Amended Returns and Collection Action
What should tax practitioners do when filing an amended return that will reduce or eliminate their client’s outstanding tax liability that is in collections with us?
Because an amended return can take awhile to be processed, a practitioner with a client in collection status should contact us if the amended return changes the balance owed. This will allow the collection action to be modified or delayed pending the processing of the amended return. The practitioner should provide a copy of the amended return to the collector who will need to make the following determinations:
- If the amended return is based on an audit, our collection staff will work with audit staff to determine the accuracy of the return.
- If the amended return is determined to be complete and accurate and will result in a reduction of the taxpayer’s liability, we will modify existing actions to ensure only the correct amount of tax is collected. Or, staff will work with the taxpayer’s representative to establish a payment plan for the amount due.
- If the amended return eliminates the taxpayer’s liability, we will delay collection action and place a hold on the account to allow time for the amended return to be processed.
- If the amended return is incomplete, inaccurate, or there is no change to the tax due, collection action can continue as normal.