1-Step and 2-Step Corrections
You uploaded a file to be processed through IRS FIRE System and
the file status comes back as GOOD. Later, you discover that the
file that you uploaded contained erroneous information. You
can file a correction.
Corrections filed after August 1 may be subject to a penalty, but
even if you passed the deadline, it's still important to submit a corrected return.
Only correct what was erroneous and resubmit just that corrected information. If you uploaded a file
with 250 forms and one record has erroneous information, then put together a correction for
just that one record that was in error. Do not send your entire file again. You can't
combine originals and corrections in the same file.
You want to correct the same way you originally transmitted your data. If you electronically
filed your original data, then electronically file any corrections. If you paper
filed your original data and discover an error, then paper file a correction. The
IRS spends the summer months scanning the paper forms so that the data is electronically
stored. If you paper file, discover an error and then electronically file a correction
before your data was scanned into the IRS FIRE System, the electronically filed correction
does nothing even though it may very well come back with a file status of 'GOOD'.
1-Step Correction
A 1-step correction arises when you submitted a file with an incorrect money amount or the return should not
have been filed and you want to void the transaction. Put together a new file with just the money
amount corrections that you want to correct. Put a check in the corrected box (not void) and
change the money amounts. If you want to void the transaction, make the money amounts $0. Get
to this screen in the software:
and select 1-Step as the file type. The software will add the G in the 6th position of each B record.
Log into the IRS FIRE system and upload the corrected file.
2-Step Correction
A 2-step correction arises when you submitted a file with:
- No payee TIN
- Incorrect payee TIN
- Incorrect payee name
- Wrong type of return indicator
A wrong type of return indicator means that you submitted a file as a 1099-DIV data
but in reality it was 1099-INT data. It happens.
To correct these types of errors take two steps or two files. You have to first
void the original incorrect data that was transmitted. Put together a file that contains
the original incorrect data that you transmitted. If your data is in excel, put a 1
in Column B which represents the corrected box.
Make the money amounts 0. You get to this screen:
and select Step 1 as the option. This voids the original incorrect data.
The 2nd file or second step has the correct data, a check in the corrected box and
the correct money amounts.
Log into the IRS FIRE System and upload Step 1 as a correction and then Step 2.
