Rejected Amended Tax Returns: What to do if this happens to you?

So you thought everything will be fine once you amended your tax return but what happens if the IRS rejected it? The process of determining what could have gone wrong won’t always be easy but if you follow these simple steps, it might not be that painful in your part:

1. Find out the reasons why the IRS rejected your amended return

Contacting the IRS is usually the first step to take. There is a phone number listed on your last notice, start there and call the IRS. If you know how the IRS talks about the details of your account, it would be easier to understand why your tax return was rejected. If you need help in navigating this step, consider consulting a tax professional.

Get more details by requesting for your IRS transcripts. All the activity on your account isn’t shown in your IRS transcripts so you might need to ask more questions. For example, the IRS can make changes to filed return or reject your amended return without telling you exactly why on your transcript. However, the transcript is capable of helping you piece together the details to better understand the IRS point of view or what they did wrong.

It can be difficult to interpret a transcript but a tax professional can greatly help you with this one.

2. Identify your options and go to the next step

You are not required to do anything else if you think the IRS denial has a basis and is correct. But for those who think the IRS reject their tax return without fairly looking at it, there are several options available for them.

If the reason behind the rejected amended return is a procedural error, the solution could be as simple as refiling the amended return as well as providing proof of an item on your return or filing another form.

Now if it’s a formal denial, things can get a bit more complicated as you might consider appealing your case.

You might have to address other issues. For example, if a past audit is a reason why the IRS has denied your amended return, you might need to request for audit reconsideration so that the audit results will be reversed.

You’ll have to file a petition about your rejected tax return with the IRS Office of Appeals if you don’t agree with the IRS’ decision.

• You have to use IRS Form 12203 for amounts of less than $25,000.
• You will need to create your own petition that includes the facts, law, argument, and your position for higher amounts.

You have up to 30 days from the day you received the denial letter to file the petition. But the IRS often allows appeals after the 30-day deadline because this process is more informal.

3. Go ahead with the Process to Appeals (if applicable)

There’s a similarity between appealing an amended return and audit appeals. You state your facts and legal argument to support your position in audit appeals. It’s possible for the appeal to happen through a phone call and may also involve more than one meeting with the appeals officer. This process may involve researching tax law or procedures to support your point of view about the denial, providing more information, and arguing the merits of your case.

Your request will be reviewed by an IRS appeals office and a decision will be made. You only have to expect the appeals officer to either agree, disagree or partially agree. Their decision will then be explained to you. From here, you have the choice to accept the decision or take the matter further to the courts.

You may want to consider hiring an attorney if you take an appeal to the courts. Unlike the IRS appeals, court procedures are much more formal for cases related to the rejected amended returns.

On the other hand, if you decide to hire a tax professional make sure you bring the following to your appointment:

• A copy of any notices pertaining to your tax situation
• Your original tax return and amended return copies for the year(s) that the IRS is questioning you with.
• All the information pertaining to the changes needed to your original tax return if you haven’t filed the amended return yet.
• Any account transcripts you’ve requested if you have them. If you don’t, your tax professional can help get them for you.
• A copy of any responses or petition you’ve sent to the IRS related to the amended tax return or rejected amended tax return.