The IRS has discretion, not a legal duty, to process amended returns

Plain-English summary

A field examiner asked what obligation the IRS has to process amended returns. Chief Counsel explained that the Internal Revenue Manual gives Service employees extensive procedures for handling amended returns (for example, IRM 3.11.6 for Form 1040-X and IRM 4.10.11 for examinations), and that the IRS website instructs taxpayers on how to amend. But outside those internal procedures, there is no statute that requires the IRS to accept or process an amended return. Courts have long held that an amended return is "a creature of administrative origin and grace," and whether to accept one is solely within the Commissioner's discretion (citing Goldring, Badaracco, and Ramsay). The takeaway: although no law compels it, the IRS's general policy is to process amended returns that are valid, timely, complete, and processable.

Ruling snapshot

• Question: What obligation does the IRS have to process amended returns, which are not provided for in the Internal Revenue Code?
• Outcome: advice given (no legal duty; acceptance is within the Commissioner's discretion, though IRS policy is generally to process valid, timely, complete, processable returns)
• Key authorities: Goldring v. Commissioner, 20 T.C. 79 (1953); Badaracco v. Commissioner, 464 U.S. 386 (1984); IRM 3.11.6, 4.10.11

Full text (IRS public release)

ID:          CCA_2024091715160218                 [Third Party Communication:

UILC:        9999.00-00                           Date of Communication: Month DD, YYYY]

Number: 202504016
Release Date: 1/24/2025
From: --------------------------
Sent: Tuesday, September 17, 2024 3:16:02 PM
To: ------------------
Cc: ----------------------
Bcc:
Subject: RE: Processing of Amended Returns by Field Exam


Hi ------,

Please see below our response to your question regarding amended returns
processing. If there are any other questions or concerns, please don’t hesitate to reach
out. Thanks very much.

Issue: What obligation does the Service have to process amended returns, which are
not provided for in the IRC?

Analysis:
The IRM provides extensive guidance to Service employees regarding processing of
submitted amended returns. For instance, IRM 3.11.6 provides procedures for
processing Form 1040-X, Amended U.S. Individual Income Tax Return. IRM
3.11.6.2(10) explains that when receiving an amended return, employees who are
responsible for processing amended returns should proceed with processing the return
if they determine that (1) routing criteria are met; (2) the claim is complete; (3) the claim
is allowable; and (4) the claim is processable.

Examination procedures are also provided for amended returns. See IRM 4.10.11.1.1(3)
(“An examiner must properly identify the nature of a taxpayer’s amended return (or
other written request) to determine the applicable examination procedures. This IRM
provides guidance for determining if an amended return (or other written request) fits
the criteria of a claim for refund, request for abatement, or audit reconsideration, and
provides examination and report writing guidance for each.”); see also IRM Exhibit
4.10.11-3 (re Taxable Amended Returns).

The IRS’s website also provides detailed instructions to taxpayers regarding amending
a return.

Outside of the administrative context, however, courts have made clear that “[t]here is
no statutory provision for an amended return, and the acceptance or rejection thereof is
solely within the discretion of the Commissioner.” Goldring v. Commissioner, 20 T.C. 79,
81 (1953); see also Badaracco v. Commissioner, 464 U.S. 386, 393 (1984) (“[T]he
                                                    2

Internal Revenue Code does not explicitly provide either for a taxpayer's filing, or for the
Commissioner's acceptance, of an amended return; instead, an amended return is a
creature of administrative origin and grace.”); Ramsay v. Commissioner, T.C. Memo.
2017-223, 2017 WL 5503163 (Nov. 15, 2017) (same). Although there is no legal
requirement for the IRS to process an amended return, it is the policy of the IRS
generally to process amended returns if they are valid, timely, complete, and
processable.


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