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Amending Prior Years’ Income Tax Returns

If you believe that your prior years’ income tax returns contained errors warranting a refund, you should seek to have those tax returns amended.

Here’s the most important federal (IRS) rule that one should know:

To claim a tax refund, Form 1040X (Amended U.S. Individual Income Tax Return) must be filed within 3 years from the date of your original tax return or within 2 years from the date you paid the tax liability, whichever is later.

And it’s important to point out that tax returns that were filed before the due date (without regard to any extension) are considered to be filed on the due date.

Some of the reasons for amending a tax return include a change in filing status, the reporting of income properly, and the taking of deductions and credits that were not previously claimed.

The IRS and other tax professionals may suggest that taxpayers should not to file an amended tax return for simple math errors; however, Tax Attorney Kenneth Sheppard disagrees. A taxpayer should never rely on the IRS or any taxing authority to correct mistakes that are in favor of the taxpayer. If a math error is discovered, you should affirmatively act to file an amended tax return.

For each tax year that a claim for tax refund is sought, a separate Form 1040X is required to be filed. Form 1040X must be filed through regular mail; it cannot be electronically filed through the e-file system. It will take the IRS approximately 8-12 weeks to process your Amended Tax Return.

The filing of an amended federal income tax return will generally warrant amending one’s state income tax return as well. For example; In the state of Ohio, you can claim a tax refund within four (4) years from the date of the overpayment of the tax, interest or penalty. The statute of limitations period begins on the date that the Ohio income tax return was due (without extensions). 2008 Ohio Forms IT 1040 and IT 1040EZ were due on April 15, 2009; therefore, for 2008 Ohio Forms IT 1040 and IT 1040EZ, the four-year period begins on April 15, 2009.