If you made an inadvertent mistake on a calculation, you’re generally not required to file an amended return to correct it. The IRS typically corrects any math errors and bills you for the additional taxes owed or adjusts your refund. Similarly, if you neglected to submit a required form with a paper return, the IRS will send you a request for one: unless they ask, you don't need to amend your entire return.
More serious errors or corrections, such as if your filing status, dependents, income, deductions or credits were reported incorrectly, require you to file an amended return. Use Form 1040X to correct an individual return. You have to file an amended return on paper, rather than electronically. If you made errors on more than one year's tax return, you need to file a 1040X for each, and mail each in a separate envelope. Amended returns that result in new refunds generally need to be filed within three years of the date you filed your original return, or two years from when you paid the taxes owed, whichever is later.
The IRS imposes penalties for more serious errors, which may include fines or jail time. If you file your taxes after the deadline and owe taxes, or if you file without sending a check, you’ll have a failure-to-pay penalty of 0.5 percent of your unpaid taxes each month, which increases to 1 percent for every month that the balance is unpaid after an immediate demand for payment arrives from the IRS.
Negligence and Disregard for Tax Rules
If you’re careless in your attempt to obey tax laws or willfully disregard the IRS regulations, the dangers are more serious. Errors determined to be the result of fraud typically are referred to the Internal Revenue Service Criminal Investigation Division and can result in a penalty of 75 percent of the underpayment added to your return. “Frivolous” tax submissions, such as tax protesters who deliberately file false amounts, may be assessed a $5,000 penalty. Criminal penalties also may result. For example, attempting to evade taxation carries federal charges that can bring a $250,000 fine and five years in jail.