With tax time being its busy season, the Internal Revenue Service (IRS) issued a stern alert to taxpayers about a common mistake that can lead to tremendous loss and legal complications: signing an unsigned tax return. That simple oversight makes a tax return invalid, which leads to delayed processing, penalty, and interest.
The importance of signing your tax return
A signature on a tax return is a confirmation that the information provided in the return is complete and accurate. If not authenticated, the IRS will not accept the return, and this may lead to additional interest and penalties. This also holds good for paper and electronic filings. Joint returns need to be signed by both spouses. Exemptions to this obligation are members of the armed forces or taxpayers who possess a valid power of attorney. In an effort to spare taxpayers from this error, the IRS recommends e-filing returns and utilizing electronic signatures, which has less possibility of omission.
Common errors when filing tax returns
Apart from omitted signatures, some other frequent errors have been pointed out by the IRS as complicating taxpayers’ legal situations:
- Inaccurate or missing Social Security numbers: It’s essential that each number is entered exactly as it’s shown on the corresponding Social Security card.
- Incorrect names: Names must match precisely as they’re shown on Social Security cards.
- Filing status errors: The use of an inaccurate filing status can affect the validity of your return.
- Math mistakes: From basic addition and subtraction to more advanced computations, math mistakes are common and can influence the result of the return.
Legal ramifications of tax return errors
Tax return errors can trigger IRS audits.
The audits are intended to confirm the veracity of information reported and proper compliance with tax laws. The IRS selects returns for audit using several means, e.g., computer matching and random sampling. If discrepancies of substance are discovered, penalties can range from monetary to more severe penalties, e.g., bank account levying.
A levy is a lawful action, which allows the IRS to seize property in order to pay overdue tax debt, including wage garnishment, bank accounts, cars, homes, and other personal properties.
Actions to amend tax return mistakes
If, at the time of filing, the taxpayer becomes aware of an error, the same can be amended through the filing of an amended return.
The IRS offers Form 1040-X for this purpose, and step-by-step directions need to be adhered to, with necessary documentation attached in an effort to prevent any additional delays.
In addition, when the IRS issues a math error notice, the taxpayer needs to read the notice carefully and compare corrections that they made to their tax return data. In the event of a disagreement with the notice, it is best to write to the IRS within 60 days of the notice date to get the changes reconsidered.
Tips for avoiding legal issues
To minimize the risk of legal issues because of errors in tax returns, the IRS recommends:
- Carefully go through the return before filing: Ensure everything is correct and in order.
- Use electronic filing options: Electronic filing reduces the chances of error and omission.
- Keep accurate records: Keep copies of all the documents that go with your tax return.
- Consult experts: Taking advice from experienced tax professionals can make your return completely compliant with all tax laws.
By following these rules and being very careful with details such as signing the return, taxpayers can reduce the risk of legal problems with the IRS.
