Messed Up on My Taxes–How Long Do I Have to Fix Them?

By Jamie Waggoner 

Mistakes happen, especially when it comes to taxes.  In life we may end up filing 30, 40, 50, even 60 or 70 tax returns and there’s just no way to expect that anyone would have a perfect record.  Not when the tax code is more than 70,000 pages long!

A common concern we hear from tax clients, and even from our Pronto Tax School Members, is how long do you have to fix a tax return after a mistake is made.

So, let’s talk about that in this blog post and see if we can give you some information about how long you have to correct mistakes on taxes…

Don’t (Generally Speaking) Worry, You Have Time

The good news is that, in most cases, you don’t have to freak out because, generally speaking, you have plenty of time to fix your taxes if you mess up.

Statistics suggest that 70% of IRS audits are now what’s called “correspondence audits,” meaning you don’t go to the IRS in person, they send you a letter.  The most common letter is called a CP2000.  The CP2000 identifies “discrepancies” between your tax return and the income information reported by payers of income; so for example, if you forgot about a W-2 from a part-time job, the IRS will send you a CP2000 letter saying “hey, you didn’t report this W-2.”

CP2000 letters generally go out within two years of filing your tax return.

So if you forgot about a W-2 or some other similar issue, you have some time to get it corrected before IRS will contact you.

HOWEVER, just because you can wait does not mean you should wait.  You’re supposed to correct the mistake promptly.  And plus IRS will charge interest for all the time that you wait and don’t correct the mistake so it’s better to get it corrected promptly.

What To Do When You Find a Mistake

When you have figured out there was a flaw in your taxes, you will have to refile them.  This is called an amended return, which is a document you file with your taxes stating what was wrong and what you fixed.

It happens to a lot of people, so common there is nothing to be embarrassed about.  Millions of people file amended returns every year.  It’s just a part of the process and fortunately IRS provides this relatively simple way to correct a mistake.

Special Cases

Now you know if you’re a regular reader of this blog that we always say thingss like “generally speaking” and give other “disclaimers” stating that we’re providing general information, not specific tax advice.  In taxes, you have rules, and then you have exceptions to rules–and there are PLENTY of both of those.

Now when it comes to correcting tax mistakes, it’s the same.  Generally speaking, the IRS can only pursue you for taxes within 10 years of you filing the tax return.  So if you discover a mistake you made in 1986, IRS can’t come after you for those taxes, generally speaking.

In special cases, however, IRS uses an unlimited statute of limitations where the IRS can come after you for a mistake that you never corrected.

These cases occur when fraud has been committed, or 25% of the income wasn’t reported.  In those cases, IRS can come after you for the tax any number of years later.

Listen, no one wants to be on the IRS’s bad side, and a lot of the anxiety from tax mistakes comes from that fear.

Hopefully this blog post has oriented you to some of the considerations as to how scared you should be, depending on your situation.  Believe it or not, some people get so scared about a mistake on their taxes that they don’t correct it–and then that’s what actually causes a huge problem, when in reality they could have just filed an amended return and gotten it taken care of.

If you are interested in learning more about taxes so that you avoid IRS problems and keep more of the money you earn in life, try our Basic Income Tax (Federal & California) course, guaranteed you will learn stuff that you never knew and that’s actually relevant to your real life.

About the writer: 

Jamie Waggoner is a Communication Major at University of North Carolina-Wilmington (UNCW).  Jamie’s favorite course at the moment is Integrated Marketing, which shows how smart companies use storytelling and word-of-mouth to develop authentic and compelling relationships with their customers and the general public.  Jamie did not realize when she accepted an internship at Pronto Tax School that she would become a tax expert, but hey, life is full of surprises and that’s a good thing.