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Amended Tax Return or Superseding Tax Return?

By Joel N. Crouch on October 8, 2020

I recently had one of those “aha” moments and thought it was blog-post worthy. A tax return preparer called me after a tax return he tried to electronically file was rejected by the IRS because a return had already been filed for the taxpayer for same tax period.  The first thought is: this is a case of stolen identity and a fraudulent return, right? In most cases, yes; but in this case, wrong.  Upon further investigation, the preparer found that his office had inadvertently filed an incomplete return for the taxpayer, ten days before.  In fact, the return that was filed was completely blank.

The return preparer was calling me to ask what explanation should be included with an amended return.  He explained that he wanted to file the amended return quickly because the deadline for filing an original return would pass soon and he thought filing an amended return before the filing deadline would help with penalties. That made me think: that this could not be the first time this has happened.  There had to be situations where a tax return is filed and, before the deadline for filing an original return, additional information is discovered that changes the original return.  So I did some quick research and found something called a “superseding return”.

A superseding return is a return filed subsequent to the originally-filed return, but filed within the filing period, including valid extensions. A timely and properly filed superseding return will be treated as the original return for the tax period, and it eliminates the possibility of penalties or other action based on missing information.  A taxpayer may want to file early in the tax season for a number of reasons.  Maybe they are expecting a refund or maybe a filed return is needed to determine financial aid available for a child in college or entering college. Whatever the reason, a return is filed and then additional information is discovered that changes the tax return.  If the period for filing is still open, a superseding return can be filed and it will be treated like an original return.

Superseding returns are defined and discussed in IRM 21.6.7.4.10 (07-22-2019). In addition, the IRS discusses filing amended and superseding corporate returns here, and says a superseding corporate return can be filed electronically by selecting the Superseding Return checkbox in the tax filing software.  Failure to do so will result in the return being rejected as a duplicate filing.  Alternatively, a paper return can be filed, but I recommend writing “Superseding Return” at the top of the first page of the return in hopes of avoiding confusion.  IRS Publication 4163, also discusses electronic filing of superseding business returns. Follow this link to a very good article that discusses how a superseding return can be used as a planning tool for timely making certain corporate elections.

Although you might not be able to teach an old dog new tricks, I am proof that a middle-aged tax lawyer can learn something new.

For questions related to this or any other civil tax or criminal tax related matter, please feel free to contact Joel Crouch at (214) 749-2456 or jcrouch@meadowscollier.com.