Must I submit a revised tax return?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
sleepwell
Posts: 29
Joined: Sun Jul 10, 2016 11:28 pm

Must I submit a revised tax return?

Post by sleepwell » Tue Jul 10, 2018 5:51 pm

I am hoping that someone here can give me advice. In early April I received a phone call from Fidelity, which is the administrator of the retirement accounts for my non-profit employer. The Fidelity rep told me that the amounts listed on my 1099-R for my after-tax account were incorrect and that I would not owe as much tax as I might have thought, and she proceeded to give me the corrected amounts. I had already filed my tax returns in February and since the amount of the difference was rather small, I told the rep that I was not going to re-file. She seemed to get kind of upset and told me that I really needed to re-file and that my employer would give me $500 towards tax preparation fees. (There was not an option to decline the money - it just showed up as a direct deposit in my checking account.)

Anyway, I ran the new figures through TurboTax and the amount of refund I would get is $19 from the state and a bit more from the federal government. I cannot file these revised returns electronically. Is there any horrible consequence for not filing a revised tax return? If I OWED money, I would definitely re-file, but I don't. And now it is July and I have managed to waffle about this for way too long.

So, do I need to re-file? Thanks for your help. I apologize for the wordiness of my post.

Sleepwell

AerialWombat
Posts: 89
Joined: Tue May 29, 2018 1:07 pm

Re: Must I submit a revised tax return?

Post by AerialWombat » Tue Jul 10, 2018 5:57 pm

You are under no obligation to amend a return if it’s in the government’s favor. They appreciate your donation.

Gill
Posts: 4381
Joined: Sun Mar 04, 2007 8:38 pm
Location: Florida

Re: Must I submit a revised tax return?

Post by Gill » Tue Jul 10, 2018 6:43 pm

Don’t do anything and just enjoy the $500.
Gill

MarkNYC
Posts: 1319
Joined: Mon May 05, 2008 7:58 pm

Re: Must I submit a revised tax return?

Post by MarkNYC » Tue Jul 10, 2018 7:06 pm

AerialWombat wrote:
Tue Jul 10, 2018 5:57 pm
You are under no obligation to amend a return if it’s in the government’s favor. They appreciate your donation.
There is no legal obligation to file an amended tax return, regardless of whether the amended return would result in you owing more to the IRS or the IRS owing you a refund.

NotWhoYouThink
Posts: 1893
Joined: Fri Dec 26, 2014 4:19 pm

Re: Must I submit a revised tax return?

Post by NotWhoYouThink » Tue Jul 10, 2018 7:29 pm

If a corrected 1099 is submitted the IRS and state might adjust your return and send you a refund anyway.

MarkNYC
Posts: 1319
Joined: Mon May 05, 2008 7:58 pm

Re: Must I submit a revised tax return?

Post by MarkNYC » Tue Jul 10, 2018 7:39 pm

NotWhoYouThink wrote:
Tue Jul 10, 2018 7:29 pm
If a corrected 1099 is submitted the IRS and state might adjust your return and send you a refund anyway.
The IRS will not do that.

Gill
Posts: 4381
Joined: Sun Mar 04, 2007 8:38 pm
Location: Florida

Re: Must I submit a revised tax return?

Post by Gill » Tue Jul 10, 2018 7:39 pm

MarkNYC wrote:
Tue Jul 10, 2018 7:06 pm
AerialWombat wrote:
Tue Jul 10, 2018 5:57 pm
You are under no obligation to amend a return if it’s in the government’s favor. They appreciate your donation.
There is no legal obligation to file an amended tax return, regardless of whether the amended return would result in you owing more to the IRS or the IRS owing you a refund.
I can’t put my hands on it, but ive stated this in the past and have been reprimanded for promoting tax evasion. Mark, I know you’re correct.
Gill

sleepwell
Posts: 29
Joined: Sun Jul 10, 2016 11:28 pm

Re: Must I submit a revised tax return?

Post by sleepwell » Tue Jul 10, 2018 9:00 pm

Thanks, everyone, for your comments. I feel better now and will no longer worry about this.

AlwaysWannaLearn
Posts: 228
Joined: Mon May 28, 2018 8:37 pm

Re: Must I submit a revised tax return?

Post by AlwaysWannaLearn » Tue Jul 10, 2018 9:10 pm

.....
Last edited by AlwaysWannaLearn on Thu Jul 19, 2018 6:01 pm, edited 1 time in total.

AerialWombat
Posts: 89
Joined: Tue May 29, 2018 1:07 pm

Re: Must I submit a revised tax return?

Post by AerialWombat » Wed Jul 11, 2018 12:01 am

MarkNYC wrote:
Tue Jul 10, 2018 7:39 pm
NotWhoYouThink wrote:
Tue Jul 10, 2018 7:29 pm
If a corrected 1099 is submitted the IRS and state might adjust your return and send you a refund anyway.
The IRS will not do that.
The IRS does routinely do this. I have clients that get the checks. Heck, I just cashed one today for myself.

AerialWombat
Posts: 89
Joined: Tue May 29, 2018 1:07 pm

Re: Must I submit a revised tax return?

Post by AerialWombat » Wed Jul 11, 2018 12:15 am

MarkNYC wrote:
Tue Jul 10, 2018 7:06 pm
AerialWombat wrote:
Tue Jul 10, 2018 5:57 pm
You are under no obligation to amend a return if it’s in the government’s favor. They appreciate your donation.
There is no legal obligation to file an amended tax return, regardless of whether the amended return would result in you owing more to the IRS or the IRS owing you a refund.
There is no legal requirement to file the amended return, but if corrected information would result in additional tax, the additional tax must be paid. IRS will usually correct it on behalf of the taxpayer and send a bill. If IRS doesn’t catch it, or it’s an income item that won’t appear on an information return, the taxpayer is legally obligated to pay the extra tax —amended return filing or not.

Stinky
Posts: 96
Joined: Mon Jun 12, 2017 11:38 am
Location: Sweet Home Alabama

Re: Must I submit a revised tax return?

Post by Stinky » Wed Jul 11, 2018 3:55 am

sleepwell wrote:
Tue Jul 10, 2018 5:51 pm

Anyway, I ran the new figures through TurboTax and the amount of refund I would get is $19 from the state and a bit more from the federal government.
Sleepwell
I'd compare the amount of the refunds to the time required to do the filing. From your post, it sounds like you might get $50 collectively from state and federal. If I could do both amended returns in an hour, I would re-file; if it would take me 10 hours, I wouldn't bother unless I had nothing better to do with my time.
Actuaries have interaction with all parts of an insurance company. That allows them to annoy EVERYONE simultaneously.

spectec
Posts: 1127
Joined: Mon Jul 14, 2014 8:00 am

Re: Must I submit a revised tax return?

Post by spectec » Wed Jul 11, 2018 5:56 am

Gill wrote:
Tue Jul 10, 2018 7:39 pm
MarkNYC wrote:
Tue Jul 10, 2018 7:06 pm
AerialWombat wrote:
Tue Jul 10, 2018 5:57 pm
You are under no obligation to amend a return if it’s in the government’s favor. They appreciate your donation.
There is no legal obligation to file an amended tax return, regardless of whether the amended return would result in you owing more to the IRS or the IRS owing you a refund.
I can’t put my hands on it, but ive stated this in the past and have been reprimanded for promoting tax evasion. Mark, I know you’re correct.
Gill
Here's a good article regarding amending. There are others, but this one handles the question well, especially paragraphs 2 and 4.
https://www.forbes.com/sites/robertwood ... 99e4a547e5
Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it. - Will Rogers

MarkNYC
Posts: 1319
Joined: Mon May 05, 2008 7:58 pm

Re: Must I submit a revised tax return?

Post by MarkNYC » Wed Jul 11, 2018 9:29 am

AerialWombat wrote:
Wed Jul 11, 2018 12:01 am
MarkNYC wrote:
Tue Jul 10, 2018 7:39 pm
NotWhoYouThink wrote:
Tue Jul 10, 2018 7:29 pm
If a corrected 1099 is submitted the IRS and state might adjust your return and send you a refund anyway.
The IRS will not do that.
The IRS does routinely do this. I have clients that get the checks. Heck, I just cashed one today for myself.
I have never seen or heard of this. Can you provide some details of what actually happened that caused the IRS to send you the check? And did the IRS send you a CP2000 or CP2501 notice or other explanatory/calculation letter along with the check? Thanks.

MichCPA
Posts: 15
Joined: Fri Jul 06, 2018 9:06 pm

Re: Must I submit a revised tax return?

Post by MichCPA » Wed Jul 11, 2018 10:12 am

MarkNYC wrote:
Wed Jul 11, 2018 9:29 am
AerialWombat wrote:
Wed Jul 11, 2018 12:01 am
MarkNYC wrote:
Tue Jul 10, 2018 7:39 pm
NotWhoYouThink wrote:
Tue Jul 10, 2018 7:29 pm
If a corrected 1099 is submitted the IRS and state might adjust your return and send you a refund anyway.
The IRS will not do that.
The IRS does routinely do this. I have clients that get the checks. Heck, I just cashed one today for myself.
I have never seen or heard of this. Can you provide some details of what actually happened that caused the IRS to send you the check? And did the IRS send you a CP2000 or CP2501 notice or other explanatory/calculation letter along with the check? Thanks.
When I was in college I paid a tax estimate and my mom did on my behalf as well. The IRS sent me a notice about the error and I had to send the signed notice back for them to initiate a direct deposit. It definitely happens.

MarkNYC
Posts: 1319
Joined: Mon May 05, 2008 7:58 pm

Re: Must I submit a revised tax return?

Post by MarkNYC » Wed Jul 11, 2018 11:18 am

MichCPA wrote:
Wed Jul 11, 2018 10:12 am
MarkNYC wrote:
Wed Jul 11, 2018 9:29 am
AerialWombat wrote:
Wed Jul 11, 2018 12:01 am
MarkNYC wrote:
Tue Jul 10, 2018 7:39 pm
NotWhoYouThink wrote:
Tue Jul 10, 2018 7:29 pm
If a corrected 1099 is submitted the IRS and state might adjust your return and send you a refund anyway.
The IRS will not do that.
The IRS does routinely do this. I have clients that get the checks. Heck, I just cashed one today for myself.
I have never seen or heard of this. Can you provide some details of what actually happened that caused the IRS to send you the check? And did the IRS send you a CP2000 or CP2501 notice or other explanatory/calculation letter along with the check? Thanks.
When I was in college I paid a tax estimate and my mom did on my behalf as well. The IRS sent me a notice about the error and I had to send the signed notice back for them to initiate a direct deposit. It definitely happens.
Yes, the IRS will issue a refund check when actual tax payments are more than the amount reflected on the tax return, but that is not what we are discussing. We are discussing a corrected 1099 which reduces income, and will potentially reduce total income tax if the tax return is re-calculated, and whether the IRS will, in the absence of an amended return, go ahead and proactively recalculate the tax anyway and issue a refund check.

MarkNYC
Posts: 1319
Joined: Mon May 05, 2008 7:58 pm

Re: Must I submit a revised tax return?

Post by MarkNYC » Wed Jul 11, 2018 12:01 pm

AerialWombat wrote:
Wed Jul 11, 2018 12:15 am
MarkNYC wrote:
Tue Jul 10, 2018 7:06 pm
AerialWombat wrote:
Tue Jul 10, 2018 5:57 pm
You are under no obligation to amend a return if it’s in the government’s favor. They appreciate your donation.
There is no legal obligation to file an amended tax return, regardless of whether the amended return would result in you owing more to the IRS or the IRS owing you a refund.
There is no legal requirement to file the amended return, but if corrected information would result in additional tax, the additional tax must be paid. IRS will usually correct it on behalf of the taxpayer and send a bill. If IRS doesn’t catch it, or it’s an income item that won’t appear on an information return, the taxpayer is legally obligated to pay the extra tax —amended return filing or not.
Let's assume the IRS has no record of the additional income from a corrected 1099. You acknowledge there is no legal requirement to file an amended return, but claim there's a legal obligation to pay the additional tax that would be due if an amended return was filed? I disagree. Without an amended return, there is no assessment of additional tax, thus no additional tax liability. If a check is sent in by itself to pay what is believed would be the correct additional tax, there is no outstanding tax liability for the IRS to apply the payment against.

If there is a specific section of the code, or regulations, or other specific provision in the law that supports your position, please provide it. (no general statements, please)

AerialWombat
Posts: 89
Joined: Tue May 29, 2018 1:07 pm

Re: Must I submit a revised tax return?

Post by AerialWombat » Wed Jul 11, 2018 1:40 pm

MarkNYC wrote:
Wed Jul 11, 2018 9:29 am
AerialWombat wrote:
Wed Jul 11, 2018 12:01 am
MarkNYC wrote:
Tue Jul 10, 2018 7:39 pm
NotWhoYouThink wrote:
Tue Jul 10, 2018 7:29 pm
If a corrected 1099 is submitted the IRS and state might adjust your return and send you a refund anyway.
The IRS will not do that.
The IRS does routinely do this. I have clients that get the checks. Heck, I just cashed one today for myself.
I have never seen or heard of this. Can you provide some details of what actually happened that caused the IRS to send you the check? And did the IRS send you a CP2000 or CP2501 notice or other explanatory/calculation letter along with the check? Thanks.
Mine personally? Since you seem to also be a tax professional, mine was a CP49. I had a small overpayment from elsewhere applied to an ISRP (MFT35) that I didn't want to pay (my tiny annual protest), and they cut me a check for the $132 difference.

My clients definitely see them occasionally. It's not incredibly frequent, obviously, but it's not rare, either. Refunds generated from reduced income shown on a K-1 or a 1099-R are the most common.

AerialWombat
Posts: 89
Joined: Tue May 29, 2018 1:07 pm

Re: Must I submit a revised tax return?

Post by AerialWombat » Wed Jul 11, 2018 1:47 pm

MarkNYC wrote:
Wed Jul 11, 2018 12:01 pm
Let's assume the IRS has no record of the additional income from a corrected 1099. You acknowledge there is no legal requirement to file an amended return, but claim there's a legal obligation to pay the additional tax that would be due if an amended return was filed? I disagree. Without an amended return, there is no assessment of additional tax, thus no additional tax liability. If a check is sent in by itself to pay what is believed would be the correct additional tax, there is no outstanding tax liability for the IRS to apply the payment against.

If there is a specific section of the code, or regulations, or other specific provision in the law that supports your position, please provide it. (no general statements, please)
What you're describing is the criminal offense of tax evasion. You are required by law to pay tax on all income, "from whatever source derived", as defined in 26 U.S. Code § 61, defined here:

https://www.law.cornell.edu/uscode/text/26/61

Criminal statute defined here, in 26 U.S. Code § 7201:

https://www.law.cornell.edu/uscode/text/26/7201

TL;DR: If there's taxable income, the tax has to be paid. Whether you get caught or not is a different story, but the law is very clear.

Edit: An amended return is not required to create an assessment. You'll see "additional assessments" on account transcripts all the time. You can make a phone call or visit an IRS office and say, "I owe you $X, here it is." They'll post the voluntary assessment and happily take your money.

MarkNYC
Posts: 1319
Joined: Mon May 05, 2008 7:58 pm

Re: Must I submit a revised tax return?

Post by MarkNYC » Wed Jul 11, 2018 2:35 pm

AerialWombat wrote:
Wed Jul 11, 2018 1:40 pm
MarkNYC wrote:
Wed Jul 11, 2018 9:29 am
AerialWombat wrote:
Wed Jul 11, 2018 12:01 am
MarkNYC wrote:
Tue Jul 10, 2018 7:39 pm
NotWhoYouThink wrote:
Tue Jul 10, 2018 7:29 pm
If a corrected 1099 is submitted the IRS and state might adjust your return and send you a refund anyway.
The IRS will not do that.
The IRS does routinely do this. I have clients that get the checks. Heck, I just cashed one today for myself.
I have never seen or heard of this. Can you provide some details of what actually happened that caused the IRS to send you the check? And did the IRS send you a CP2000 or CP2501 notice or other explanatory/calculation letter along with the check? Thanks.
Mine personally? Since you seem to also be a tax professional, mine was a CP49. I had a small overpayment from elsewhere applied to an ISRP (MFT35) that I didn't want to pay (my tiny annual protest), and they cut me a check for the $132 difference.

My clients definitely see them occasionally. It's not incredibly frequent, obviously, but it's not rare, either. Refunds generated from reduced income shown on a K-1 or a 1099-R are the most common.
Your situation seems to involve a partial overpayment that was refunded rather than applied elsewhere. That is not relevant to the issue we're discussing, which is this: after the original return is filed, a corrected 1099 shows reduced income, and potentially reduced tax, and whether the IRS will, in the absence of an amended return, go ahead and recalculate the tax and issue a refund based solely on the corrected 1099.

It's not clear if your clients' situations apply either. Was the original K-1 or 1099-R income less than actually reported on the return, which caused the refund, or was a corrected 1099-R or K-1 issued that lowered the income and resulted in the IRS sending a refund check? If the latter, why would so many of your clients choose not to file an amended return to obtain the refund, not knowing if the IRS would ever send a refund without an amended return?

I remain skeptical that IRS, in the absence of an amended return, ever issues a refund based on corrected 1099 issued after the filing of the original tax return.

AerialWombat
Posts: 89
Joined: Tue May 29, 2018 1:07 pm

Re: Must I submit a revised tax return?

Post by AerialWombat » Wed Jul 11, 2018 2:47 pm

MarkNYC wrote:
Wed Jul 11, 2018 2:35 pm
AerialWombat wrote:
Wed Jul 11, 2018 1:40 pm
MarkNYC wrote:
Wed Jul 11, 2018 9:29 am
AerialWombat wrote:
Wed Jul 11, 2018 12:01 am
MarkNYC wrote:
Tue Jul 10, 2018 7:39 pm

The IRS will not do that.
The IRS does routinely do this. I have clients that get the checks. Heck, I just cashed one today for myself.
I have never seen or heard of this. Can you provide some details of what actually happened that caused the IRS to send you the check? And did the IRS send you a CP2000 or CP2501 notice or other explanatory/calculation letter along with the check? Thanks.
Mine personally? Since you seem to also be a tax professional, mine was a CP49. I had a small overpayment from elsewhere applied to an ISRP (MFT35) that I didn't want to pay (my tiny annual protest), and they cut me a check for the $132 difference.

My clients definitely see them occasionally. It's not incredibly frequent, obviously, but it's not rare, either. Refunds generated from reduced income shown on a K-1 or a 1099-R are the most common.
Your situation seems to involve a partial overpayment that was refunded rather than applied elsewhere. That is not relevant to the issue we're discussing, which is this: after the original return is filed, a corrected 1099 shows reduced income, and potentially reduced tax, and whether the IRS will, in the absence of an amended return, go ahead and recalculate the tax and issue a refund based solely on the corrected 1099.

It's not clear if your clients' situations apply either. Was the original K-1 or 1099-R income less than actually reported on the return, which caused the refund, or was a corrected 1099-R or K-1 issued that lowered the income and resulted in the IRS sending a refund check? If the latter, why would so many of your clients choose not to file an amended return to obtain the refund, not knowing if the IRS would ever send a refund without an amended return?

I remain skeptical that IRS, in the absence of an amended return, ever issues a refund based on corrected 1099 issued after the filing of the original tax return.
Sorry, but I don’t have the patience to keep going in circles with you on this. The IRS does match up corrected information returns to data reported by a taxpayer on a return, and will make calculations that result in refund checks being generated. This is what I do for a living, and I see it happen. Whether you are skeptical or not is immaterial to the fact that I see it happen.

Be well.

User avatar
CyclingDuo
Posts: 1534
Joined: Fri Jan 06, 2017 9:07 am

Re: Must I submit a revised tax return?

Post by CyclingDuo » Wed Jul 11, 2018 3:04 pm

sleepwell wrote:
Tue Jul 10, 2018 5:51 pm
I am hoping that someone here can give me advice. In early April I received a phone call from Fidelity, which is the administrator of the retirement accounts for my non-profit employer. The Fidelity rep told me that the amounts listed on my 1099-R for my after-tax account were incorrect and that I would not owe as much tax as I might have thought, and she proceeded to give me the corrected amounts. I had already filed my tax returns in February and since the amount of the difference was rather small, I told the rep that I was not going to re-file. She seemed to get kind of upset and told me that I really needed to re-file and that my employer would give me $500 towards tax preparation fees. (There was not an option to decline the money - it just showed up as a direct deposit in my checking account.)

Anyway, I ran the new figures through TurboTax and the amount of refund I would get is $19 from the state and a bit more from the federal government. I cannot file these revised returns electronically. Is there any horrible consequence for not filing a revised tax return? If I OWED money, I would definitely re-file, but I don't. And now it is July and I have managed to waffle about this for way too long.

So, do I need to re-file? Thanks for your help. I apologize for the wordiness of my post.

Sleepwell
Since you already have Turbo Tax, it's not going to cost you much at all outside of the printer ink, paper, envelope, and postage (maybe a few bucks total) to do the amended return. $19 is $19 (pays for more than a month of Netflix). :beer
M1 Finance - Set up your Three Fund Portfolio for free using VTI, VXUS, BND!

MarkNYC
Posts: 1319
Joined: Mon May 05, 2008 7:58 pm

Re: Must I submit a revised tax return?

Post by MarkNYC » Wed Jul 11, 2018 3:49 pm

AerialWombat wrote:
Wed Jul 11, 2018 1:47 pm
MarkNYC wrote:
Wed Jul 11, 2018 12:01 pm
Let's assume the IRS has no record of the additional income from a corrected 1099. You acknowledge there is no legal requirement to file an amended return, but claim there's a legal obligation to pay the additional tax that would be due if an amended return was filed? I disagree. Without an amended return, there is no assessment of additional tax, thus no additional tax liability. If a check is sent in by itself to pay what is believed would be the correct additional tax, there is no outstanding tax liability for the IRS to apply the payment against.

If there is a specific section of the code, or regulations, or other specific provision in the law that supports your position, please provide it. (no general statements, please)
What you're describing is the criminal offense of tax evasion. You are required by law to pay tax on all income, "from whatever source derived", as defined in 26 U.S. Code § 61, defined here:

https://www.law.cornell.edu/uscode/text/26/61

Criminal statute defined here, in 26 U.S. Code § 7201:

https://www.law.cornell.edu/uscode/text/26/7201
Once tax is assessed, there is legal obligation to pay it. But if the IRS has not assessed additional tax, and an amended return is not legally required, what is the legally-required process for a taxpayer to go about paying the additional (not-yet-assessed) tax?

MarkNYC
Posts: 1319
Joined: Mon May 05, 2008 7:58 pm

Re: Must I submit a revised tax return?

Post by MarkNYC » Wed Jul 11, 2018 4:09 pm

AerialWombat wrote:
Wed Jul 11, 2018 1:47 pm
MarkNYC wrote:
Wed Jul 11, 2018 12:01 pm
Let's assume the IRS has no record of the additional income from a corrected 1099. You acknowledge there is no legal requirement to file an amended return, but claim there's a legal obligation to pay the additional tax that would be due if an amended return was filed? I disagree. Without an amended return, there is no assessment of additional tax, thus no additional tax liability. If a check is sent in by itself to pay what is believed would be the correct additional tax, there is no outstanding tax liability for the IRS to apply the payment against.

If there is a specific section of the code, or regulations, or other specific provision in the law that supports your position, please provide it. (no general statements, please)
What you're describing is the criminal offense of tax evasion. You are required by law to pay tax on all income, "from whatever source derived", as defined in 26 U.S. Code § 61...
So, if an original return is filed all known income is properly reported, and a corrected 1099 later increases the income, and the taxpayer does not voluntarily pay the additional tax on the income increase, either with an amended return or some other way, you claim that would constitute criminal tax evasion? I think most tax attorneys might disagree.

Post Reply