Does Amending Taxes Trigger an IRS Audit?

Whether amending a tax return increases the risk of an audit is a common concern for taxpayers. While the official position of the Internal Revenue Service (IRS) is that filing an amended return does not automatically trigger an audit, certain modifications to a return may indeed attract additional scrutiny.

Understanding the factors that influence the IRS selection process for audits, as well as implementing strategies to minimize potential red flags, can provide significant peace of mind to taxpayers considering amended returns.

Tax Relief Counsel helps clients navigate and resolve federal tax matters, including amended returns and audits. In this article, we will comprehensively examine the landscape of amended returns, addressing key topics such as audit triggers, risk minimization strategies, processing timelines, and effective preparation methods.

What Triggers an IRS Audit?

The prospect of an IRS audit can send shivers down the spines of taxpayers, conjuring up images of complex paperwork, lengthy negotiations, and potential penalties. While the fear of an audit is understandable, it’s crucial to understand the factors that trigger these examinations and what you can do to minimize your risk.

An IRS audit is a detailed review of a taxpayer’s tax return to verify the accuracy of the reported information and ensure compliance with tax laws.

While audits can be initiated for various reasons, the most common triggers include:

  • Significant income discrepancies: Discrepancies between reported income on the current return and previous years’ returns, or large unexplained income sources, can raise red flags and increase the likelihood of an audit.
  • Claimed deductions or credits: Claiming deductions or credits that exceed typical norms for your income level or type of business can draw attention from the IRS.
  • Incomplete or inconsistent information: Missing documents, calculation errors, or conflicting information can indicate potential discrepancies and increase the risk of an audit.
  • Random selection: While uncommon, the IRS does randomly select a small percentage of returns for audits to monitor overall compliance.
  • Referral triggers: Reports from employers, financial institutions, or whistleblowers alleging potential tax irregularities can prompt audits.

The IRS carefully reviews referrals and conducts thorough research before initiating an audit. Agents consider factors such as the credibility of the source, the nature of the allegations, and the taxpayer’s overall tax history.

When it comes to audited and amended returns, the consensus among IRS officials and professionals is that filing an amended return does not automatically trigger an audit. However, specific changes to the amended return, such as substantial modifications to income amounts or deductions, could raise red flags.

How Can You Minimize the Risk of an Audit when Filing a Tax Return?

While no foolproof method exists to eliminate the risk of an IRS audit, there are several strategies and best practices that taxpayers can adopt to minimize their chances of being scrutinized:

  1. Filing accurate and complete returns is the cornerstone of reducing audit risk. Carefully review your tax return for errors or omissions, making sure all income, deductions, and credits are accurately reported and supported by documentation.
  2. Maintaining proper documentation is crucial for supporting your deductions and credits and demonstrating compliance with tax regulations. Organize and maintain receipts, invoices, and other supporting documents for at least three to seven years, depending on the type of deduction or credit.
  3. Seeking professional tax assistance from an IRS audit lawyer when necessary is a valuable strategy for minimizing audit risk. A qualified tax professional can help you prepare accurate returns, identify potential deductions and credits, and ensure compliance with tax laws.

Promptly addressing issues identified during an audit can significantly reduce penalties and complications. Therefore, you should work collaboratively with the IRS agent to resolve issues, provide additional documentation if requested, and consider seeking professional representation.

Tax Relief Counsel is dedicated to guiding clients through challenging circumstances to achieve positive outcomes. We leverage technology to enable convenient access to professional advice, and we’re committed to providing affordable services that meet high standards. If you need tax relief, we’re here to find a solution and communicate with you every step of the way.

How Long Does It Usually Take the IRS to Process Amended Returns?

Filing an amended tax return using Form 1040X is a common practice to correct errors or make changes to previously filed tax returns. While the IRS strives to promptly process amended returns, the processing time can vary.

According to IRS guidelines, the average processing time for amended returns is 4 to 12 weeks. However, this timeframe can be influenced by factors such as the complexity of the return, the volume of amended returns received, and the availability of resources at the IRS.

To track the status of your amended return, you can use the IRS’s online tool Where’s My Amended Return?, or call the IRS taxpayer assistance line. If your amended return significantly exceeds the expected processing time, you can contact the IRS to inquire about its status and potential delays.

How Can I Prepare to Amend Tax Returns?

Amending tax returns can be daunting, but it’s important to ensure your records are accurate. Working with our tax audit attorney can simplify the process and help you complete each step appropriately. Our virtual services allow you to have convenient face-to-face meetings and securely sign and share documents.

Here’s a comprehensive guide to help you understand what to expect and navigate the process smoothly:

Step 1: Gather Necessary Documentation

Before starting, gather all relevant documents supporting the changes you’re making, such as receipts, invoices, or supporting forms. These documents will be crucial for verifying your amended figures and substantiating the reasons for the change.

Step 2: Complete the Form Accurately

Download and carefully fill out Form 1040X, the IRS form specifically designed for amending tax returns. Enter accurate and complete information, including the year of the return you’re amending, the reasons for the refund or amendment, and the corrected figures.

Step 3: Explain the Reason for the Amendment

Thorough explanations are essential to help the IRS understand the nature of the amendment request and your justification for making the changes. Clearly state the reason for the amendment, whether it’s correcting an error, claiming a deduction or credit you missed, or reporting a new income source.

Step 4: Calculate the Corrected Figures

Make sure you accurately calculate the corrected figures, including any adjustments to income, deductions, credits, or tax liability. Use the applicable formulas and tax tables to ensure your calculations are precise.

The Bottom Line

Filing an amended return won’t automatically trigger an audit, but certain changes might raise concerns.

Remember, tax compliance is about more than just meeting legal obligations; it’s about securing your financial future. By taking proactive measures and seeking professional support, you can confidently navigate the complexities of taxes and optimize your financial outlook.

If you need assistance with an IRS audit, contact our skilled tax lawyer in Washington, D.C. Tax Relief Counsel serves clients in D.C., Maryland, and Michigan, but we also help clients around the world navigate off-shore tax regulations and resolve IRS audits, appeals, and examinations. Get a free consultation today!

Ramy Shabana

Ramy Shabana


Ramy Shabana, an award-winning attorney, is renowned for his expertise in tax law. Recognized as a “Top Lawyer” by Hour Detroit Magazine, he is a trusted authority in navigating complex tax challenges for individuals and businesses. With a focus on both domestic and international tax law, Ramy offers unparalleled guidance in audits, collections, and international tax complexities.

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