Adjustment for Federal Tax After Taxes Have Been Filed
- Taxpayers can voluntarily amend their tax returns by mailing Form 1040X to the IRS if they notice they have made a mistake on their return. The normal processing time from the IRS's receipt of this form takes 8 to 12 weeks, after which point a taxpayer will receive a notice from the IRS accepting or rejecting the amended return. These corrections will cause an adjustment of federal tax due, which can cause the taxpayer to receive a larger refund from, or owe additional tax to the federal government.
- If the IRS notices a miscalculation on a tax return, the agency will correct the error automatically and then send a CP10, CP11 or CP12 form notifying the taxpayer of the error and whether the change resulted in an overpayment (refund) or underpayment (tax debt due). More serious adjustments can occur if the IRS believes that a taxpayer deliberately understated his income, in which case an IRS representative will contact the taxpayer, requesting that the latter provide information to the agency about the discrepancy.
- A taxpayer who makes adjustments to his federal return after filing has until the filing deadline of the following year to pay owed tax, at which point he can pay the owed tax out-of-pocket or have it taken out of his refund. This generosity only applies if the taxpayer sends in adjustments to the IRS within three years of filing an inaccurate return.
If the IRS owes him a refund, he will have received it not later than 12 weeks after the agency receives his amended return. If the IRS fixes a calculation error, a taxpayer will not usually experience any delays in receiving a refund. - If taxpayers owe money to the federal government and the IRS catches their errors, they will owe interest penalties until they send in owed tax, even if they made an honest mistake on their taxes. Interest accumulates after the due date of a return, even if the IRS doesn't send up a notice to the taxpayer requesting the owed tax up to 18 months after the taxpayer filed the return per Section 6601 of the Internal Revenue Code.
