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I've discovered that I miscalculated the capital gains owed on a tax return that was completed 5+ years ago. I believe the limit on filing an amended return is 3 years, so what is the cheapest and most expeditious way to handle reporting this and paying what's owed? Are there any websites that do a good job of discussing issues like this? I'd do a search on this board/site but I have a feeling that trying to find information on this topic would be like looking for a needle in a haystack. Any tips?

If you owe more tax, and it's a return from 5+ years ago, you may be "home free." It's beyond the usual open period for the IRS to make an adjustment.

However, if the error represents a significant portion of your reported income (I believe the magic number is 25%), your underreporting could be considered fraud, in which case the return is still "open." If this is the case, I would quickly find a tax professional with experience in handling these matters to determine how best to proceed.

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