If you decide to file an amended return claiming a refund, there are ways to lower the chances the IRS will question it:
- Make sure your 1040X is filled out completely and legibly.
- Attach a full explanation for a refund claim, complete with all necessary documentation.
- Use exact rather than estimated numbers, to indicate precision on your part.
If the IRS employee classifying your return is convinced you can sustain your refund claim, he or she likely will move on to the next taxpayer.
You should be extra careful if your amended return claims a refund for travel and entertainment, unreimbursed employee business expenses, casualty losses, property donations to charity, home office deductions, and transactions involving family members. Those are items that the IRS treats with skepticism so be ready to document your refund request.
One savvy tactic is to examine each tax return just before the three-year statute of limitations expires. If you discover that you overpaid tax on your old return, file an amended return before the deadline and request a refund. Although the amended items have to withstand three years of scrutiny, no additional tax can be assessed by the IRS once you pass the three-year mark.
