routinely reminds filers to double-check the math, include the right documents, and review deductions and expenses, if they have taken any. An error on a business return is also common. If your business routine was prepared by an accountant or other tax preparer, and the mistake was their error, you should expect they will correct your return.
If an error was made on your tax return due to incorrect or incomplete information you provided to your preparer, the responsibility to amend the document will fall to you. Regardless of who prepared the return—if you signed the return, you are ultimately responsible for its contents. If the error you made was not in your favor, it may cross your mind to let it go—the IRS may never figure it out and you can save a few dollars. This is not a good idea for a few reasons.
Oftentimes taxpayers make errors that reduce their refund—or increase their tax liability—by not taking advantage of available tax credits or deductions. The IRS is not likely to remind you of these opportunities, but you can amend your return within three years of the date of the original return or within two years of when you paid the tax. There is no reason to leave money on the table and you can oftentimes use Form 1040-X to correct or make other claims on an eligible return.
More worrisome are mistakes or willful omissions made on your return that underreport your income or serve to inaccurately reduce taxes paid. Failure to file a return when taxes are due, or willfully filing a false income tax return are fast ways to court the attention of the IRS. Even in those instances, working with an experienced tax attorney may give you options to disclose the returns and pay assessed penalties, fines, and the original taxes owed.
A pattern of willful reporting errors, the submission of falsified documents, or claims of deductions and expenses that cannot be supported could end up in an IRS criminal tax investigation. That could lead to charges of tax fraud or another tax crime.
It is far less expensive, in anxiety and money, to rectify any kind of mistake on your tax return before the IRS finds it first.
Speak with our experienced tax attorney today if you are facing an IRS audit or criminal tax charge
Serving local and international clients from offices in Chicago and Cleveland, the legal team at Robert J. Fedor, Esq., LLC delivers strategic representation and guidance with tax litigation, payroll tax issues, or compliance questions. Call 800-579-0997 or contact us online today.