Sometimes, even those who intended to accurately and fully execute their annual tax return make mistakes. Generally, if a paid tax accountant is responsible for this mistake, they will take steps to correct their error on your behalf as quickly as possible. For those who prepared and filed their own returns, however, this situation can quickly become a real predicament. Should you file a corrected return? How big should the error be before it’s required to file an amended tax return? And most importantly, does filing a correction to a previously filed tax form result in increased risk of an IRS tax audit?
Should you file an amended return?
There is no clear “yes” or “no” that can be universally applied to the question of whether it is in your best interest to file an amended or corrected tax return. These situations must be analyzed on a case-by-case basis, either by a very skilled tax accountant or, preferably, a tax attorney. Depending on the number of errors, the reason for their occurrence, and how severely they impact the other figures on the return, professionals may give different responses to how to handle the error.
In general, it is a commonly held belief that the best choice is to be honest and transparent when it comes to taxes. Whether you forgot to report interest from one of your investment accounts or failed to take advantage of deductions that would decrease your tax liability, these minor issues can actually change a lot of the figures on your tax return, requiring a new return to be filed in order to be accurate.
Amended returns can take many weeks to process, and unlike the original return, you must file them in paper form. While this delay can be stressful for some, it’s less stressful than hoping for years that the IRS doesn’t notice a discrepancy on your previous return.
How can a tax lawyer help?
Every single year, new laws are added to the tax code, and requirements and limits for different write-offs are changed. That means that the average citizen, with a cursory understanding of the nation’s tax law (at best) will struggle immensely to comprehend and comply with every single line of federal tax law. Whether you are working with a tax preparation specialist or simply using highly-rated tax preparation software, there’s potential liability that comes with ignorance of the code itself.
A tax lawyer’s job is to know and understand federal, state, and local statutes where they practice. From helping you protect your assets during an audit to advising clients on the best ways to minimize their tax liability, tax attorneys can be incredibly beneficial to many, especially those confronted with the awareness of a mistake on their tax return. An attorney can guide you to the best, safest route to correct any errors and to proactively protect yourself and your assets in future years.