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Sometimes taxpayers may need or want to make a change after they have already timely filed their tax return with the IRS. This is not an unusual occurrence and there are a variety of reasons that can give rise to this situation. Individual or business taxpayers may experience a change in circumstances, may receive relevant information late, or may discover something was missed on their original filing. Rarely does the law provide taxpayers with opportunities for what basically amounts to a tax filing do-over of sorts. Depending on the timing and circumstances, taxpayers may have the remedy to file a superseding return. Read on to learn more before you timely file a corrective or revised return with the IRS.
Both superseding returns and amended returns can be filed to change or correct information after the taxpayer has already timely filed an original return. Despite this shared purpose, these are different types of returns that present unique considerations for taxpayers.
Generally, superseding returns are intended to replace or supersede (hence the name) a timely filed original return with a subsequent timely filed return. Superseding returns change items reported on an original return and must be timely filed before the original filing deadline, including extensions. The changes made by a superseding return are, in effect, incorporated into and relate back to the original return. Because it must be filed before the applicable deadline, a superseding return can only be filed within that limited window of time.
In contrast, an amended return changes items reported on an original return but is filed after the original filing deadline, including extensions. Generally, the deadline for refund claims is the later of either three years from the date the original return was filed or two years from the date the tax was paid. The filing of an amended return modifies the original filed return, and the IRS treats it as the taxpayer’s return of record. Whereas taxpayers file superseding returns using Form 1040, U.S. Individual Income Tax Return, amended returns are filed differently using Form 1040-X, Amended U.S. Individual Income Tax Return. Both types of returns can be filed electronically.
Superseding returns provide taxpayers with privileges that amended tax returns simply do not. Notably, the tax code makes certain elections irrevocable and statutorily required to be on a timely filed original tax return
When a change needs to be made to an election that is required by statute to be on an original return, a timely filed superseding return is a potential remedy, but an amended return is not.
To illustrate, here is an example applicable to both individual and business taxpayers: Let’s suppose the taxpayer timely filed their original return and elected to carry forward the overpayment and apply it to their tax obligations for next year. Subsequently, but still before the filing deadline, a change in circumstances causes the taxpayer to determine it is more beneficial to receive their refund in the current year instead. Here, the taxpayer may timely file a superseding return with the IRS to update their refund election.
Business taxpayers that receive Schedule K-1 (Form 1065), Partner’s Share of Income, Deductions, Credits, etc., sometimes receive the information so late that it frustrates their ability to timely file an accurate return. In this situation, business taxpayers may find value in requesting an extension to preserve the ability to correct or change a tax item via a superseding return in the event information is received late.
Filing a superseding return does not eliminate the remaining time for filing before the deadline expires, if any. For example, a taxpayer who files their Form 1120, U.S. Corporation Income Tax Return, on September 10, but has an IRS approved filing extension until October 15, may still timely file a superseding return by October 15. In the event it ever becomes necessary, taxpayers are not restricted from filing multiple superseding returns.
The statutory deadlines for the IRS to assess a tax liability and for a taxpayer to claim a refund are two of the most important considerations for taxpayers. In most circumstances, once these periods have passed, the tax year is considered closed for taxpayers and the IRS. Under IRC § 6501, the IRS must assess tax within three years after the return for that year was filed unless an exception applies. The statutory deadline for the IRS to assess tax is referred to as the Assessment Statute Expiration Date (ASED). Likewise, IRC § 6511 sets forth that a taxpayer must file a claim for refund of any tax within three years from the time “the return” was filed, or two years from the time the tax was paid, whichever period expires later (unless the taxpayer and the IRS agree to extend the period). The statutory deadline for a taxpayer to file a claim for refund is known as the Refund Statute Expiration Date (RSED).
Word of Caution: Although the IRS considers a superseding return to be “the return” for many reasons, its position is that a superseding return is not controlling for ASED and RSED purposes provided the original return was valid. This means that a taxpayer’s original return, not a superseding return filed on extension, is the return used for calculating both the ASED and RSED. Statutes of limitation start when the taxpayer files their original return, and filing a superseding return on extension does not restart or affect the statute of limitations.
The next time information on an originally filed tax return needs to be updated, corrected, or revised, consider the benefit and possible necessity of filing a superseding return prior to the extended due date. It is important to pay close attention to filing deadlines, important statutes of limitation, and any legal requirements pertaining to the tax item(s) involved. The filing deadline for taxpayers with IRS-approved extensions is approaching on October 15, 2024. Remember that an extension only applies to the time to file the return, whereas the tax due must still be timely paid before expiration of the original filing deadline, usually April 15. For more information on extensions check out our TAS Tax Tip page.
The views expressed in this blog are solely those of the National Taxpayer Advocate. The National Taxpayer Advocate presents an independent taxpayer perspective that does not necessarily reflect the position of the IRS, the Treasury Department, or the Office of Management and Budget.