Last month, the Treasury Inspector General for Tax Administration recommended that taxpayers be allowed to use Form 1040 to amend returns and be able to e-file amended returns. 

According to Journal of Accountancy, a study of a statistical sample of 259 paper-filed amended returns found 44 of those returns with refunds totaling $103,270 that were incorrectly paid out. The TIGTA estimates that, based on that sample, the IRS is losing $2.1 billion in erroneous refunds.

Currently, amended returns have to be submitted on paper. The recommendation was intended to help reduce the number of erroneously-paid refunds, but it could also make taxpayers’ lives easier as well. 

The IRS agreed with the recommendation that e-filed amended returns should be accepted, although it warned that converting to a new system that can process e-filed amended returns will take time and funding that isn’t currently available. We expect that eventually the capability will be in place.