An amended (Form 1040-X) or corrected (duplicate) return filed on or before the due date or the extended due date (posted TC 460) is a superseding return. See IRM 3.11.6.2.3.2 or IRM 3.11.6.3.3.2 (formerly IRM 3.11.6.2.3)
Superseding returns are subsequent returns filed within the same filing period as the original return (including extensions). A superseding return is considered the original filing, because the return takes the place of any other return that was previously filed during the filing period. All e-filed business rules that are enforced for the original return apply to the superseding return. (See Haggar Co v Helvering, Riley Co v Comr, Nat’l Lead v Comr)
Amended returns are subsequent returns filed after the extended due date of the original return. For 1120, 1120S, 1120-F, and 1065 returns, the amended return should include the main form and any changes that you made. Also, for 1120 returns, only a subset of the business rules apply, while 1065 returns follow all business rules.
IRS: Amended and Superseding Corporate Returns
Qualified amended returns pursuant to Regs §1.6664-1(b)(3) allow a taxpayer to avoid an accuracy-related penalty for a substantial understatement on an original return.
DISCUSSION:
A Form 1040 is on extension until October 15th. The original Form 1040 is filed on September 1st. A superseding return (Form 1040X) is filed on October 14th. This Form 1040X is a superseding return but the RSED, CSED and ASED statutes commence on September 1st.
A superseding return (Form 1040X) is filed on October 24th. In this case, Form 1040X is filed too late to be a superseding return and therefore it is considered to be a timely filed amended return. The RSED, CSED and ASED statutes commence on September 1st.
Who cares about this? Generally (but not always), a superseding return is better for the taxpayer.
Generally, if the taxpayer originally overstated his tax, then a superseding return is better, especially if the taxpayer wants an overpayment to be applied to the following year as a “credit elect.”
Generally, if the taxpayer originally understated his tax, then NOT filing a superseding return could be “better,” in the sense that late payment penalties are generally based on the original return. But NOT filing a superseding return could be “worse” in that having already filed an incorrect return that understates tax liability could be considered fraud.
Besides the “credit elect” election mentioned above, there are a few other items, such as tax elections, that once filed cannot be changed or amended later on. For example, electing to file MFJ (married filing joint) is generally irrevocable, but with a timely filed superseding return each spouse could separately elect to file MFS (married filing separate)
| SUBSTITUTE FOR RETURN (SFR) |
A complete return prepared from information submitted by the taxpayer on other than a tax return with his signature. |
| AUTOMATED SUBSTITUTE FOR RETURN(ASFR) a/k/a informally as a SERVICE FILED RETURN |
A complete return prepared from information available to the IRS computers on other than a tax return form with a taxpayer’s signature, pursuant to IRC §6020(b) |
| SUPERSEDING (CORRECTING RETURN) | A second return submitted by a taxpayer before the due date (including extensions) which changes information on a return previously submitted. |
Section 61. Files Management and Services
NAEA: Dealing with SFRs and ASFRs – Substitutes for Returns
IRS: Topic 308 – Amended Returns
IRS: Tax Tip 2018-77 – Amended Returns
Know when not to amend. Aside from math errors, taxpayers also do not need to amend their return if they forgot to include a required form or schedule. The IRS will mail a request to the taxpayer, if needed. Exceptions: missing forms related to foreign assets or foreign income should generally be sent to IRS ASAP to start the statute of limitations running, and to otherwise comply with harsh IRS rules for non-disclosure. Form 8621 and Form 8938 for example.
IRM 21.6.7.4.10 (07-22-2019)
Superseding Returns
(1) The due date of a calendar year individual income tax return is April 15th. If April 15th falls on a weekend or holiday, the return is due on the next business day. A fiscal year individual income tax return is due the fifteenth day of the fourth month following the close of the fiscal year.
a. An amended (Form 1040-X) or corrected (duplicate) return filed on or before the due date or the extended due date is a superseding return.
b. Correspondence postmarked on or before the due date or extended due date, requesting changes to tax returns, is processed as superseding information.
(2) Consider the following when making a superseding adjustment:
- Changes in irrevocable elections (e.g., Section 179, Joint to Separate) Note: A return filed after the original due date but on or before the extended due date does not constitute a superseding return in this situation.
Also see: NTA Blog March 24, 2021
Also see: NTA Blog April 29, 2020 - Manual computation of ES Penalty. Refer to IRM 20.1.3, Estimated Tax Penalties.
- Reversal of offsets to other Individual Master File (IMF), Business Master File (BMF), and Debtor Master File (DMF) accounts when increasing the balance due
- Returns meeting Examination criteria. Follow procedures in Exhibit 21.5.3-2, Examination Criteria (CAT-A) – General.
- Reversal of the offset to the Treasury Offset Program, refer to IRM 21.4.6.5.7.1, Allowable TOP Offset Reversals.
- Use the appropriate non-refile blocking series (e.g., 05, 77, 99, etc). Refer to IRM 21.5.1.5.3, CIS Source Documentation, and Document 6209 – Section 4 – Adjustment Blocking Series, for additional information.
- Use item reference number 871 when necessary. Refer to IRM 20.1.2.2.6.2, Incorrect Tax Shown Recorded, and IRM 20.1.2.2.6.3, Wrong Return Posted First, for additional information.Exception:Use the appropriate refile blocking series when required to be associated with the original return (e.g., separate to joint).
IRM 3.11.6.3.3.2 (10-16-2017)
Superseding Returns
1.The due date of a calendar year individual income tax return is April 15. A fiscal year individual income tax return is due the fifteenth day of the fourth month following the close of the fiscal year.
a. An amended (Form 1040-X) or corrected (duplicate) return filed on or before the due date or the extended due date (posted TC 460) is a superseding return.
b. An amended (Form 1040-X) postmarked on or before the due date or extended due date, is processed as a superseding return.
Note:
These amended returns are processed as any other amended return is processed.
2. If the superseding return has an unpaid net balance due increase on the module, route to CIS/AM.
IRM 3.11.6.2.3 (08-02-2016)
Superseding Returns
1.The due date of a calendar year individual income tax return is April 15. A fiscal year individual income tax return is due the fifteenth day of the fourth month following the close of the fiscal year.
a.An amended (Form 1040-X) or corrected (duplicate) return filed on or before the due date or the extended due date (posted TC 460) is a superseding return.
b.Correspondence postmarked on or before the due date or extended due date (posted TC 460), requesting changes to tax returns, is processed as superseding information.
Note: These amended returns are processed as any other amended return is processed.
2.If the superseding return has an unpaid net balance due increase, routed to CIS/AM.
IRM 3.11.6.5.4 (10-07-2016)
Amended Form 1040 with No Form 1040-X Attached / True Duplicates (TRUE DUPES)
1.A true duplicate condition occurs when the taxpayer files two Form 1040 series returns for the same tax year. Often the taxpayer will send in a Form 1040/A/EZ with a notation of “Duplicate” , “Copy” , “Substitute” , “Amended” , “Corrected” , “Revised” , “Superseding” , or “Tentative” , or attaches a copy of a previously filed return. Taxpayer’s may also amend their return using a Form 1040 as opposed to a Form 1040-X.
2.Research for a TC 150 per IRM 3.11.6.5.1. If no TC 150 has posted, circle out any notation that suggests the return was previously filed. Edit No TC 150 and the current date in the upper left margin and send to Batching to be processed as an original return. Do not notate PAO on the documents.
IRM 3.11.6.8.6.1 (01-01-2017)
Protecting Americans from Tax Hikes
1.The Protecting Americans from Tax Hikes Act (PATH Act) was enacted December 18, 2015. The PATH Act prohibits taxpayers from retroactively claiming certain TIN related credits for any tax year in which the taxpayer, spouse or qualifying child did not have a valid TIN assigned by return due date or due date as extended. The PATH Act applies to:
•Child Tax Credit (CTC)
•Additional Child Tax Credit (ACTC)
•American Opportunity Credit (AOTC) -both refundable and non-refundable
•Earned Income Credit (EIC)
•CP notices 08, 09 and 27.
2.Credit specific eligibility requirements apply in addition to the PATH Act criteria.
3.PATH Act does not apply to superseding returns.
4.The Path Act does not allow the removal of PATH credits previously allowed due to a filing status change to Married filing jointly unless initiated by the taxpayer. Apply the PATH Act using the following table:
IRM 20.1.3.1.4 (03-31-2010)
Superseding Returns
1.In most cases the estimated tax penalty is computed based on the tax shown on the taxpayer’s original return. However, if the taxpayer files a superseding return, the penalty is computed on the tax shown on that superseding return.
2.A superseding return is defined as a second (or subsequent) return filed before the due date for filing, including extensions. Please note that the superseding return is determined based on the order in which the returns were filed. It is not based on which return was processed first.
3.The estimated tax penalty MUST be manually computed and adjusted unless either of the following applies:
1.The tax on the original and the superseding return is the same, or
2.The superseding return posted as TC 150 in the module.
The manual adjustment requirement applies even if there is no penalty due or if the penalty does not change. The manual adjustment will prevent an incorrect computer generated adjustment if withholding or ES payments are changed.
IRM 21.4.1.4.6 (05-26-2016)
Credit Elect Problems
1.A taxpayer may elect to have all or a portion of an overpayment credited to the next year’s estimated tax (ES). The “credit elect” can be recognized by TC 836 on the current year’s module and TC 716 on the following year’s module. Access CC REINF or CC IMFOL if there is no data on CC TXMOD.
Note:
Taxpayers may also elect to have an overpayment credited to another year/period other than the immediately succeeding tax year or period. See IRM 20.2.4.6.2 Rules for Applying Offsets Under Section 6402, for guidance.
2.When a taxpayer inquires about a refund and research shows the overpayment was applied as a credit elect for the following year, the overpayment is only refundable if:
1.It was applied as a credit elect to the following year due to a processing error.
2.The taxpayer is not liable for ES, and he/she erred in entering the overpayment as a credit elect.
3.The taxpayer files a balance due superseding return and requests a credit elect reversal to satisfy the balance due. See IRM 21.4.1.5.6.1, Credit Elect Reversals, for additional information.
IRM 21.4.1.5.6.1 (03-08-2017)
IRM 21.4.1.4.6.1 (10-09-2015)
Credit Elect Reversals
1.In order to process a credit elect reversal for IMF accounts, the request must be received:
•Before the return for the credit year has posted, and
•Before March 1, of the year following the year to which the credit was applied
Example:
A request to reverse a credit elect from a 2016 account back to the 2015 account must be received before the 2016 return has posted and before March 1, 2017.
4.Do not reverse credit elect to offset additional tax or penalties subsequently assessed on the year of overpayment unless the request is on a superseding return (amended return postmarked on or before return due date or extended due date). When working correspondence use the Letter 247C, Taxpayer Advised Re: Estimated Taxes/Refund, or call the taxpayer to explain that the credit elect is binding.
Pub 4164, page 25 discusses superseding returns. As this is with regard to the e-file system it does not help give any guidance. It just says you can’t file a superseding 1040 via the MeF.
CCA 200645019 also addresses what a superseding return is.
CCA 201118021 also addresses what a superseding return is.
KPMG – A Valid Extension of Time to File a Return May Be Your Best Friend
Forbes: You Just Filed Your Taxes, Is It Too Early To Amend?
What is posted TC 460? Doc. Code 77: IMF-Form 4868 extension for other than automatic 6 months and Form 2350. Form 4868 with international FLC (20, 21,66 and 98) in DLN maximum extension to 12/15/YYYY (U.S. citizens who live and work or serve in the military abroad). International DLN with Blocking range 400-499 indicates Form 2350. Form 2350maximum extension to RDD plus 11 1/2 months. BMF-Forms 7004/8868/5558/8892. Establishes a Tax Module, updates Status to 04, and updates related filing requirements except for Forms 706 and 709. Applies to 706-GS(D), 706-GS(T), 1041(estate other than a bankruptcy estate) 1041 (bankruptcy estate only) 1041-N, 1041-QFT, 1042, 1065, 1065-B, 1120 series, 3520-A, 8612, 8804, 5330, 990, 990-EZ, 990-BL, 990-PF, 990-T series, 1041-A, 4720, 5227 and 709. Doc. Code 17, 19 AUTOMATIC EXTENSION FORM 4868 IMF ONLY. TC 460 as a secondary transaction with TC 670 indicates approved automatic extension. TY 2006 and subsequent, generates Extended Due Date to October 15 (i.e. RDD plus six months). BMF: Generated when TC 670 with Secondary TC 460 is input to MFT 51 module. Extended due date on generated TC 460 is October 15 of the following year (i.e. RDD plus six months). Also generated when approved extension TC 620 posts to MFT 02/05/06/07/08/12/33/34/36/37/42/66/67/76/77/78, Exception: MFT 05 (Form 1041 (estate other than a bankruptcy estate) only), MFT 06 (Form 1065 only) and MFT 08, Generated Extended Due Date to RDD plus 5 months. For MFT 36/37/44/67, first approved extension generated Extended Due Date to RDD plus 3 months; second approved extension generates Extended Due Date to RDD plus six months. EPMF: Doc Code 77 Form 5558 MFT 74 posts to EPMF. https://www.auditdetective.com/Transaction_Code_Definitions.html
http://igotmyrefund.com/irs-transaction-codes-and-error-codes/