https://www.freep.com/story/money/personal-finance/susan-tom... The Internal Revenue Service said in mid-February that it had yet to process 6.7 million individual income tax returns for 2019, based on data through Jan. 30. Getting those returns processed — and any refunds involved in hand — may require additional review, dealing with corrections and addressing some ID theft-related problems where the IRS will need to work with taxpayers, according to the IRS.
As far as I know, the eight 2019 tax returns we had filed electronically were processed. The IRS and state cashed the checks. Refunds were received. All were filed in March 2019. Probably none required review by an IRS agent. Because estates and trusts were involved, tax returns were filed by 3 different CPAs and a couple of the personal returns with tax software. With a large number of beneficiaries including a special needs trust professional tax help and legal advise was necessary. A friend used the tax software I purchased and she filed for 2019 on paper near the April 15th deadline. Her return hasn't been processed by the IRS. I don't know about the state return. She as always makes her taxes complicated. Surprisingly since she wasn't able to pay both her federal and state liability, she actually followed my recommendation. She paid the state in full and made a partial payment to the IRS. She hasn't been able to work out a payment plan with the IRS because they have yet to process her 2019 return. We will see if the IRS or state contacts my crazy brother-in-law about the $140 2019 1099 he missed. I try not to be involved with his taxes. It isn't enough of a mistake to justify filing an amended return. He just received a consolidated 1099 for 2020 because he sold inherited stock. That is definitely not going well.
An important point to note here: the law does not require you to file an amended return. If you filed your initial return in good faith, the regs state that you should file an amended return but it is not required. Case law has interpreted this to mean it is not mandatory. Of course, if the IRS catches any underreported income etc, you will be obligated to pay the tax, interest and any penalties, but you do not need to amend. Mike
Mike,Very true. The IRS will catch the errors and ask for payment eventually. The question is on the interest and penalties. We do not know if the IRS will forgive some penalties and interest because of their delay in processing and checking.If you have a significant dollar change you may want to file an amended return.This could eliminate interest and penalties. It could also get you a refund if due sooner.The IRS just last week released new 1040-X forms and instructions.The 1040-X just released can be used for multiple years including 2020 returns if you already filed 2020.Tax software companies are updating their software packages between Feb 24 and middle of March to allow filing of some of the amended returns.1040-X - https://www.irs.gov/pub/irs-pdf/f1040x.pdf1040-X instructions - https://www.irs.gov/pub/irs-pdf/i1040x.pdf
Of course, if the IRS catches any underreported income etc, you will be obligated to pay the tax, interest and any penalties, but you do not need to amend.Mike I didn't realize that correcting honest mistakes wasn't required. If it is a significant mistake then filing for a refund or to minimize penalties/interest would be reasonable. It isn't worth filing an amended return for a possible $15 in additional taxes.
I should point out for the tax preparers on this board, you should recommend to your client to file an amended return despite the fact they are not obligated to do so. Mike
...if the IRS catches any underreported income etc, you will be obligated to pay the tax, interest and any penalties, but you do not need to amend...Yep, don't bother amending unless you have new solid info and the difference will be in the thousands.My dad failed to file for several years, and when, years later, I tried to get all that caught up, I sent his CPA all the 1099's etc I could find (or get replacements for), but I knew several were missing. "Just extrapolate," I told her.Sure enough, her guesses were off by a few hundred dollars, and a couple of years after we filed and paid, the IRS reconciled their records with what had been submitted, and sent bills for the difference, including interest and penalties. The interest & penalties were a lot less than I'd expected. I think they max out at some percentage of the amount due.
addressing some ID theft-related problemsI filed electronically today. I thought IRS was pretty careful about identity. They required info from drivers license, plus info from last years return, plus pin. It should be tough for a thief to get all of those.But of course, legitimate filers who lack some of that info could encounter delays while IRS sorts it out.
It probably wasn't the IRS that required your driver's license information, but the state. The IRS doesn't require it for e-filing. Some states have requirements that you include information from government issued ID (typically a driver's license), and the number of states requiring this increases every year.Ira
They required info from drivers license, plus info from last years return, plus pin. I agree with Ira. I don't collect driver's license info from my clients since my state doesn't require it. I've already got enough info in my files to create an identity theft nightmare for my clients. I'm not going to collect any more info that I don't need.Last year's return info is also not required. I'm sure my software includes it for anyone I did in the previous year. But I don't add it for new clients. And the PIN for the signature is a joke. You can put whatever PIN down you want. I see no benefit at all from it. It is not pre-shared with the IRS. However, the identity theft PIN is useful. If you are a victim of ID theft (or a resident of a test area) you can ask the IRS to issue a PIN to you that must be included with your electronically filed return. The IRS will not accept your return without that PIN.--Peter
However, the identity theft PIN is useful. If you are a victim of ID theft (or a resident of a test area) you can ask the IRS to issue a PIN to you that must be included with your electronically filed return. The IRS will not accept your return without that PIN.I was a victim of ID theft years ago and receive a PIN from the IRS every year. When it occurred, the only way to get a PIN was to be a victim of ID theft. I thought that policy was crazy at the time and thought anyone who wanted a PIN should get one. I don't know if the IRS has changed that policy. It would help eliminate a lot of fake returns.PSU
Starting this year, anyone may opt-in to get a PIN: https://www.irs.gov/identity-theft-fraud-scams/get-an-identi...
I used the H&R Block basic program. It requested all three id items. The IRS accepted my e-filing in less than an hour.
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