IRS Announces Taxpayers Can Now E-File Form 1040X

The IRS has finally moved ahead on its plan to allow Form 1040X to be filed electronically, which has been a long time coming for many accounting professionals.

Jun 3rd 2020
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It’s been a long time coming, but the IRS has finally announced plans to allow e-filing of Form 1040X (IR-2020-107, 5/28/20). The option is expected to be available later this summer through various software products.

This has been the “holy grail” for many members of the tax community who have been frustrated by the status quo. Currently, amended returns must be filed on paper and mailed to the IRS, even if the initial return was filed electronically.

Taxpayers may file an amended return to correct a previous error or to react to a tax law change. Generally, to claim a refund, a taxpayer must file Form 1040-X within three years of the date the original return was filed or within two years after the date the tax was paid, whichever is later.

In its press release announcing the plan, the IRS acknowledged that allowing Form1040-X to be filed electronically has been a major goal for awhile. It's also been an ongoing request from tax professionals and a continuing recommendation from the Internal Revenue Service Advisory Council (IRSAC) and Electronic Tax Administration Advisory Committee (ETAAC).

For years, the IRS has encouraged e-filing of initial returns, so it’s somewhat surprising it has taken so long to facilitate electronically filed amended returns. E-filing for original returns is generally required of tax professionals who file more than ten returns a year on behalf of clients.   

The new electronic option will allow the IRS to receive amended returns faster while minimizing errors normally associated with manually completing the form. 

"This new process is a major milestone for the IRS, and it follows hard work by people across the agency," said IRS Commissioner Chuck Rettig in the press release. "E-filing has been one of the great success stories of the IRS, and more than 90 percent of taxpayers use it routinely. But the big hurdle that's been remaining for years is to convert amended returns into this electronic process. Our teams have worked diligently to overcome the unique challenges related to the 1040-X, and we look forward to offering this new service this summer."

The IRS says that about three million amended returns are filed by taxpayers each year.

The e-filing option will also provide the IRS with more complete and accurate data in an easily readable format to enable customer service representatives to answer taxpayer questions. Taxpayers can still use the "Where's My Amended Return?" online tool to check the status of a Form 1040-X filed electronically.

When the new option becomes available, only tax year 2019 Forms 1040 and 1040-SR returns may be amended electronically. Taxpayers will still have the option of submitting a paper version of Form 1040-X. More enhancements are planned for the future.

"Adding amended returns to the electronic family also complements our partnership with the tax software industry, which continues to work with us to provide better ways to help taxpayers," noted Ken Corbin, Commissioner of the IRS Wage and Investment Division.

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