Just because you filed your taxes wrong doesn’t automatically mean that the IRS will be going after you. However, it will always be wise and work to your advantage to make any necessary corrections immediately, regardless of whether a tax preparer filed your taxes, or you did it yourself. The consequences of an error are dependent on whether it has been determined to be willful or accidental by the IRS. What happens if I file my taxes wrong?
There are actually several mistakes that you or the tax preparer can make when filing your taxes, and each of these errors can be addressed in different ways accordingly.
Amended Returns
Any serious correction or error, like when your credits, deductions, income, dependents, or filing status was reported improperly will require that you file a modified return. An individual return can be corrected using Form 1040X.
This amended return should be filed on paper instead of electronically. If you committed errors on a tax return of more than one year, you have to file a 1040X for each one of them. These should then be made mailed in separate individual envelopes.
The amended returns resulting in new refunds should typically be filed within 3 years of the date that your original return was filed or 2 years from the time when your owed taxes were paid, whichever of these two is later.
Math Mistakes
In general, you are not required to file an amended tax return to correct any inadvertent mistake you made in your calculation. Most of the time, the IRS is the one that rectifies any errors in the math and will just bill you for the extra taxes you owed or adjust your refund as needed.
Similarly, if you didn’t submit the required form together with a paper return, you will receive a request for one from the IRS. There is also no need for you to modify your entire tax return unless they ask you to do so.
Missed Deadlines
For more serious errors, the IRS imposes some penalties that may include fines or even jail time. When you file your taxes without sending a checking or you filed them past the deadline and you still owe taxes, you will get a failure to pay the penalty that is 0.5% of the unpaid taxes you have every month. This can then increase up to 1% for each month that you don’t pay your balance after you receive the immediate demand for payment from the IRS.
Disregard and Negligence of Tax Rules
If you are not too careful in your attempt of obeying tax laws or you deliberately disregard the regulations of the IRS, expect that there will be more serious dangers waiting for you.
Errors that were identified to be due to fraud are often passed on to the Internal Revenue Service Criminal Investigation Division. This can lead to a penalty of 75% of the underpayment that will be added to your tax return.
Meanwhile, frivolous tax submissions like tax protesters who intentionally file incorrect amounts may be penalized for up to $5,000. There might also be some criminal penalties. For instance, trying to evade taxation has federal charges that may result in a fine of $250,000 and a jail time of up to 5 years.