IRS Corrections: What, When, Why and How?

Every BoomTax filing license comes with free unlimited corrections submissions. We hope you never have to use them, but you should know what they are, when to submit them, why they are necessary, and how to minimize them.

What Are Corrections?

After you’ve submitted your information returns to the IRS, they may come back as ‘Accepted with Errors’ or ‘Rejected.’ In order to amend these errors, you’ll need to correct your data and resubmit it to the IRS. You may also need to submit a correction if you or a recipient finds an error in their information.

Corrections let the IRS know that the initial data submitted is incorrect and provides them with the accurate information. There are two different types of corrections:

  1. One-transaction corrections, which include incorrect money amounts, codes, checkboxes, or a return filed when it should not have been filed, are easily corrected simply by submitting a new form with the correct information and the “Corrected” checkbox marked. These can be submitted electronically through your BoomTax account.
  2. Two-transaction corrections are a bit more complicated. These are corrections for Incorrect or missing Payee TINs or names, or when the wrong type of return was submitted. These corrections involve contacting the IRS via mailed letter to alert them of the error(s).

The most common errors are TIN match errors, where the TIN (SSN/EIN) submitted for a recipient does not match IRS records. We’ll discuss more about what you can do to avoid these errors a little further down.

When Should You Submit Corrections?

You should submit your corrections as soon as you know the information you filed is incorrect and have the accurate information.

If your filing is returned for corrections from the IRS, you should get with any recipients or entities to whom the error pertains and obtain the correct information to submit as soon as possible.

If a recipient alerts you of an error in their copy, you should obtain the correct information and submit it as soon as possible.

Submitting your corrections in a timely manner will help you to avoid being penalized. Remember that you must furnish new recipient copies of any forms to which you make a correction.

Why Should You Submit Corrections?

The short answer is: to avoid penalties from the IRS.

If you provide your recipient(s) with incorrect information, and they, in turn, submit their tax returns with information that does not match what you’ve submitted to the IRS, this can cause problems for you when the IRS receives conflicting reports.

How Can You Minimize Corrections?

The best way to minimize necessary corrections is to be proactive in collecting and maintaining your filing data. Different information returns have different submission deadlines, with the earliest being due to the IRS by January 31.

Still, many filers tend to put off gathering their information until mid- to late-December or even January. By the time the filing deadline comes around, they’re scrambling to collect their data with no time to verify it before submitting. This leaves them more inclined to make errors that they’ll have to correct later. Consider managing and auditing your filing data year-round or at least on a regular basis.

As we mention above, TIN matching errors are the most common reasons the IRS returns filings for corrections. The best way to get around this is to verify your TINs well in advance of the filing deadline.

TIN Verification

Products like TINCorrect offer TIN verification that can be used year-round, whether you would like to instantly verify a single TIN during your employee or vendor onboarding process or verify a batch of TINs during a regular audit. TINCorrect works by comparing the TIN information you have with IRS records. TINCorrect lets you know if there are any mismatches before you file.

Other Resources

We have a plethora of resources to ensure that you’re up-to-date on the latest tax news. Check out our Essential Guides to master all of your filing requirements or review our step-by-step guides for more information on preparing your filings. Always review deadlines to ensure that you’re one step ahead!

BoomTax, The Boom Post, and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors prior to engaging in any transaction.

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