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Superseding Tax Return v. Amended Tax Return

by | Jan 20, 2023 | Firm News

What should you do if you discover a mistake in your tax return after it is filed? There are a couple of options available to make corrections depending on when the error is discovered. Most taxpayers know that a tax return can be amended. The lesser-known and better option if an error is discovered early enough is to file a superseding return.

A superseding return is a tax return that is filed after an original return is filed, but before the filing due date.  If an error is discovered in a tax return before the filing due date (including valid extensions) passes, a superseding tax return can be filed to make the necessary correction. The IRS will, for most purposes, treat the superseding return as the original return disregarding the first return as if it were never filed. This is likely to avoid an accuracy related penalty the IRS may assert with filing an amended income tax return.

For that reason, a superseding return is preferred over an amended return. However, an amended return will need to be filed to make necessary corrections if the due date for filing has passed. While the IRS may assert penalties following the filing of an amended return, the taxpayer may still assert defenses to avoid penalties such as reasonable cause, or request “first time abatement” of penalties if there have been no penalties in prior tax periods.

The IRS now allows taxpayers to e-file both amended and superseding returns, and tax forms now have a box to check making it easier for the taxpayer to indicate when a return is superseding.

It is always best to be proactive when it comes to taxes. Promptly addressing tax problems, as with a superseding return, can often save time and money. If a mistake is discovered, it is best to correct it before the IRS initiates an audit. Speak to your tax professional any time you have questions about making a correction to your tax returns.