How to handle a tax return rejected by the IRS

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How to handle a tax return rejected by the IRS

Updated March 5, 2019: Tax season is tough. It can be a ton of work getting all the forms together, making your deductions and filing the return before the April 15 deadline. If you haven't done your taxes yet, here's an easy guide.

Just as you put taxes completely off your mind until next year, you get an unwelcome letter in the mail from the IRS with a very blunt message: Your tax return’s been rejected.

Ouch. Rejection of any kind can certainly be a blow to your self esteem, but when it’s from the federal government it can sting that much more.

But there’s no need to panic. Here’s what you need to know to get your return corrected and refiled to avoid any more IRS drama:

Why your tax return was rejected

If you receive a rejection notification, it means that the IRS discovered something it deems incorrect, or some information is missing, and it’ll be up to you to fix it so your tax return can be processed correctly. Here's what to do if it's your mistake. Your tax return might get rejected if you incorrectly entered your:

  • Name, your spouse’s name (if you’re jointly filing), or names of employers, business partners or spouses.
  • Date of birth.
  • Social Security number. One number out of place can make your Social Security number the same as another filer’s and get your tax return rejected.
  • Home address.
  • Identification numbers, like your taxpayer or employer’s IDs, and/or the accompanying PIN number.
  • Direct deposit information. The wrong bank account or routing numbers may register as an error to the IRS.
  • Last year’s adjusted gross income (AGI). Name of a dependent already claimed on another tax return form, such as an ex-spouse.
  • Dependents claimed.

Don't forget another form on your taxes again. Download this tax checklist to keep track of all your documents during tax season.

Your return can also get flagged for:

  • State-specific errors. You may be married but trying to file separately, yet unaware that you live in a community property state where it’s not allowed.
  • Form miscalculations, like errors in the amount of tax credits or deductions you’re claiming, the amount you owe the IRS, or the amount they owe you as a tax refund.
  • Logistical errors, like failing to sign your tax return, or forgetting to attach essential documents, like your W-2 or other forms.

Here are more forms taxpayers frequently forget to file.

Deciphering confusing e-codes

If you’re mailing a paper income tax return, you won’t know immediately if it was accepted or rejected, since the IRS will need to snail mail you a notification. E-filing can be faster and more convenient, and if there’s a mistake on your tax return, you’ll receive an error code preventing you from filing it, so there’s no back-and-forth of filing, returning and resending.
The IRS has a long, extensive list of reject codes. You can learn about them here.

The tax software you use may be able to identify where there’s an error before you go to e-file, but if not, and you receive an error code, you’ll be able to correct it before submitting your tax return.

When it’s the IRS’ fault

When you receive a rejected tax return or an error code, the IRS will tell you what the reason is, so you won’t be left having to guess why it was declined.

That doesn’t mean the error is your fault.

It could simply be a clerical error, though many times, it might be that the data the IRS has on file is incorrect. If you’re insistent that the information on your end is correct, it’s recommended you mail your tax return to the IRS with a written note stipulating that repeated attempts to rectify the problem have failed, along with proof that your information is correct. Here are some tips to make doing your taxes less painful.

How to fix and refile a rejected tax return

There are two grace periods to keep in mind for submitting a corrected tax return form.
For an e-file refile, you’ll need to submit your tax return within five days of receiving an error message to avoid a penalty fee. Then, you’ll be notified within 48 hours if it’s been accepted or rejected.

If you’re mailing your tax return, you have 10 days from the moment you receive your rejection notice.

Whether you filed your tax return early or at the very last minute, there’s plenty of time to fix, amend and resend. (Though it does make more sense to file early to avoid rushing.) E-filing a correction gets less time because the convenience of error codes lets you look up the solution and refile more swiftly.

Conventional paper tax returns get twice the grace period because error codes don’t apply. In this case, if the numbers don’t match, go back and double check the IRS’ claim against your own records. Don’t worry, you won’t have to redo your entire tax return. It could be as simple as checking your birth date. Once you find the error, you should be able to correct just that item if electronically filing; if paper filing, you’ll need to print a new sheet with the error corrected, and mail them back.

Consulting a tax professional may be helpful if the error is too difficult for you to tackle. Here's a guide on finding the right tax preparer.

And if the IRS accepts your income tax return but your eagle eye spots an error they overlooked, you have up to three years to file an amended return from the date you filed it.

Tax return rejections aren’t that common, but by following some of the above steps will help you get your tax return submitted with the right information.

Still on the IRS' naughty list? Here's how to get off of it.

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