Correcting Information Returns

1098, 1099, 3921, 3922, 5498, W2G

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If you filed an Information Return with the IRS and later discover you made an error on it, you must


Correct it as soon as possible.
Furnish statements to recipients showing the correction.
File the correction with the IRS.


Important The instructions that follow do not apply to ACA Forms 1094 and/or 1095.

Important Instructions for correcting ACA forms are available on Account Ability's FAQ page.


group The steps required to correct an error depend upon the type of error.


bullet_box If you discover an error in reporting the payer (not recipient) name and/or TIN


Write a letter to IRS/IRB containing the following information:


The name and address of the payer
Type of error (including the incorrect payer name/TIN that was reported)
Tax year
Payer TIN
Transmitter Control Code (TCC), if applicable
Type of return
Number of payees
Filing method (paper, electronic)
Was Federal income tax withheld?


Send the letter to


Internal Revenue Service

Information Returns Branch

230 Murall Drive, Mail Stop 4360

Kearneysville, WV 25430


IRS will contact you with further instructions.


bullet_box If you discover duplicate reporting or that a large percentage of incorrect information has been filed.


Contact the Information Reporting Customer Service Site at 1-866-455-7438 for further instructions.


bullet_box Error Type 1


Also referred to as a 1-Transaction error, Error Type 1 includes


Incorrect money amounts
Incorrect distribution code(s)
Incorrect check boxes
A return was filed when one should not have been filed.


Type 1 errors require only one transaction to make the correction.


bullet_box Error Type 2


Also referred to as a 2-Transaction error, Error Type 2 includes


Incorrect payee TIN
Incorrect payee name
Incorrect payee address
Wrong type of return was filed.


Type 2 errors require two transactions to make the correction, an IDENTIFYING transaction and a CORRECTING transaction. The IDENTIFYING transaction is the original return with the CORR(G) indicator checked and all dollar amounts set to ZERO. The CORRECTING transaction is a new return with the CORR(C) indicator checked. When IRS receives the IDENTIFYING and CORRECTING transactions, the IDENTIFYING return is VOIDED and replaced with the CORRECTING return.


group Correcting Type 1 and Type 2 Errors


Account Ability facilitates the correction process by maintaining each filer's corrected returns under a distinct Client ID. When the Corrected Returns Only indicator, located on the General page of the client's master, is checked, the client is regarded as a correction client and all of the client's information returns are regarded as correction returns. The CORR(G) and CORR(C) check boxes, displayed at the top of each form's user interface, are enabled for correction clients only.


1) Create a Correction Client


Select Client (Filer, Entity) Management from the Module menu.
Right-click the client whose returns are to be corrected.
Select Copy from the menu.
Reply Yes when asked if you are creating a correction client,


Correction Client Dialog


Enter a Client ID to be used for the correction client.
Click OK.
The Client ID should be displayed in green.


2) Open the Returns to be Corrected


Double-click the correction client.
Open the returns to be corrected.


3) Enter your Corrections


Select New from the File menu.
Check the CORR(G) check box.
Determine the type of error to be corrected (see above): Error Type 1 or Error Type 2
Click the Locator icon Locator displayed directly after the TIN Type field in order to locate the return to be corrected. This step can be skipped if you are keying in correction returns from scratch.
After locating the return, click the Type 1 or Type 2 button to indicate the type of error to be corrected.
If Type 1 is clicked, the original return is displayed with the CORR(G) indicator checked. Enter and save your corrections.
If Type 2 is clicked, an IDENTIFYING transaction is automatically created. You will then have the option to create a CORRECTING transaction. The CORR(C) indicator is automatically checked on the CORRECTING transaction.


Paper ClipVOIDS - To VOID a return, create the IDENTIFYING transaction without a CORRECTING transaction.


After all corrections have been entered, print and mail all recipient copies, even the IDENTIFYING returns. If you plan to file with IRS on paper, print Copy A for IRS and Form 1096. If you plan to file electronically, you must append the CORR(G) and CORR(C) transactions to the IRSTAX file in two steps - first the CORR(G) transactions, next the CORR(C) transactions. The resultant IRSTAX file should be transmitted to The IRS FIRE System as a Correction file.


note Notes


When printed, the CORRECTION box at the top of each correction return is checked for CORR(G) returns only.
Correction returns can be keyed in directly (that is, the originals need not be recorded).
The Tools menu contains selections for manipulating the CORR(G) and CORR(C) indicators on a global scale.
The Tips Knowledge Base contains detailed instructions on how to import correction returns from a text file.