Should a Client File an Amended Tax Return?

July 16, 2020  |  New York Law Journal

From time to time, tax professionals learn that a client previously filed a false return, either as a result of an innocent mistake or due to fraud. While a taxpayer is under is no legal obligation to correct a previously filed return, there are often good reasons to do so. In this article, we discuss factors to be considered in advising a client as to whether to amend a return, including the applicable standards of conduct and alternatives available when the initial return fraudulently underreported income or overstated deductions. We also highlight the care that must be taken in deciding whether the benefits of amending returns warrant the risk of making admissions that could color any subsequent criminal prosecution and conclude by noting that, because Form 1040-X requires a taxpayer to swear under penalties of perjury that the amended return is complete and accurate, a client cannot correct one error on the originally filed return without curing all such errors.

Should a Client File an Amended Tax Return? (pdf | 286.02 KB)