As we approach the filing deadline, here are four tips to help you handle those last-minute headaches.
1. What do I do if my taxpayer hasn’t received all the source documents, such as missing Partnership K-1?
For taxpayers who are missing source document, file an extension, and remember to enter estimated amounts into your tax software in order to generate a more accurate balance due on the extension form. If the amount paid with the extension is too low, the IRS can declare the extension invalid, which means you will have to pay interest and penalties back to April 15 (April 18 for 2016).
2. What do I do if I find an error on an already filed return?
If an error is found on an already filed tax return, you have to file paper Form 1040X. The IRS does not currently support electronic filing of amended individual returns. If the original return was recently filed, allow enough time for the original return to make its way through the IRS system before filing the amended return. For example, if you are filing a claim for an additional refund, wait until you have received the original refund before filing Form 1040X.
3. What do I do if I have an efile reject the week of the deadline?
The IRS has what is called a “perfection period,” a window of time that allows e-file rejects to be corrected, even if they fall after the filing deadline. According to IRS publication 4164, when a previously rejected return is “accepted” by the IRS within the five-day transmission perfection period, it will be deemed to have been received on the date that the first reject occurred during that five-day period. The perfection period for business returns is 10 days. For example, this means that an individual return rejected on April 14 has until April 19 to be transmitted and accepted.
4. What do I do if I have a taxpayer who cannot pay the amount due?
The IRS offers an extension of time to pay via an online payment agreement. The online payment agreement is available for taxpayers who owe less than $50,000 and need an additional 60 to 120 days to pay the tax in full. Taxpayers using this method will generally owe less in penalties and interest than if they used an installment agreement. If more than $50,000 is owed, or more than 120 days is needed to pay the balance, then Form 9465, Installment Agreement Request, must be used.
For more information and resources, visit the Tax Pro Center.